INTERNET INITIATIVE JAPAN INC. The company split which is an absorption-type is expected to result in an increase or a decrease in IIJ’s total assets of no greater than 10% of net assets as of the last day of the previous fiscal year, and an increase in revenues of no greater than 3% of revenues in the previous fiscal year. Therefore, some disclosure items and details are partially omitted.
1. Purpose of the company split
Internet service provider business for enterprises (providing Internet connectivity services for enterprises, etc.) and reseller business of Cloud computing services (reselling public Cloud services) of i-revo are highly compatible with IIJ’s business. Based on discussions with i-revo, IIJ is to succeed these businesses through a simplified absorption-type company split and expects to expand those businesses.
2. Summary of the company split
(1) Schedule for the company split
| Board of Directors’ Resolution Date | |
| Contract Date | |
| Effective Date |
Note: This company split is regarded as a simplified absorption-type company split under Article 796, Paragraph 2 of the Companies Act. Accordingly, an approval by a general meeting of shareholders is not required at either company.
(2) Method of the company split
An absorption-type company split in which IIJ will be the succeeding company and i-revo will be the splitting company.
(3) Allotments relating to the company split
IIJ is scheduled to deliver i-revo with
(4) Treatment of new share subscription rights and new share subscription bonds in relation to the company split
Not applicable.
(5) Change in capital due to the company split
The company split will not result in an increase/decrease in capital.
(6) Rights and obligations to be succeeded by the succeeding company
Among the contractual positions, other rights and obligations in relating to the succeeding businesses, IIJ will succeed to those stipulated in the absorption-type company split agreement.
(7) Prospects for performance of debt obligations
IIJ has determined that no issues are to be expected in regard to the performance of its obligations that it would bear on and after the effective date of the company split.
3. Basis of allotment related to the company split, etc.
In regards to calculating the value of the businesses to be succeeded, IIJ adopted the discounted cash flow method (hereinafter “DCF method”) in order to reflect the future business activities. The amount of cash to be delivered was determined through negotiations based on the valuation using the DCF method, which is premised on financial forecasts of the business to be succeeded based on the business plan of i-revo. The business plan does not include any significant increase or decrease in profit.
4. Overview of the companies involved in the company split (As of
| Succeeding Company | Splitting Company | |
| 1. | ||
| 2. Address | 2-10-2, Fujimi, Chiyoda-ku, | 1-11-1, Ginza, Chuo-ku, |
| 3. representative | Representative Director and President, | Representative Director and President, Mitsuhiro Masanobu |
| 4. Business objectives | Provision of Internet connectivity and outsourcing services, provision of systems integration and equipment sales | Systems operation for digital entertainment business, development and operation of internet services |
| 5. Share capital | ||
| 6. Establishment | ||
| 7. Number of shares issued | 93,534,800 shares | 25,000 shares |
| 8. Fiscal year end | ||
| 9. Major shareholders and shareholding ratios | Nippon Telegraph and Telephone Corporation 22.4% Ltd. (Trust account) 9.7% | |
| 10. Financial position and results of operations for the most recent fiscal year | ||
| Fiscal year | Fiscal year ended (Consolidated, IFRS) | Fiscal year ended (Non-consolidated, Japanese GAAP) |
| Equity attributable to owners of the parent or net assets | ||
| Total assets | ||
| Owner’s equity per share or net assets per share | ||
| Revenues | ||
| Operating profit or ordinary income | ||
| Profit attributable to owners of the parent or net income | ||
| Basic earnings per share or net Income per share | ||
5. Overview of the business succession
(1) Details of business to be split
Internet service provider business for enterprises and reseller business of Cloud computing services by i-revo.
(2) Business results of the business to be succeeded (As of
Revenues
(3) Assets and liabilities to be succeeded
IIJ will succeed to the contractual positions, other rights and obligations relating to the businesses to be succeeded that are stipulated in the absorption-type company split agreement. There are no asset and debt to be succeeded.
6. Status following the Company Split
There will be no change in the name, address, name and position of representative, business objectives, share capital, and fiscal year end of IIJ, as a result of this company split.
7. Forecasts
The company split is not expected to have a material impact on the consolidated financial targets of IIJ.
Reference: Consolidated financial targets for the fiscal year ending
| Revenues | Operating profit | Profit before tax | Net income attributable to owners of the parent | |
| Consolidated financial targets (Fiscal year ending | 250,000 | 27,200 | 26,300 | 17,500 |
| Consolidated financial results (Fiscal year ended | 226,335 | 23,547 | 24,162 | 15,672 |
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