Category: M&A

  • Canon offers SEK 23.6 Billion for CCTV leader Axis AB

    Canon aims for leadership in the US$ 15 billion global video surveillance market

    by Gerhard Fasol

    Canon offers 50% premium on Axis Aktiebolag share price of Monday Feb 9, 2015

    Canon is one of Japan’s most successful electronics groups, with imaging as one of Canon‘s core business areas.

    On February 10, 2015, Canon launched a public offer with a total value of about SEK 23.6 billion (US$ 2.8 billion) to acquire all outstanding shares of the Swedish surveillance video company Axis Aktiebolag. The public offer will start on March 3, 2015, and is expected to end on April 1, 2015.

    Canon aims for leadership in the global video surveillance market

    With this acquisition (if successful), Canon is aiming to become a global leader in the video surveillance market, which is estimated to be about US$ 15 billion globally.

    Axis Aktiebolag

    Axis is traded on the Nasdaq Stockholm (Large Cap) stock exchange. The trading symbol is AXIS, and the ISIN Code is SE0000672354.

    Axis to remain independent entity with current management

    Under the applicable Takeover Rules, Axis Board of Directors needs to express an opinion on the impact of the potential takeover on employment, on Canon’s strategic plans, and the impact of these strategic plans on employment and the communities in which Axis does business.

    Axis Board of Directors declared Canon’s intention to keep Axis AB as an independent entity under the current management, and continuing the current company culture, and to retain the Axis brand name.

    Axis Board of Directors’ statement of February 10, 2015 can be found here on the Axis website.

    Japan electronics industries – mono zukuri.

    Copyright 2015 Eurotechnology Japan KK All Rights Reserved

  • itelligence AG acquired by NTT Data

    itelligence AG acquired by NTT Data

    NTT DATA Business Solutions

    Largest global SAP reseller and one of the largest SAP solution providers

    On 23 October 2007, NTT DATA, NTT DATA Europe and itelligence AG announced a partnership, and NTT DATA announced to intention of an offer to acquire the shares at € 6.20 per share, about 37.2% higher than the closing price as of 22 October 2007.

    On 13 November 2007, NTT DATA Europe published an offer to acquire outstanding shares. This offer ended at midnight on 2 January 2008, and NTT DATA Europe acquired 20,974,169 (= 87%) of outstanding shares, corresponding to an acquisition value of € 130 million, and a total company valuation of € 149.5 million.

    On 29 January 2008, NTT DATA sold 2,459,523 shares to NTT Communications Corporation for € 15 million corresponding to € 6.10 per share, leaving NTT DATA with 18,514,646 shares.

    On 20 December 2012, NTT DATA Europe announced that it had acquired an additional 3,831,574 shares (= 12.77%) in another tender offer, and an additional 1,317,605 shares (= 4.39%) outside this offer. As a result, NTT DATA holds a total of 29,544,428 shares (= 98.43%). Following this tender offer, NTT DATA proposed a “squeeze out” (aktienrechtlicher Squeeze-out) under the German Stock Corporation Act to acquire the remaining outstanding shares.

    On 23 May 2013, the Annual General Meeting of itelligence AG approved the squeeze-out of remaining minority shareholders at a cash compensation of € 10.80 per share.

    itelligence AG was delisted from the Stock Exchange in June 2013.

    Thus itelligence AG on 23 May 2013 became a 100% owned subsidiary of NTT DATA Europe GmbH & Co KG, but will continue to operate as an independent group within the NTT DATA Group.

    NTT DATA Business Solutions

    In 2012 itelligence AG added to co-branding NTT DATA Business Solutions

    itelligence AG “We make the most of SAP solutions!”

    itelligence AG is a SAP solution provider.

    Company history:

    • 1989 Herbert Vogel and Wolfgang Schmidt founded S&P as a management consulting firm focused on introducing SAP. S&P was one of SAP’s first partner companies.
    • 1994 S&P was converted into “SVP GmbH” (Schmidt Vogel & Partner)
    • 1999 SVP GmbH was converted into SVC AG (Schmidt Vogel Consulting) and listed in an IPO
    • On 7 May 2001, the shareholders of SVC AG Schmidt Vogel Consulting agreed in the merger with APCON AG, forming itelligence AG
    • On 23 October 2007, itelligence AG entered into a partnership with NTT DATA
    • On 23 May 2013 itelligence AG became a 100% owned subsidiary of NTT DATA and the shares of itelligence AG were delisted

    itelligence AG acquisitions

    itelligence AG (and therefore NTT DATA via itelligence) has acquired a number of companies in the SAP solutions field:

    • 2008: acquires shareholding in SAPCON a.s.
    • 2009: ADELANTE SAS: On 19 March 2010 intelligence acquired 51% of ADELANTE SAS.
    • 2009: Chelford SAP Solutions: on 6 August 2010, itelligence AG acquired 100% of Chelford SAP Solutions
    • 2009: acquires RPF Consulting LLC
    • 2009: acquires participation in 2B Interactive
    • 2010: 2C Change A/S: on 14 June 2011, itelligence AG acquired 60% of 2C change A/S and an option to acquire the remaining 40%
    • 2011: acquired 100% of CONTEMPORARY plc
    • 2011: acquired Blueprint Management Systems
    • 2012: acquired 60% of interest in Elsys
    • 2013: on 1 Nov 2013 acquired 100% of Aster Group
    • 2013: itelligence AG acquired the SAP consulting, licensing and maintenance businesses from Software AG
    • 2014: on 1 October 2014 acquired Symphony Management Consulting

    Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

  • Integralis acquired by NTT Communications creating NTT Com Security AG

    Integralis acquired by NTT Communications creating NTT Com Security AG

    NTT Communications acquired 78.4% of Integralis AG which is renamed NTT Com Security AG

    by Gerhard Fasol

    Managed Security Services (MSS): Greschitz IT Security and Secode AB join NTT Com Security AG

    On June 30, 2009, NTT Communications announced a public tender offer for the shares of Integralis AG offering € 6.75 in cash per share. Integralis at that point was traded on the Frankfurt Stock Exchange (Xetra).

    In October NTT Communications acquired 78.4% of Integralis AG at a cost of € 59.1 million, to offer managed security services.

    Integralis AG

    The company was founded on 19 July 1993 as “Articon Fertigungsleitsysteme GmbH”, Articon Information Systems AG had IPO on the German Neuer Markt in 1998.

    Integralis Ltd was founded in 1989.

    On 29 February 2000, Articon Fertigungsleitsysteme GmbH and Integralis Ltd merged, and the resulting company was Articon-Integralis AG.

    Integralis renamed NTT Com Security AG

    On 24 June 2013, Integralis AG was renamed NTT Com Security AG.

    NTT Com Security AG

    NTT Com Security AG is a listed company, and the company’s shares are traded in the m:access segment of the open market of the Munich Stock Exchange. There are 13,036,844 outstanding shares.

    Share holding (according to NTT Com Security AG website):

    • 78.30% NTT Communications Corporation
    • 2.31% treasury stock
    • 19.39% free float

    NTT Com Security AG / Integralis acquires Austrian Greschitz IT Security

    Thomas Greschitz founded Greschitz IT Security 1995 to focus on internet security, in particular Check Point firewall systems in Graz. 2000 the company moved from Graz to Vienna.

    2007 Thomas Greschitz founded the company Greschitz Management GmbH.

    2008 Thomas Greschitz sells Greschitz IT Security to Integralis AG.

    2010 Thomas Greschitz leaves Greschitz IT Security to focus fully on Greschitz Management GmbH.

    NTT Com Security AG acquires Swedish Secode AB

    On August 11, 2010, NTT Communications Corporation announced the acquisition of all shares of Secode AB, a managed security services (MSS) provider operating in the Nordic countries. Secode AB’s security operation centers (SOCs) were folded into NTT Communications network of SOCs.

