November 22, 2019

Company name

Tokyo Seimitsu Co., Ltd.

Representative

Yoshida Hitoshi, President and CEO

(Code No. 7729 TSE Div. No. 1)

Contact

Kawamura Koichi, CFO

Phone

+81-(0)42-642-1701

Announcement of completed acquisition of the balancer business

from Schmitt Industries, Inc. by Tosei Engineering Corp.

Strengthening the product lineup and expanding our share of the global market

On November 22, Tokyo Seimitsu Co., Ltd. (hereafter, "the Company") subsidiary Tosei Engineering Corp. (hereafter, "TSE") and its US subsidiary Tosei America, Inc. completed acquisition of the balancer business (hereafter, "SBS®") from the US manufacturer Schmitt Industries, Inc. (hereafter, "SMIT"), and began sales on the same day.

As a result of this, the name of the TSE US subsidiary will be changed to ACCRETECH SBS Inc. (hereafter, "SBS").

1. Purpose of this transaction and future operation policy

SMIT is a company that develops, manufactures, and sells balancers that are used in machine tool grinding work, laser measurement instruments, and other products. The products produced by the acquired business are SBS® precision balancing systems. These systems are widely used by machine tool manufacturers and grinder users, as well as many automobile, aerospace, steel, bearing, and rotating part manufacturers. SBS® dynamic balancing systems can detect vibrations as small as

0.02 micrometer and dynamically correct them to guarantee product quality, while the SBS® AE (acoustic emission) sensors helps to maximize the efficiency of the grinding process, improve parts throughput and reduce operating costs.

TSE on the other hand develops, sells, and manufactures the gauges that are components of its

automated measurement products. These devices are installed inside grinding machines to measure during the grinding process. The features of these products include high accuracy, high stability, and good durability, and they contribute to the construction of high-quality production lines through automation of measurement and control on machining lines. TSE also has sites located in Japan and overseas and an extensive support system that can respond in case of machining line trouble.

As a result of this acquisition, and combining brand strength of the SBS® balancer and AE sensor products with the global sales network of the ACCRETECH Group, we will have balancers and gaging devices fully to the lineup and work to further strengthen sales.

Michael Zapata, CEO of Schmitt Industries, Inc.:

"We are confident to have found the ideal strategic partner for SBS® in ACCRETECH. Thanks to its expertise in measuring systems, ACCRETECH is able to maximize the SBS® business line while continuing to offer first-class support to all SBS® customers."

Hitoshi Yoshida, President and CEO of Tokyo Seimitsu Co., Ltd.:

"I am extremely pleased to welcome the SBS® product group to the product lineup of the ACCRETECH Group, and I am certain that this expansion of our product portfolio will contribute to providing cost reductions and solutions for higher degrees of freedom to our customers. Together with SBS, we will continue to build the Win-Win relationships that are the motto of the ACCRETECH Group."

Hiroyuki Kobayashi, CEO of ACCRETECH SBS Inc.:

"I am proud that we will be able to deliver the world-leading SBS® brand in the fields of balancing controls and grinding process monitoring to customers around the world with greater speed and more complete support. We will add SBS® to our product lineup and make greater contributions to the machine tool industry based on the concept that 'No Measurement, No Manufacturing'."

2. Outline of the companies

Outline of SMIT

(1)

Company

Name Schmitt Industries, Inc. (NASDAQ: SMIT)

(2)

Head office location

2765 NW Nicolai Street, Portland, Oregon, 97210, USA

(3)

Representatives

Michael Zapata, Chairman & CEO

(4) Year of establishment 1987

(5)

Total Shareholder's equity

8,472,933 USD (End of May 2019)

(6)

Business Segments

Development, manufacturing and sales of high-precision inspection and

measurement equipment

(7)

Production base:

Oregon, USA

(8)

Net sales

13,810,161 USD (Fiscal year ended May 2019)

Outline of the consolidated company

(1) Company Name

ACCRETECH SBS Inc.

(2)

Head office location

8790 Governor Hill Dr. Suite 207, Cincinnati, OH 45249, USA

(3)

Representatives

Hiroyuki Kobayashi, CEO

(4) Business Segments

Development, manufacturing and sales of SBS products, Sales and service

of automatic measurement products

(5)

Production base:

Ohio and Oregon, USA

3. Impact on business results

The impact of this acquisition on the Company results will be minimal, however we will provide prompt notification if disclosure becomes necessary in the future.

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Disclaimer

TSE - Tokyo Stock Exchange Inc. published this content on 25 November 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 November 2019 00:02:03 UTC