November 17, 2014
Company Name:

GMO Internet, Inc.
(TSE First Section, Code: 9449)

Address:

26-1 Sakuragaoka-cho Shibuya-ku Tokyo JAPAN

Representative:

Masatoshi Kumagai, CEO and Representative Director

Contact:

Masashi Yasuda, Managing Director

Telephone:+81 3 5456 2555

URL:

http://www.gmo.jp/en

Consolidated Subsidiary (GMO AD Partners, Inc.) to Establish New Subsidiary inCorporate Split (Simple Split)
GMO Internet, Inc. consolidated subsidiary, GMO AD Partners, Inc. (JASDAQ Standard: 4784) today
convened a Board of Directors meeting at which the following was resolved: (1) To convert to a holding
company structure as of January 1, 2015; (2) To spin out the company’s Internet advertising business in anabsorption-type split into new wholly-owned subsidiary (indirect subsidiary of GMO Internet) GMO AD
Marketing, Inc. in order to become a holding company; (3) Establish a new subsidiary.
Please note that some details have been omitted from this disclosure statement as the advertising business tobe split off will be entirely succeeded to a wholly-owned subsidiary of the company.

1．Objective of Converting to a Holding Company StructureThe market environment in which the Internet advertising business of the GMO Ad Partners Group operates is
rapidly evolving and competition is intensifying. GMO AD Partners has continued to strengthen its businesswith initiatives including expansion through an active M&A strategy, and a structural reorganization aimed at
improving business efficiency and financial condition throughout each of the companies in the consolidated
group.
Converting to a holding company structure will enable better distribution of decision-making power, greater
autonomy, and stronger, more agile management.
Further, the holding company structure is expected to be an effective structure for executing strategic capitaland business partnerships.

1i)Enhancing Group Management

Through the establishment of a holdings company the group aims to improve corporate value by enhancing
group management strategy and planning, optimizing distribution of management functions, enhancing
communication and information sharing between group companies by consolidating these functions under theholding company, and encouraging and supporting autonomous growth throughout the group.

ii)

Business Growth as a product of Autonomous Management

Delegating responsibility to each company for their respective businesses enables faster decision-making andswifter response to changes in the market environment. Our objective is to optimize group revenue by allowing
each company to focus on pursuing growth opportunities with the support of the holdings company.

2．Overview of Conversion to Holding Company Structure(1) Schedule
Board of Directors resolution(Decision to convert to holdings company structure, approval ofNovember 17, 2014absorption-type split agreement, decision to establish subsidiary.)
November 25, 2014
Subsidiary established (successor company in absorption-type split)(tentative)November 26, 2014
Execution of absorption-type split agreement(tentative)
Effective date of absorption-type split

January 1, 2015 (tentative)(2) Method of conversion
GMO AD Partners will execute a corporate split in which the company’s advertising business will be split off
and absorbed into newly established wholly-owned subsidiary GMO AD Marketing (the successor company).
The company will remain a listed company after execution of the corporate split.

(3) Details of allocation in relation to the absorption-type split
Not applicable(4) New Equity Warrants or Equity Warrants with Bonds issued in relation to the absorption-type split
Not applicable2(5) Increase or reduction in capital as a result of the absorption-type split
Not applicable(6) Rights and obligations of the successor company
The rights and obligation to be transferred to GMO AD Marketing from GMO AD Partners include all rights andobligations associated with the Internet advertising business (with the exception of those stipulated in theabsorption-type split agreement).
All rights and obligation associated with employment contracts of staff engaged in the Internet advertisingbusiness will be succeeded to GMO AD Marketing (with the exception of those stipulated in theabsorption-type split agreement).
GMO AD Partners debt obligations will be transferred to GMO AD Marketing in a concomitant assumption.

(7) Assumption of debt obligations
After the corporate split, assets are expected to exceed liabilities in both GMO AD Partners and the successor
company. Further, in regard to revenue after the corporate split, debt allocated to GMO AD Partners and thesuccessor company is currently not expected to cause problems for either company.

(8) Outline of Companies in Transaction
Split Company

Successor Company(1)CompanyName

GMO AD Partners, Inc.

GMO AD Marketing, Inc.