    On December 1, 2011, NTT Communications transferred the shareholding in Secode AB to Integralis AG (today’s NTT Com Security AG), making Secode AB a fully owned subsidiary or Integralis AG (Today NTT Com Security AG).

    Secode AB become part of NTT Com Security AG.

    About NTT and Japan’s telecom markets

    Copyright 2014 Eurotechnology Japan KK All Rights Reserved

  • net mobile AG majority stake acquired by NTT Docomo

    net mobile AG majority stake acquired by NTT Docomo

    globalizing Docomo’s mobile payment and content services

    bringing German mobile know-how to Japan

    On September 11, 2009, NTT Docomo announced a voluntary public tender offer for shares of net mobile AG. The tender offer was closed on November 27, 2009, and Docomo Deutschland GmbH acquired 6,126,567 shares at € 6.35 per share corresponding to 79.59% of the company, at a total acquisition cost of € 38.9 million, thus valuing net mobile AG at € 48.9 million.

    Acquisition of Bankverein Werther AG to create Net-m Privatbank 1891 AG

    On September 22, 2011, NTT Docomo announced the additional investment of up to € 28.4 million (YEN 3.1 billion) in net mobile AG, for the purpose of net mobile AG acquiring Bankverein Werther AG.

    The company goes back to the foundation of the financial cooperative “Vorschussverein zu Werther”, which was founded in 1877 in Werther, near Bielefeld in Germany. In 1891, the Vorschussverein zu Werther was transformed into the bank “Bankverein Werther Aktiengesellschaft”. During 2011, Net Mobile AG acquired 93% of shares of Bankverein Werther AG. On December 1, 2011, the traditional banking business, including the trademark “Bankverein Werther” was sold to the regional bank “Volksbank Paderborn-Höxter-Detmold eG“.

    With the sale of the traditional banking business and the tradename and brand, the bank reentered the market as Net-m Privatbank 1891 AG. At the end of 2012, Net Mobile AG acquired all remaining shares, so that Net-m Privatbank 1891 AG became a 100% owned subsidiary of net mobile AG.

    net mobile AG

    net mobile AG was founded on 9 October 2000 in Köln, and headquarters later the same year moved to Düsseldorf (Handelsregister/trade registry No. HRB 48022). In 2001, Net Mobile AG acquired SMS Infowelt. net mobile AG’s business at that time was marking info-SMS, ringing tunes, and other information services for mobile phones.

    net mobile AG is a public company, traded at the Frankfurt and München Stock Exchanges (Freiverkehr).

    Currently the market cap of net mobile AG is € 77 million (US$ 94 million).

    Share ownership (according to the net-mobile website):

    • 87,13 % DOCOMO Deutschland GmbH, a 100& subsidiary of NTT Docomo Inc.
    • 12,87% traded on the Frankfurt and München stock exchanges

    net mobile AG subsidiaries

    Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

  • Idemitsu Kosan may acquire Showa Shell Sekiyu KK for YEN 500 billion (US$ 4.1 billion)

    SHELL may exit Japan after 138 years here

    Idemitsu Kosan (出光興産株式会社) aims for market leadership

    On December 20, 2014, both Idemitsu Kosan and Showa Shell separately announced that they had entered into discussions of possible business reorganization, indicating that Idemitsu Kosan may acquire Showa Shell next year. Because Showa Shell Sekiyu KK is a Japanese company traded on the Tokyo Stock Exchange, such an acquisition would be via a tender offer for outstanding shares.

    With the development of fuel efficient cars and the shrinking population, refined oil products are a shrinking market in Japan, and a merger between Idemitsu Kosan and Showa Shell is a consequence of consolidation of this shrinking market.

    This merger would also mean a departure of Royal Dutch Shell from the Japanese market.

    Showa Shell Sekiyu KK (昭和シェル石油株式会社)

    Listed on Tokyo Stock Exchange (TKS5002)
    Market cap: YEN 384 billion (= US$ 3.2 billion)

    Although Showa Shell Sekiyu KK (昭和シェル石油株式会社) generally uses the famous yellow and red Shell logo, Showa Shell Sekiyu KK (昭和シェル石油株式会社) is not a wholly owned subsidiary of Royal Dutch Shell plc, but its a public company traded on the Tokyo Stock Exchange (TSE5002), with a large number of shareholders beyond Royal Dutch Shell plc, which is the largest shareholder with a holding of 35.0%.

    Given Royal Dutch Shell plc’s holding of 35.0%, this holding currently is worth approx. YEN 134.4 billion (US$ 1.12 billion).

    35% of the reported tender offer price would correspond to YEN 175 billion (US$ 1.44 billion)

    Shareholders:

    • 35.0% Royal Dutch Shell Plc
    • 14.9% Government of Saudi Arabia
    • 1.8% Nomura Asset Management Co., Ltd.
    • 0.9% Daiwa Asset Management Co. Ltd.
    • 0.9% Nikko Asset Management Co., Ltd.
    • 0.7% Grantham, Mayo, Van Otterloo & Co. LLC
    • 0.7% SEB Investment Management AB
    • 0.6% BlackRock Fund Advisors
    • 0.6% The Vanguard Group, Inc.
    • 0.6% Norges Bank Investment Management
    • 42.7% others
    • —————————————
    • 100.0% Total

    related: Solar Frontier KK

    Solar Frontier KK is a 100% owned subsidiary of Showa Shell Sekiyu KK, developing and manufacturing copper indium gallium selenide (CIGS) solar cells and related business, such as developing and operating solar power stations using CIGS cells.

    Revenues and market shares in Japan’s oil/gasoline markets

    With a merger of Idemitsu and Showa-Shell, the combined company will have a firm second position with a 30% market share, very close to the market leader JX Holdings with 34% market share.

    History of Shell and Showa Shell Sekiyu KK (昭和シェル石油株式会社) in Japan

    Showa Shell Sekiyu KK (昭和シェル石油株式会社) is the basis of the Royal Dutch Shell Group in Japan.

    Showa Shell Sekiyu KK (昭和シェル石油株式会社) was formed on January 1, 1985 by the merger of Showa Oil Co Ltd and Shell Sekiyu KK. The Royal Dutch Shell Group had a shareholding in Showa Oil Co Ltd since June 1951.

    Shell Sekiyu KK goes back to Samuel Samuel & Co, started by Samuel Samuel in partnership with his brother Marcus Samuel, 1st Viscount Bearstead (subsequently The Lord Bearstead and The Rt. Hon. The Viscount Bearsted Bt. – the founder of the Shell Transport and Trading Company), in Yokohama around 1876. Samuel Samuel & Co set up the Rising Sun Petroleum Co Ltd. In 1947, Rising Sun Petroleum Company was renamed Shell Sekiyu.

    Shell Sekiyu and Showa Sekiyu merged in 1985 to form Showa Shell Sekiyu.

    Copyright·©2014 ·Eurotechnology Japan KK·All Rights Reserved·

  • Toray acquires Saati SpA’s European carbon fiber fabric and prepreg business

    Toray acquires Saati’s European fabric business: Toray builds integrated supply chain in Europe

    Toray management program Project AP-G 2016: “thorough implementation of growth strategy through innovation and aggressive management”

    Toray acquires Saati’s European fabric business: Toray announced on 10 December 2014 the agreement to acquire the European carbon fiber fabric and prepreg business of Saati SpA. Toray will take over Saati’s plant located in Legnano (Milano Province) in January 2015, renaming the operations “Composite Materials (Italy) Srl (CIT)” and to become a fully owned subsidiary of Toray.

    Saati will continue to own and operate the Saati composite business in America.

    Saati SpA

    SAATI SpA was founded in 1935 to manufacture silk flour mesh fabrics, and employs about 850 people.

    Saadi SpA operates five divisions:

    • printing: graphics, electronics, apparel, glass etc
    • chemicals: screen printing, emulsions, screen prep and reclaim materials
    • filtration
    • protection: ballistic panels, helmets etc
    • composites: carbon fabrics, glass fabrics, prepreg, UD, etc

    Pre-preg

    Pre-Preg are pre-impregnated composite fibers with a matrix material such as epoxy.

    Toray’s medium term management program “Project AP-G 2016” (from April 2014 to March 2017)

    Toray’s Project AP-G 2016 is part of Toray’s long term vision “AP-Growth TORAY 2020“, and follows “Project AP-G 2013.

    Thorough implementation of growth strategy through “innovation and aggressive management”.

    Key benchmarks for FY 2016:

    • Consolidated net sales: YEN 2.3 trillion (US$ 23 billion)
    • Consolidated operating income: YEN 180 billion (US$ 1.8 billion)
    • ROA 8%
    • ROE 10%

    Toray’s long term vision “AP-Growth TORAY 2020“: become “a global top company of advanced materials”

    AP-Growth TORAY 2020 is a unified growth map for the next 10 years based on Toray’s corporate vision of “contributing to society through the creation of new value with innovative ideas, technologies and products”.

    Key KPI’s for AP-Growth TORAY 2020 (to be achieved around 2020)

    • consolidated net sales: YEN 3 trillion (US$ 30 billion)
    • Consolidated operating income: YEN 300 billion (US$ 3 billion)
    • Operating income margin: 10%
    • ROA: 10%
    • ROE: 13%

    Toray Industries, Inc. (東レ株式会社) “Innovation by chemistry” (化学による革新と創造) (TSE 3402, LSE TKK)

    Toray Industries, Inc. (東レ株式会社) was founded on 12 January 1926 with an investment by Mitsui Bussan. The company was incorporated as Touyou Rayon (東洋レーヨン) on 16 April 1926.

    In 1970 the company name was changed to Toray KK (東レ株式会社). Toray is the abbreviation of Touyou Rayon (レーヨン).

    Toray’s main business are:

    • fibers and textiles
    • plastics and chemicals
    • IT related products: films, color filters, products for IC production, graphics materials
    • carbon fiber composites
    • environment and engineering: water treatment membranes, materials for housing, environmental equipment
    • life science
    • other: analysis, research related services

    Copyright·©2015 ·Eurotechnology Japan KK·All Rights Reserved·

  • EU investment in Japan could be 50% higher had Vodafone succeeded in Japan

    EU investment in Japan could be 50% higher had Vodafone succeeded in Japan

    EU investment in Japan is about € 85 billion – it could be 50% higher!

    by Gerhard Fasol

    Vodafone-Japan: what could the value be today?

    Had Vodafone succeeded in Japan, Vodafone-Japan could be worth about US$ 50 billion today, about 1/2 of Vodafone’s total global market-cap today, and combined investment in Japan by European (EU) companies could be about 50% higher than it is today!

    With COLT about to acquire KVH, it might seem that this is the only foreign infrastructure based telecom provider left in Japan’s telecom market after a long string of management failures, including Vodafone, Cable & Wireless, Willcom, WorldCom and others.

    However, foreign investment in Japan’s telco/cloud infrastructure has not ended, and we believe the next wave including AWS, Microsoft, Google et al may become far more successful than the first wave.

    For companies considering investment or business expansion in Japan, it is useful to understand the potential market-capitalization which can be achieved in Japan in case of success, instead of just looking at the sales figures:

    • as an example, combined EU investment in Japan is estimated to be approx. € 85 billion (US$ 106 billion) in total,
    • had Vodafone succeeded in Japan, total investment in Japan by European (EU) companies would be about 50% higher than it is today.

    Why Vodafone-Japan could be worth US$ 50 billion (1/2 of Vodafone’s global market cap) had it been successful

    Let us estimate what Vodafone-Japan could be worth today, had it not failed:

    Since Vodafone-Japan’s sale to SoftBank on March 17, 2006, Japan’s telecom market has continuously grown, so we can expect today’s valuations to be considerably higher than in 2006. Lets assume that Vodafone-Japan had been successful, and had grown in sync with competitors NTT-Docomo and KDDI, and lets assume that Vodafone-Japan would have been able to continue J-Phone’s innovations to keep subscription figures and financial results in sync with KDDI. In this case, it would not be unreasonable to assume that Vodafone-Japan’s market capitalization today would be KDDI’s minus the value of KDDI’s global data-center business. Thus we arrive at an estimate, that Vodafone-Japan would have a market-cap value on the order of US$ 50 billion today.

    US$ 50 billion is about 50% of Vodafone’s total global valuation, and about 50% of the sum of all direct investments in Japan by all European (EU) companies combined.

    Thus, had Vodafone been successful in Japan, EU investments in Japan could be about 50% higher than they are today, and Vodafone’s global market cap could be 50% higher as well.

    Market capitalization (Dec 2, 2014):

    • NTT Group: US$ 61 billion
    • NTT-Docomo: US$ 68 billion
    • KDDI: US$ 58 billion
    • SoftBank: US$ 80 billion
    • Vodafone plc (global group): US$ 97 billion
    • Vodafone-Japan market cap, had it been successful (our estimate): US$ 50 billion corresponding to approx. 50% of Vodafone’s global market cap)
    • total investment in Japan by all European (EU) companies combined: € 85 billion (= US$ 106 billion)
      (see: EU-Japan direct investment register)
    EU investment in Japan is about € 85 billion - it could be 50% higher!
    EU investment in Japan is about € 85 billion – it could be 50% higher!

    Japan telecommunications industry market report

    Copyright (c) 2009-2015 Eurotechnology Japan KK All Rights Reserved

  • Colt to acquire KVH – the Tokyo based cloud and data center service provider

    Colt to acquire KVH – the Tokyo based cloud and data center service provider

    Colt to acquire KVH for YEN 18.595 billion (€ 130.3 million = US$ 160 million)

    by Gerhard Fasol

    The acquisition

    Both Colt and KVH were founded with investments by Fidelity Investments and associated companies, Colt in London in 1992, and KVH in 1999 in Tokyo, as telecommunications service providers for the financial industry and other industrial customers. While KVH remained 100% owned by Fidelity and associated companies, Colt was listed on the London Stock Exchange in 1996.

    Initially founded as telecommunications companies, both Colt and KVH have developed into “information delivery platforms” based on networking infrastructure, data centers, optical fibre networks and associated management and information services.

    On November 12, 2014, Colt announced the plan to acquire KVH for YEN 18.595 billion (€ 130.3 million = US$ 160 million) in cash from KVH’s owner Fidelity Investments.

    Since KVH is 100% owned by Fidelity Investments, and Colt have also been founded by Fidelity which is still a shareholder, the acquisition needs to be approved by independent Directors and by independent shareholders of Colt.

    A General Meeting of Colt’s shareholder has been announced for December 16, 2014 at 10:00am in Luxembourg where the approval of shareholders of Colt will be sought.

    Colt – the “information delivery platform”

    Colt was founded by James P Hynes (Jim Hynes) with investments from Fidelity Investments and related companies in 1992 in London, and went public with an IPO on London Stock Exchange in 1996.

    Colt operates 20 data centers and substantial optical fiber networks, and has more than 5000 employees.

    Colt’s annual revenues are € 1,575.8 million (= US$ 2 billion) in 2013.

    Colt market capitalization currently is UKL 1.19 billion (= US$ 1.9 billion).