(2)

Address

26-1 Sakuragaokacho, Shibuya, Japan

26-1 Sakuragaokacho, Shibuya, Japan

(3)

CEO

Shintaro Takahashi

Shintaro Takahashi

Business
Description

Online advertising and media content

(4)
(5)

CapitalJPY 1,301,568,500

JPY 50,000,000

(6)

Date
Established
Outstanding
Shares

September 8, 1999

November 25, 2014 (tentative)

16,757,200 shares

1,000 shares

December

December(7)(8)

Fiscal Year

(9)

Major
ShareholdersandOwnershipRatio

Online advertisingdevelopment

GMO AD Holdings, Inc. 45.54%
NetIRD Inc. 15.91%

GMO AD Partners, Inc. 100%

GMO Internet, Inc. 9.29%

3

(10)

Related Party
Relationships
CapitalRelationship

GMO AD Marketing to be established as wholly-owned subsidiary of GMO AD
Partners.
Boards of directors and auditors to be appointed from GMO AD Partners to thesuccessor company. All rights and obligation associated with employment contracts

Executive
Relationshipof staff engaged in the Internet advertising business will be succeeded to GMO AD
Marketing (with the exception of those stipulated in the absorption-type splitagreement).

Transactional
Relationship(11)

None (GMO AD Marketing is not yet operating)Operating Results and Financial Condition in the 3 Most Recent Fiscal Term
GMO AD Partners, Inc. (consolidated)

GMO AD Marketing, Inc.

FYE12/2011

FYE12/2012

FYE12/2013

FYE12/2011

FYE12/2012

FYE12/2013

Net Assets

3,853

4,162

4,664－－－

Total Assets

6,088

6,727

8,449－－－Net Assets per
Share (JPY)

260.08279.33285.29－－－Net Sales

12,25315,36818,923－－－OperatingProfit335546659－－－Ordinary Profit

430764653－－－Net Profit

238357180－－－

3,219.21

24.47

12.28

－

－－

1,150

8.6

4.3

－

－－

Fiscal Term

Net Profit perShare (JPY)Dividend perShare (JPY)(Unit: JPY millions, except where otherwise stated)*GMO AD Partners executed a stock split on December 1, 2011 at a ratio of 1:200 (common shares). Net
Assets and Net Profit per Share for the FYE12/2011 term are calculated as if the stock split was executed at
the beginning of the term.

(9) Outline of the Business to be Split Offi) Description of BusinessOnline advertisingii) Operating Results (FYE12/2013)
Net Sales

JPY 6,052,2724iii) Assets and Liabilities Split
Net Assets
Item

Liabilities
Book Value

Item

Book Value

Current Assets

JPY 1,072,588,000

Current Liabilities

JPY 1,105,699,000

Fixed Assets

JPY 49,561,000

Fixed Liabilities

JPY 16,450,000

Total

JPY 1,122,149,000

Total

JPY 1,122,149,000*Based on Balance Sheet condition as of September 30, 2014. Actual assets and liabilities may vary slightly on
the effective date of the transaction.

3．Status after the Stock SwapSplit Company（1）Company NameSuccessor Company

GMO AD Partners, Inc.

GMO AD Marketing, Inc.

26-1 Sakuragaokacho, Shibuya,

26-1 Sakuragaokacho, Shibuya,

Japan

Japan

CEOShintaro Takahashi

Shintaro Takahashi

Business

Online advertising and media

Description

content development(5)

CapitalJPY 1,301,568,500

JPY 50,000,000(6)

Fiscal Term

December

December(2)
Address(3)(4)

Online advertising

4．Outlook
As this is a transaction between a consolidated subsidiary and its wholly-owned subsidiary, impact on
consolidated results is expected to be immaterial.

(Reference) Consolidated Results Forecast (published February 6, 2014)
Consolidated

Consolidated

Consolidated

Consolidated

Net Sales

Operating Profit

Ordinary Profit

Net Profit

JPY 105,000 million

JPY 12,500 million

JPY 12,500 million

JPY 5,500 million

JPY 93,704 million

JPY 11,000 million

JPY 10,941 million

JPY 5,244 million

Current Forecast(FYE12/2014)
Previous Term Results(FYE12/2013)5