    KVH – “Asia’s information delivery platform”

    KVH was founded by Fidelity Investments and related companies on April 2, 1999 in Tokyo.

    KVH operates 9 Data Centers, owns optical fiber networks in Japan and to major financial centers in the world, and has about 590 employees.

    KVH annual revenues are approx. € 133.6 million (= US$ 170 million) in FY2013, i.e. Colt is about 10 times bigger in terms of market cap and sales than KVH.

    KVH owns optical fibre, ethernet, data center data infrastructure in Tokyo, Osaka and other parts of Asia.
    KVH owns optical fibre, ethernet, data center data infrastructure in Tokyo, Osaka and other parts of Asia. This photograph shows KVH owned cable infrastructure in the center of Tokyo

    The planned acquisition values KVH at YEN 18.595 billion (€ 130.3 million = US$ 160 million), i.e. COLT is about 12 times bigger than KVH in terms of market capitalization/value.

    Implications of acquisition of KVH by Colt – view as a Japan (and Asia) market entry by Colt

    From the point of view of Colt, the acquisition of KVH – which has always been a sister company via the common investor Fidelity Investments, and common founder Jim Hynes – is a relatively low risk market entry into Japan and several other major Asian markets, and promises to have a very high chance of success for all parties.

    We need to keep in mind, that essentially all other large scale market entries into Japan by infrastructure based telecommunication operators have failed: Vodafone, Cable & Wireless, WorldCom’s market entries into Japan’s telecom markets have all failed, and to our knowledge KVH is the only remaining internationally owned telecom infrastructure company in Japan today.

    You can read a detailed discussion about why Vodafone failed in Japan in our blog here “Vodafone Japan could have been a business worth US$ 50 billion today. Why did Vodafone Japan fail and sell to SoftBank?”.

    Essentially, both Vodafone and Cable & Wireless failed in Japan’s telecom markets, because they did not have the multitude of skills and know-how needed to manage a telecommunications business in Japan in a competitive manner. Colt with the acquisition of KVH acquires this know-how, and KVH at the same time has been an internationally managed company from the outset, so that Colt avoids the risks of acquiring a 100% Japanese companies such as Vodafone had done by acquiring Japan Telecom, with all the cultural issues that this entails.

    At the same time, we also need to keep the scale in mind. While KVH has a market capitalization (i.e. the purchase price) of US$ 160 million, it can be argued that Vodafone-Japan could be expected to have a capitalization of around US$ 60 billion today had it been successful – i.e. about 375 times larger than KVH.

    Japan’s largest telecommunication operator NTT currently has a market capitalization of US$ 62 billion, i.e. about 390 times larger than KVH, while SoftBank’s market capitalization is about 500 times larger than KVH’s.

    Thus, if we see Colt’s acquisition of KVH as a market entry into Japan by a European telecom operator, then this is on an approx. 300-400 times smaller scale than Vodafone’s failed market entry into Japan, and with far better circumstances, and a far higher chance of success, and in our view with very carefully controlled risks.

    Without doubt, a merger of KVH with Colt was on the minds of Fidelity Investments and Jim Hynes, when they founded both KVH and Colt in the 1990s.

    Japan telecommunications industry market report

    Copyright 2014 Eurotechnology Japan KK All Rights Reserved

  • Hitachi Zosen Inova AG acquires Energy-from-Waste (EfW) EPC Axpo Kompogas Engineering AG (Komeng)

    Hitachi Zosen Inova AG acquires Energy-from-Waste (EfW) EPC Axpo Kompogas Engineering AG (Komeng)

    Waste is our Energy! – Energy-from-Waste (EfW)

    by Gerhard Fasol

    Hitachi Zosen Inova AG acquires Axpo Kompogas Engineering AG

    AXPO agreed on October 24, 2014 to sell its subsidiary Axpo Kompogas Engineering AG to Hitachi Zosen Inova AG (ZHI AG). Closing is in mid December 2014.

    Axpo Kompogas Engineering AG (Komeng)

    Axpo Kompogas Engineering AG (Komeng) is an EPC (engineering, planning, construction) company planning and constructing dry fermentation plants using the Kompogas process, which produces biogas and compost from biomass via a dry fermentation process.

    Address: Flughofstrasse 54, CH-8152 Glattbrugg, Switzerland
    CEO: Bernard C. Fenner
    Business: EPC (engineering, procurement, construction) and maintenance of Kompogas plants
    Established: 2013
    Capital: approximately SFR 3.6 million (YEN 425 million)

    Kompogas method generates biogas by methane fermentation from kitchen and other organic waste

    The Kompogas process was developed about 1988-1989 by the Swiss entrepreneur Walter Schmid initially on his private balcony.

    The Kompogas process produces biogas and compost from biological, organic waste via a fermentation process. The resulting biogas can be used for cars and trucks, and the compost as organic fertilizer.

    AXPO is an electricity operator, generating, distributing, selling and trading electricity, and is fully owned by cantons of north-eastern Switzerland.

    Hitachi Zosen Inova AG (ZHI AG), which became a subsidiary of Japan’s Hitachi Zosen Corporation (日立造船株式会社) with the acquisition of the bankrupt AE&E Inova Holding AG on December 20, 2010, acquires Axpo Kompogas Engineering AG, as of Nov. 5, 2014.

    Hitachi Zosen Inova AG (HZI AG) history

    Hitachi Zosen Inova AG (HZI AG) was created when Hitachi Zosen acquired AE&E Inova Holding AG on December 20, 2010, after it filed for bankruptcy in Zurich on December 3, 2010, read details here.

    AE&E Inova Holding AG goes back to a department for thermal waste management of the Gesellschaft der Ludwig von Roll’schen Eisenwerke which was founded in 1823.

    Japan electronics industries – mono zukuri.

    Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

  • JFE Engineering acquires boiler maker Standardkessel Power Systems Holding GmbH

    JFE Engineering globalizes and strengthens biomass and waste electricity generation systems business

    Standardkessel-Baumgarte: from a classic boiler maker to biomass and waste-to-energy power plants

    JFE Engineering acquires all outstanding shares of Standardkessel Power Systems Holding GmbH, for approximately YEN 10 billion (US$ 87 million), from current shareholders.

    Standardkessel (founded 1925) and Baumgarte (founded 1935) started as classic boilermakers, and today supply turnkey power plants and power plant components for fossil energy sources, e.g coal, gas and oil, and also for alternative energy carriers, e.g. biomass, municipal waste, and industrial waste.

    Standardkessel Power Systems Holding GmbH is a holding company owning 100% of the shares in the Standardkessel Baumgarte Group, which consists of:

    • Standardkessel GmbH (founded 1925)
    • Baumgarte GmbH (founded 1935)
    • Standardkessel Baumgarte Service Holding GmbH (founded 2008)

    Standardkessel-Baumgarte were founded as classic boiler makers, and developed into makers of biomass and waste-to-energy power plant suppliers and service group.

    By acquiring Standardkessel-Baumgarte, JFE Engineering can strengthen overseas business, accelerate globalization and move into the biomass and waste-to-energy electricity and power generation sector.

    Copyright·©2014 ·Eurotechnology Japan KK·All Rights Reserved·

  • Heraeus Kulzer acquires EGS Srl (Enhanced Geometry Solutions)

    Japanese companies’ strategy to overcome cultural post-merger problems: European subsidiaries acquire

    Heraeus Kulzer acquires EGS, expanding both Mitsui Chemicals’ foot print in Europe and global market penetration for Mitsui Chemicals’ dental supplies business

    Japanese companies are well known to have substantial difficulties with post merger integration as a consequence of massive cultural differences which need to be overcome for successful acquisitions. One way to mitigate these difficulties is for Japanese companies to acquire a substantial European company, make this acquisition a success, and then acquire additional companies via this first successfully integrated subsidiary. One example for this path is Dentsu with its Aegis acquisition, see: Dentsu acquires Aegis. Subsequently, Aegis acquires a string of companies all over Europe for Dentsu.

    Mitsui Chemicals follows a similar strategy by first acquiring Heraeus Kulzer, which then again acquires the CAD/CAM specialist Enhanced Geometry Solutions, EGS Srl.

    Enhanced Geometry Solutions, EGS Srl, makes 3D scanners, CAD software, and digital tools for scanning, modeling, designing workflow in dental laboratories.

    Copyright (c) 2016-2017 Eurotechnology Japan KK All Rights Reserved

  • Panasonic self-driving car technology: Ficosa investment

    Panasonic self-driving car technology: Ficosa investment

    Panasonic restructures away from TVs and other commodities to automotive parts

    by Gerhard Fasol

    Panasonic self-driving car technology

    As part of the restructuring efforts, Panasonic invests in Spanish car parts maker Ficosa in order to jointly develop Panasonic self-driving car technology.

    We have documented in our blogs and reports on Japan’s electronics industry how Japan’s electronics giants lost their global dominating advantages as TVs and other electronics products became commodities, and Japanese electronics makers were blind sided by Apple, Samsung and many other faster innovators. Japanese electronics companies including Panasonic were slow to recognize that their market leading positions were rapidly melting away, and were slow to change.

    As part of the restructuring efforts, Panasonic sold several semiconductor fabs to Tower-Jazz, and in a move into car parts, Panasonic invests about US$ 275 million to acquire an approximately 50% stake in the Barcelona based Spanish car parts maker Ficosa International, in order to jointly develop self-driving car technology.

    Ficosa had acquired the Sony Barcelona Technology Center

    Interestingly, Ficosa had previously in 2010 acquired “SONY Barcelona Tec” SONY Barcelona Technology Center located at Viladecavalls near Barcelona partly alone, and partly in a joint-venture with the infrastructure company Comsa Emte SL.

    Japan electronics industries – mono zukuri.

    Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

  • Nippon Steel & Sumikin Engineering Co., Ltd. acquires Fisia Babcock Environment GmbH

    Nippon Steel & Sumikin Engineering Co Ltd (Nippon Steel & Sumitomo Metal Corporation, Tokyo Stock Exchange Code 5401) on May 7, 2004 acquired 100% of the shares of Fisia Babcock Environment GmbH (located in Gummersbach, Germany) from Impregilo International Infrastructure N. V. (which is wholly owned by Salini Impregilo S.p.A., Milano, Italy), for EURO 139.3 million.

    Copyright·©2014 ·Eurotechnology Japan KK·All Rights Reserved·

  • Video surveillance specialist Milestone Systems A/S acquired by Canon

    Canon acquires video surveillance specialist Milestone Systems A/S in June 2014

    Milestone Systems A/S is a leading IP based video management software (VMS) and network video recorder (NVR) provider for video surveillance

    Milestone System was founded in 1998 to apply IP technology from the financial sector to the surveillance video sector, which had previously been predominantly analogue.

    10 July 2008, Index Ventures announced an investment of $27 million (17 million Euros) into Milestone Systems.

    IHD estimates that the video surveillance market size is on the order of US$ 13 billion, while Milestone Systems A/S is estimated to have an 8% market share.

    Milestone Systems A/S

    Milestone Systems A/S

    Founded in 1998 by Henrik Friborg and John Blem by applying their knowledge of IP technology for real-time financial systems to digital video surveillance, replacing previously mainly analogue recording techniques.

    In June 2014 Milestone Systems A/S was acquired by Canon, reports to Canon Europe, but works as a stand-alone company.

    Revenues: DKK 709 million (= US$ 110 million) (2016)
    Operating incomee: DKK 121 million (= US$ 19 million) (2016)
    Net income: DKK 42 million (= US$ 6.5 million) (2016)
    Employees: 600 (2015)

    Copyright (c) 2017 Eurotechnology Japan KK All Rights Reserved

  • DC Storm acquired by Rakuten Marketing to strengthen marketing analytics and attribution

    DC Storm acquired by Rakuten Marketing to strengthen marketing analytics and attribution

    Rakuten acquires marketing attribution specialist

    Following acquisition of Adometry by Google and of Convertro by AOL

    On May 28, 2014, Rakuten Marketing announced the acquisition of the Brighton (UK) based marketing attribution specialist DC Storm.

    Although terms of the acquisition were not disclosed, Google on May 6, 2014 acquired Adometry for about US$ 150 million, and AOL on the same day acquired Convertro for US$ 101 million. Therefore we assume that Rakuten Marketing probably also paid on the order of US$ 100 million for DC Storm.

    Marketing attribution: measuring return (ROI) on marketing investment

    Marketing attribution has its origin in the work of Austrian psychologist Fritz Heider‘s work on Attribution Theory, and his seminal work “The Psychology of Interpersonal Relations” of 1958.

    Attribution is the process by which people explain the causes for actions, and models for these processes (source: Wikipedia).

    Marketing attribution develops understanding of which combination of events leads individuals to take particular actions, e.g. to conclude a purchase for example (source: Wikipedia Attribution (marketing))

    Marketing attribution specialist companies have recently been very popular acquisition targets:

    • Convertro (about 60 employees) acquired by AOL for US$ 101 million, announced on May 6, 2014
    • Adometry (about 130 employees) acquired by Google for an estimated US$ 150 million, announced on May 6, 2014
    • DC Storm acquired by Rakuten Marketing, announced on May 28, 2014
    • Visual IQ ? (about 190 employees)
    • C3 Metrics
    • DataSong
    • Encore Metrics

    DC Storm

    DC Storm is headquartered at Brighton, UK, with offices in US and in Germany. DC Storm was founded in 2004 by current CEO, Seth Richardson, who designed and coded the initial versions of DC Storm’s digital marketing analysis platform.

    DC Storm offers digital marketing companies attribution tools, analysis and consulting services, and tag management.

    Copyright (c) 2014-2015 Eurotechnology Japan KK All Rights Reserved

  • Hitachi Engineering Europe formed by acquisition of Valcom S.r.l.

    Hitachi Engineering Europe formed by acquisition of Valcom S.r.l.

    Hitachi acquires Valcom, electrical and instrumentation engineering for oil and gas plant systems

    by Gerhard Fasol

    Hitachi Engineering Europe: the new name for Valcom

    Hitachi acquired all outstanding shares of Valcom S.r.l. and will rename the company “Hitachi Engineering Europe S.r.l.”

    Valcom S.r.l. is an Engineering, Procurement, Construction (EPC) company, headquartered in Milano (Italy), in the following fields:

    • Oil and gas field development, electrical and instrumentation engineering business for oil and gas plant systems
    • Fossil fuel and nuclear power plants
    • Pipelines
    • Refineries and petrochemical facilities
    • Chemical and service industries
    • Airport and communications networks
    • Power transmission lines
    • Renewable energy power plants
    • Non-residential buildings (hospitals, universities, offices, etc.)
    • Floating Production, Storage and Offloading (“FPSO”) systems
    • Engineering business related to electrical equipment (transformer substation, power distribution, drive systems, and lighting equipment, etc.) needed to operate machinery, and measurement equipment (sensors, etc.) and to control plant systems

    Japan electronics industries – mono zukuri.

    Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

  • Lesmobilizers SAS acquired by Dentsu and to be integrated into Isobar

    Lesmobilizers SAS acquired by Dentsu and to be integrated into Isobar

    Dentsu acquires French mobile marketing agency Lesmobilizers

    Lesmobilizers SAS to be integrated into Dentsu’s Isobar

    by Gerhard Fasol

    On March 4, 2014 Dentsu announced further European investments in its quest to strengthen its global footprint: Dentsu acquires French mobile marketing agency Lesmobilizers SAS.

    Lesmobilizers SAS – Mobile Applications Creators

    Lesmobilizers SAS are a dedicated agency in design and development of mobile applications. The company was founded in March 2010 in Paris, France, and employees about 10 people.

    In the year ending December 2012, gross profits were about EURO 0.8 million.

    Dentsu and Dentsu-Aegis

    Dentsu dominates Japan’s advertising space, and is a very very strong force in Japan’s media industry sector, through control and management of major advertising channels with an overwhelming market share in Japan, and has been working hard to leverage its creative power and strength in Japan into a larger global footprint.

    A big step forward towards a larger global footprint for Dentsu was the acquisition of the London based Aegis Group, announced on July 5, 2012.

    Report on Japan’s media landscape (150 pages, pdf file):

    Copyright 2009-2015 Eurotechnology Japan KK All Rights Reserved

  • Tokyo AIM became the Tokyo PRO market, and London Stock Exchange quits Japan. Here is why!

    Tokyo AIM: LSE sells its share in the Tokyo AIM joint venture to Tokyo Stock Exchange and leaves Japan

    Initially, London Stock Exchange and Tokyo Stock Exchange created Tokyo AIM as a joint-venture company in order to create a jointly owned and jointly managed Tokyo AIM, modeled according to the very successful London AIM model.

    Nikkei: “Tokyo Stock Exchange has learnt enough from the London Stock Exchange to set up a similar market on its own”

    However, on March 26, 2012 NIKKEI reported that “Tokyo Stock Exchange has learnt enough from the London Stock Exchange to set up a similar market on its own. TSE plans to improve the rules of its own new market, so that TSE can create a more welcoming market” (our translation of the original Japanese NIKKEI article to English).

    London Stock Exchange withdrew from the venture, and Tokyo Stock Exchange took over 100% of Tokyo AIM. Essentially, London Stock Exchange AIM’s venture into Japan failed, while the stock market created by the venture continues without London Stock Exchange’s involvement. As explained in our blog here, these events are very very similar to what happened with NASDAQ about 10 years earlier!

    Tokyo AIM is renamed TOKYO PRO Market and TOKYO PRO BOND Market

    In 2012, the name was changed from Tokyo AIM, to TOKYO PRO Market and TOKYO PRO BOND Market. Details can be found here:

    Some background about the mistakes which led to the failure of both NASDAQ and London Stock Exchange AIM to build business in Japan can be found here:

    Copyright·©2014 ·Eurotechnology Japan KK·All Rights Reserved·

  • LIXIL and Development Bank of Japan (DBJ) together acquire 87.5% of GROHE Group

    LIXIL and Development Bank of Japan (DBJ) together acquire 87.5% of GROHE Group

    LIXIL (“Link to Good Living”) pursues strategy to become global leader in building materials and housing equipment industry

    LIXIL acquires 87.5% of German GROHE Group (“Pure Freude an Wasser”), valuing GROHE at € 3.06 billion

    Lixil Corporation follows the strategy to become the global leader in building materials and housing equipment, and on January 21, 2014, together with the Development Bank of Japan, acquired 87.5% of the German GROHE Group. The shares were acquired from Glacier Luxembourg One Sarl, which is indirectly owned by TPG Capital (formerly Texas Pacific Group) and DLJ Merchant Banking Partners (“DLJ MBP”), an affiliate of Credit Suisse and traces its roots to Donaldson, Lufkin & Jenrette.

    The acquisition deal structure is quite complex. Voting rights are split 50%/50% between Lixil and Development Bank of Japan (DBJ), Lixil uses YEN 160 billion of non-recourse loans. Lixil has a call option on DBJ share ownership, allowing Lixil to acquire all of Grohe.

    • Lixil’s advisors:
      • Financial advisors: SMBC Nikko Securities, BNP Paribas, Development Bank of Japan (DBJ), Moelis
      • Legal advisors: Linklaters, Mori Hamada & Matsumoto, Nagashima Ohno & Tsunematsu
    • Grohe’s advisors:
      • Financial advisors: Acxit Capital Management, Goldman Sachs, Credit Suisse, Morgan Stanley
      • Legal advisors: Clifford Chance, Nishimura & Asahi, Weil Gotshal & Manges

    Lixil Corporation

    Lixil Corporation (“Link to Good Living”), TSE-Code 5938, manufactures building materials and housing equipment and operates home and home building centers. To become global leaders in these fields, LIXIL has recently acquired:

    • American Standard, in August 2013 for US$ 542 million
    • American Standard Asia Pacific, in August 2009
    • Permasteelisa Group, in 2011
    • Shanghai Meite Curtain Wall System in 2011
    • LG-TOSTEM, strategic alliance formed in 2010
    • Haier-LIXIL, strategic alliance formed in 2011

    LIXIL was formed on April 1, 2011 by the merger of:

    • Tostem Corporation
    • Inax Corporation
    • Shin Nikkei Company, Ltd.
    • Toyo Exterior Co., Ltd.
    • Sun Wave Corporation

    and has been growing aggressively through acquisitions with the target to achieve 50% sales internationally outside Japan.

    Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

  • Socializer acquired in Poland by Dentsu, joins Isobar

    Socializer acquired in Poland by Dentsu, joins Isobar

    Dentsu acquires Socializer acquired in Poland

    by Gerhard Fasol

    Socializer joins Isobar

    On January 20, 2014 Dentsu announced further European investments in its quest to strengthen its global footprint: Dentsu acquires Poland’s social media agency Socializer

    Socializer SA

    Socializer SA was founded in Warsaw, Poland, in March 2011, earned gross profits of UKL 1.7 million in the financial year ended December 2012, and employs about 130 people.

    Socializer provider advertising and communications services using Social Media (SNS).

    Dentsu and Dentsu-Aegis

    Dentsu dominates Japan’s advertising space, and is a very very strong force in Japan’s media industry sector, through control and management of major advertising channels with an overwhelming market share in Japan, and has been working hard to leverage its creative power and strength in Japan into a larger global footprint.

    A big step forward towards a larger global footprint for Dentsu was the acquisition of the London based Aegis Group, announced on July 5, 2012.

    Report on Japan’s media landscape (150 pages, pdf file):

    Copyright 2009-2015 Eurotechnology Japan KK All Rights Reserved

  • Japanese insurance SOMPO acquires UK reinsurer Canopius Group Ltd

    Japanese insurance SOMPO part of NKSJ Holdings acquires UK reinsurer Canopius Group from Bregal Capital

    In order to globalize, Japanese insurance company Sompo Japan (株式会社損害保険ジャパン), part of the insurance group NKSJ Holdings (NKSJホールディングス株式会社, TSE / JPX: No. 8630) announced yesterday the acquisition of 100% of the UK re-insurer Canopius Group Limited, operating on Lloyd’s for UKL 594 million (US$ 972 million), from the current owners. Current majority owner of Canopius is Bregal Capital.

    Canopius will keep the brand, company name, and management team.

    Canopius: one of the top ten insurers on the Lloyd’s market

    Canopius, is an insurance group, one of the top ten insurers in the Lloyd’s market, was founded in December 2003, almost exactly ten years ago, via a Management Buy-Out (MBO) with UKL 25 million capital, which grew about twenty-fold to about UKL 500 million today, and today has about 560 employees.

    Canopius is named after Nathaniel Canopius, native of Crete, who studied at Balliol College, Oxford, apparently introduced coffee drinking to Oxford around 1637 (according to the Canopius website), and later became Archbishop of Smyrna (Source: “Anglicans and Orthodox, Unity and Subversion, 1559-1725”, by Judith Pinnington, 2003, ISBN 0-85244-577-6, page 15).

    Sources: press announcements by the companies, websites.

    Japan to EU investment trend

    While European investments in Japan are steady, Japanese corporations are investing heavily in Europe, approximately EURO 10 billion per year, in order to globalize and to expand their global foot print, and to acquire new know-how, which is clearly both the case here.

    Copyright·©2013 ·Eurotechnology Japan KK·All Rights Reserved·

  • Japan’s direct investments in EU flourish, while EU investments in Japan stagnate

    Japan’s direct investments in EU flourish, while EU investments in Japan stagnate

    Investment flow between EU and Japan shows strong impact from the Lehmann shock economic downturn. Investment flow from EU to Japan remains at relatively low levels around EURO 1 billion annually, while investments by Japanese companies in the EU are on the order of EURO 10 billion per year currently.

    M&A and direct investment (FDI) transactions:

    Foreign direct investment (FDI) flow between EU and Japan
    Foreign direct investment (FDI) flow between EU and Japan

    Copyright·©2013 ·Eurotechnology Japan KK·All Rights Reserved·

  • EU Japan investment stock

    EU Japan investment stock

    EU Japan investment stock

    EU Japan investment: Foreign direct investment (FDI) stock between EU and Japan
    Foreign direct investment (FDI) stock between EU and Japan

    EU Japan investment: EU to Japan

    EU to Japan investment register

    EU investments in Japan have been relatively constant around EURO 80 billion. There has been a marked reduction in EU investment in Japan in 2006 due to the withdrawal of Vodafone from Japan with the sale of Vodafone KK to Softbank for approx. EURO 12 billion (find details of the Vodafone-SoftBank M&A transaction here). This reduction of EU investment stock in Japan is clearly visible in the graphics below in 2006 and 2007.

    EU Japan investment: Japan to EU

    Japan to EU investment register

    Japanese investments in EU are steadily increasing, as Japanese companies are seeking to grow business outside Japan’s saturated market, and as Japanese companies acquire European companies for market access, technology and global business footprint. In 2012 the total investment stock of Japanese companies in the EU-27 has reached around EURO 150 billion.

    Copyright·©2013 ·Eurotechnology Japan KK·All Rights Reserved·

  • Supercell: SoftBank and GungHo acquire 51% for US$ 1.5 billion

    Supercell: SoftBank and GungHo acquire 51% for US$ 1.5 billion

    Supercell valued at approx. US$ 3 billion

    Supercell investment leverages paradigm shift, time shift and market disconnects

    Smartphones and the “freemium” business models are bringing a dual paradigm shift to games and create a new truly global market. To take advantage of this global paradigm shift, its necessary to overcome the cultural disconnects between markets. SoftBank and GungHo‘s investment in the Finnish smartphone/tablet game maker Supercell, announced on Oct. 15, will help to overcome the disconnect between Japan’s and other game markets for both Supercell and GungHo.

    The disconnect between Japan and other countries is often surprising – when BusinessWeek in 2006 commented on rumors that SoftBank might introduce an Apple “iPod-Phone” to Japan, BusinessWeek remarked that “Apple would normally never talk to a small-fry such as SoftBank” …. at that time SoftBank’s annual revenues were about twice Apple’s, and BusinessWeek printed my correction pointing out that SoftBank even at that time was anything but a “small fry”.

    One of SoftBank‘s aspects is it’s “time-shift” investment model, another is SoftBank‘s 30/300 year vision – both are important factors to understand the Supercell investment.

    Supercell investment: Comparing Supercell's US$ 3 billion valuation with Japanese game companies (note that the market cap for the full SONY Group is shown here)
    Comparing Supercell’s US$ 3 billion valuation with Japanese game companies (note that the market cap for the full SONY Group is shown here)

    This Figure contrasts the market caps of new mobile and smartphone centric game companies (GungHo, Supercell, DeNA and GREE) with traditional console, video game and arcade game companies.

    SoftBank announced that because of the majority investment, Supercell will become a subsidiary of SoftBank, and GungHo will account for Supercell’s profit/loss under the equity method.

    Supercell investment: Comparing Supercell with Japanese game companies and SoftBank
    Comparing Supercell with Japanese game companies and SoftBank

    GungHo and Supercell both are top-ranking mobile game companies: GungHo inside Japan with “Puzzle and Dragons”, and Supercell outside Japan with “Hay Day” and “Clash of Clans”. Expect both to leverage each other’s resources.

    Both GungHo and Supercell show explosive growth:

    GungHo’s operating profits increased 4050% (x 40) for Jan-June 2013 compared to the same period one year earlier.
    Supercell’s revenues (mainly in-game purchases) jumped 500x from EURO 151,000 in 2011 to EURO 78 million in 2012.

    Culture can be an issue between Japan and other countries, however, SoftBank has invested in more than 1000 comparable companies, and many of SoftBank’s investments have been outstandingly successful including Alibaba and Yahoo.

    However, investment and management support by SoftBank does not automatically guarantee success in Japan – despite SoftBank’s investment and support, Zynga closed operations in Japan earlier this year. Success in Japan will remain Supercell’s responsibility, despite SoftBank’s and GungHo’s help and investment – as Zynga can tell.

    Copyright (c) 2013-2015 Eurotechnology Japan KK All Rights Reserved

  • Otsuka buys Astex Pharmaceuticals (NASDAQ:ASTX) for US$ 886 million

    Astex Pharmaceuticals is an oncology drug discovery company based on the Pyramid drug discovery platform in Cambridge (UK)

    Otsuka buys Astex in a tender offer for US$ 886 million

    Otsuka buys Astex Pharmaceuticals (formally Astex Therapeutics, UK). Astex Therapeutics is a oncology drug discovery company based in Cambridge, England, and at the time of acquisition was listed on NASDAQ (ASTX).

    The acquisition was done through a tender offer at an offer price of US$ 8.50 per share, a 48% premium on the stock price, starting on 13 September 2013, and completed on 10 October 2013, followed by a merger on 11 October 2013.

    Total acquisition capital was US$ 886 million.

    Astex Therapeutics

    Astex Therapeutics is a oncology drug discovery company, based on a proprietary fragment based “drug discovery platform” Pyramid.

    Astex Therapeutics was founded in 1999 in Cambridge, England, by

    On 7 April 2011, Astex was acquired by SuperGen (NASDAQ:SUPG). The surviving company was Astex (NASDAQ:ASTX). This acquisition closed on July 2011.

    Astex business model based on up-front technology access fees, success fees for milestones and product royalties to fund internal R&D

    Astex Therapeutics has developed a business model where revenues offset cash burn. Fee income provides funding for Astex R&D: Astex does not work on a fee-for-service basis, but achieves substantial upfront cash technology access fees, and agrees on success fees based on achieved development milestones, and royalties on product sales.

    Examples of major agreements under this business model:

    • 6 December 2005: Novartis, upfront access fee and + deferred equity payments of US$ 25 million, potential of up to US$ 520 in fees. World-wide license for cell-cycle inhibitor AT9311, option to license cell cycle inhibitor AT7519
    • 2008: Janssen, US$ 37 million upfront access fee and equity and initial research funding
    • 2009: GSK, US$ 33 million upfront fee and equity

    Otsuka Pharmaceutical Co., Ltd. (大塚製薬株式会社)

    Otsuka Pharmaceutical Co., Ltd. (大塚製薬株式会社) is a Japanese pharmaceutical company, founded on 10 August 1964, traded on the Tokyo Stock Exchange (TYO:4578).

    Copyright (c) 2017 Eurotechnology Japan KK All Rights Reserved

  • Ymedia SL and Wink TTD SL investments by Dentsu in Spain

    Ymedia SL and Wink TTD SL investments by Dentsu in Spain

    by Gerhard Fasol

    Dentsu further expands the global footprint in Spain

    On September 20, 2013 Dentsu announced further European investments this year in its quest to strengthen its global footprint:

    • acquisition of 51% of Ymedia SL via Aegis Media Iberia, full 100% acquisition expected by 2019
    • acquisition of 31.8% of Wink TTD SL via Aegis Media Iberia, full 100% acquisition expected by 2019

    Ymedia SL

    Ymedia SL is a full-service media agency, founded in December 2006 and based in Madrid, Spain, employing about 50 people.
    Gross profits in the year ending Dec 2012 were about UKL 8.8 million.

    Wink TTD SL – “Transforming through Digital”

    Wink TTD SL: a communication agency for digital transformation.

    Gabriel Saenz de Buruaga (former worldwide CEO for Havas Digital) and Alejandro Esteves (former Managing Director of Aegis Media, Spain) founded Wink TTD SL in November 2011 in Madrid, Spain, employing about 40 people.
    Gross profits in the year ending Dec 2012 were about UKL 5.1 million.

    Wink TTD SL has the following six founding principles:

    1. Fast fish eat slow fish
    2. Sector exclusivity
    3. Best talent in the market
    4. Senior talent dedication to clients
    5. We charge for what we do

    Dentsu and Dentsu-Aegis

    Dentsu dominates Japan’s advertising space, and is a very very strong force in Japan’s media industry sector, through control and management of major advertising channels with an overwhelming market share in Japan, and has been working hard to leverage its creative power and strength in Japan into a larger global footprint.

    A big step forward towards a larger global footprint for Dentsu was the acquisition of the London based Aegis Group, announced on July 5, 2012.

    Report on Japan’s media landscape (150 pages, pdf file):

    Copyright 2009-2015 Eurotechnology Japan KK All Rights Reserved

  • Arkadin’s [enjoy sharing] 91.2% AXA stake to be sold to NTT Communications

    Arkadin’s [enjoy sharing] 91.2% AXA stake to be sold to NTT Communications

    Arkadin International SAS valued at approx. US$ 463 million

    Collaboration-as-a-Service (CaaS)

    On August 5, 2013, NTT Communications (NTT Com) announced that it will acquire 91.2% of the shares of the French conference and collaboration specialist Arkadin International SAS from current investors AXA Private Equity (now: Ardian Investment) and other investors.

    The valuation is estimated at approximately US$ 463 million.

    After the sale of 91.2% to NTT Communications, ownership will be as follows:

    • 91.2% NTT Communications
    • 8.8% management

    Arkadin International SAS [enjoy sharing] – Collaboration-as-a-Service (CaaS)

    Arkadin International SAS is one of the world’s largest providers of audio, web, video conferencing and unified communications services.

    The company was founded in 2001 by Olivier de Puymorin, and today serves about 37,000 customers in 32 countries.

    NTT Communications Corporation (エヌ・ティ・ティ・コミュニケーションズ株式会社)

    NTT Communications Corporation (エヌ・ティ・ティ・コミュニケーションズ株式会社) is a fully owned subsidiary of NTT Corporation, Japan’s incumbent telecommunications group.

    NTT Communications offers a wide range of data services, data centers, global communications services both in Japan and globally. Main data are:

    • 8000 employees
    • revenues: 981 billion yen (US$ 8 billion)

    For a comprehensive analysis of Japan’s telecom industry sector see our Report on Japan’s telecommunications industry.

    Copyright·©2013-2015 ·Eurotechnology Japan KK·All Rights Reserved·

  • Simple Agency srl investment by Japan’s advertising giant Dentsu

    Simple Agency srl investment by Japan’s advertising giant Dentsu

    by Gerhard Fasol

    Dentsu further expands the global footprint in Europe

    Social, content and digital marketing empowerment based in Italy

    On July 30, 2013 Dentsu announced another European investment this year in its quest to strengthen its global footprint: the acquisition of a 70% majority share in the Italian
    Simple Agency via Aegis Media Italia, a of subsidiary Dentsu Aegis Network Ltd.

    Simple Agency srl – “Digital Marketing Empowerment”

    Simple Agency srl was founded in April 2008 in Milan, Italy, by Marco Caradonna, and employs about 30 people.

    Simple Agency has two parts:

    Dentsu and Dentsu-Aegis

    Dentsu dominates Japan’s advertising space, and is a very very strong force in Japan’s media industry sector, through control and management of major advertising channels with an overwhelming market share in Japan, and has been working hard to leverage its creative power and strength in Japan into a larger global footprint.

    A big step forward towards a larger global footprint for Dentsu was the acquisition of the London based Aegis Group, announced on July 5, 2012.

    Japan’s media sector – research report

    Copyright (c) 2009-2015 Eurotechnology Japan KK All Rights Reserved

  • Social Embassy BV acquired by Dentsu

    Social Embassy BV acquired by Dentsu

    Dentsu further expands the global footprint in Europe

    Content & community management, brand engagement, social media, SNS advertising based in The Netherlands

    by Gerhard Fasol

    On May 23, 2013 Dentsu announced another European acquisition within the single month of May 2013 in its quest to strengthen its global footprint: the acquisition of the leading Dutch social media agency Social Embassy BV via its European subsidiary Dentsu Aegis Network Ltd.

    Social Embassy BV

    Social Embassy BV is The Netherlands’ largest social media agency, based in Amsterdam. The company was founded in 2008 by Steven Jongeneel and co-founder Niels van der Velden, and focuses on strategy & insights, content & community management, creative, brand engagement and advertising.

    The company employed about 30 people when Dentsu acquired it.

    Dentsu and Dentsu-Aegis

    Dentsu dominates Japan’s advertising space, and is a very very strong force in Japan’s media industry sector, through control and management of major advertising channels with an overwhelming market share in Japan, and has been working hard to leverage its creative power and strength in Japan into a larger global footprint.

    A big step forward towards a larger global footprint for Dentsu was the acquisition of the London based Aegis Group, announced on July 5, 2012.

    Report on Japan’s media landscape (150 pages, pdf file):

    Copyright 2009-2015 Eurotechnology Japan KK All Rights Reserved

  • Kinecto, Romania’s leading digital advertising agency acquired by Dentsu

    Kinecto, Romania’s leading digital advertising agency acquired by Dentsu

    by Gerhard Fasol

    Renamed Kinecto Isobar

    On May 14, 2013 Dentsu announced the acquisition of the Romanian digital advertising agency Kinecto via its subsidiary Dentsu-Aegis, based in London. Following the acquisition, the company was renamed Kinecto Isobar.

    Kinecto

    Kinecto International SRL is one of the most important digital advertising agencies in Romania, and was founded in 2002 by Dr Radu Ionesco and has about 10 employees.

    The company focuses on online and social media campaigns, CRM programs, creative and production services for websites and micro websites, email marketing and search engine marketing

    Before acquisition by Dentsu-Aegis, the company was part of the Tempo Creative Group.

    Dentsu and Dentsu-Aegis

    Dentsu dominates Japan’s advertising space, and is a very very strong force in Japan’s media industry sector, through control and management of major advertising channels with an overwhelming market share in Japan, and has been working hard to leverage its creative power and strength in Japan into a larger global footprint.

    A big step forward towards a larger global footprint for Dentsu was the acquisition of the London based Aegis Group, announced on July 5, 2012.

    Report on Japan’s media landscape (150 pages, pdf file):

    Copyright 2009-2015 Eurotechnology Japan KK All Rights Reserved