For Institutional Investors/Analysts

Acquisition of Shares in EXCEL CO., LTD.
(and Making It a Subsidiary)

December 2019

KAGA ELECTRONICS CO., LTD.
President & COO
Ryoichi Kado

Overview of the Acquisition

Scheme&Schedule

Acquisition
Price(estimate)
Financing
Financial
ImpactDecember 9, 2019・ Conclude the integrated contract with EXCEL, CI11,
and the parent company of CI11, Office Support
・ Conclude EXCEL share transfer agreement with CI11

February 14, 2020

・ EXCEL will hold a shareholders’ meeting.

March 30, 2020

・ EXCEL will be delisted.

April 1, 2020

・ EXCEL will become a wholly owned subsidiary of CI11.
・ EXCEL will pay a dividend in kind to CI11 using aportion of its assets.
・ EXCEL will become a wholly owned subsidiary.

・ Share of common stock in EXCEL: 100 million yen

・ Advisory and other fees

: 250 million yen

Total: 350 million yen

・ Share Acquisition: Plan to finance with self-funding
・ Working Capital : Plan to provide financing to EXCEL around8 billion yen
・ Approximately 8.2 billion yen of gain on bargain purchase is anticipatedin the fiscal year ending March 31, 2021.

© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

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Purpose of This Acquisition

Market share
expansion for thetrading business

Complement bothcompanies’ offerings andsales channels

Expansion in thescale of the EMS
business

Share KAGA’s global
network of EMS
manufacturing baseswith EXCEL

Acquisition ofnew businesses

Mobilize the collective
strength of the Group toachieve earlycommercialization

Further
improvement in
profitability

Promote businesscollaboration between
the two companies© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

• Utilize EXCEL’s domestic and overseas key productsin the LCD domain to expand sales to KAGA’scustomers• Strengthen distribution of KAGA’s products to EXCEL’s
customer base in China• Reach out to EXCEL’s customer base using KAGA’s
EMS business• Replace EXCEL’s outsourcing partners with KAGA’s
own manufacturing base

• Bring in EXCEL’s promising new businesses, such as
the EV-related business• Optimize sales-related organizations• Share administrative functions of both companies

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Outline of EXCEL
CompanyName

Representative

・ EXCEL CO., LTD.

・ President and CEO: Nobuaki Ohtaki

Locations・ Headquarters: 3-12-10 Nishi-Shinbashi, Minato-ku,Tokyo, JapanHistory

・ 1961: Established as OK Shokai Co., Ltd.
・ 1992: Company name changed to EXCEL CO., LTD.
・ 2002: Listed on the 2nd Section of the Tokyo Stock Exchange (TSE)・ 2004: Transferred company listing to the 1st Section of the TSE

BusinessActivities

・ Sale, import and export of LCD devices, integrated circuits, semiconductor
devices and other electronic components and equipment© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

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*From EXCEL’s
disclosure materials

Plan to make EXCEL a subsidiary
EXCEL pays dividend inkind to CI11CI11CI11

STEP-1

STEP-2
Separate EXCEL assets
into Business assets andNon-Transferable Assets

EXCEL© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

STEP-3

CI11 makes EXCEL awholly owned subsidiary

Transfer NonTransferable Assets

CI11 acquires sharesin EXCELKAGA acquires sharesin EXCEL

CI11

KAGA
ELECTRONICS

STEP-4

Transfer Shares
STEP-5KAGA makes EXCEL awholly owned subsidiary

EXCEL

EXCEL

Business Assets

Business Assets

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Recent Performance and Future Outlook of EXCEL
2018/3(million yen) Results

Net Sales

2019/3Results

2020/3
Forecast

2021/3Outlook

2022/3
Outlook*From EXCEL’s
disclosure materials

2023/3
Outlook2024/3
Outlook

100,425

67,49957,000107,622

125,563130,285

131,858

Operating Income

1,433

369-500

151

2,391

2,617

2,748

Profit Attributableto Owners of Parent

2,874

569
(billion yen)

Operating Income

Net Sales
140
120
100
80

4
3260
40
20

100-15

Medium- to Long-Term Vision of the Kaga Electronics GroupThrough the establishment and taking hold of “profit-focusedmanagement”, we aim toform Japan’s No.1 corporate groupin the industry,
and furthermore,

to become a competitive “world-class”
company.
© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

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Positioning of “Medium-Term Management Plan 2021”
Organic
GrowthAim to become a competitive “world-class”+company
Further M&A
Challenges
Toward the realization of
becoming “Japan’s No. 1
corporate group in the industry”
Kaga
ElectronicGroup+
FujitsuElectronics
Acquisitionof EXCEL

Increased
Sales

JPY500 billion

Expansion of
trading company business

Increased
ProfitRatio

JPY1 trillion

Furtherexpansion ofthe EMS
business
Enhancement
and expansion ofoverseas
businesswill lead togrowth of the EMS businessQuantitative
expansion of trading
company business

Qualitative improvement
through EMS businessMedium Term Management Plan 2021

①Enhancement of Revenue Base ②Stabilization ofManagement Base ③Creation of New Business© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

(Net Sales)

Medium- to
Long-Term
Vision7

“Medium-Term Management Plan 2021” Management Targets

FY2018Results

FY2019Forecast

Net Sales¥292.8 billion

OperatingIncome¥442 billion¥500 billion○¥7.6 billion¥9 billion¥13 billion○

10.9%

6.4%

8% or higher○

○○

ROE

FOREX

ManagementTargets FY2021○○○○○○・ Plan forecast： US$1.00＝￥110© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

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Industry Positioning
Reaching industry’s second position in FY ending March 2020 due to full year
consolidation of Fujitsu Electronics, andrealizing “500 billion yen corporation” with EXCEL acquisition(billion yen)March 2019 result base

March 2020 forecast base

Rank

Company name

Net sales

Rank

Company name

Net sales

1

MACNICA FUJI ELECTRONICS

524.2

1

MACNICA FUJI ELECTRONICS

540.0

2

MARUBUN CORPORATION

326.7

2

KAGA ELECTRONICS

430.0

3

KAGA ELECTRONICS

292.8

3

Restar Holdings

410.0

4

RYOSAN249.74MARUBUN CORPORATION

291.55SIIX Corporation

242.85SIIX Corporation

244.0

6RYODEN CORPORATION

240.3

6RYOSAN235.07TOMEN DEVICES CORPORATION

217.67RYODEN CORPORATION

233.6

8UKC Holdings

205.88TOMEN DEVICES CORPORATION

210.0

9Elematec Corporation

183.4

9Elematec Corporation

201.0

10

TACHIBANA ELETECH

182.9

10

TACHIBANA ELETECH

183.0

Note: SIIX figures for FY ended December 2018 and FY ending December 2018
Restar Holdings was established in April 2019 through the management integration of UKC and VITEK※Data Source: Internal study© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

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＜Notes＞

10

＜Notes＞

11

＜Notes＞

12

＜Notes＞

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“Everything we do isfor our customers”

20 Kandamatsunagacho, Chiyoda-ku, Tokyo 101-8629
Contact: Investor Relations & Public Relations Office
TEL:+81-3-5657-0106
FAX:+81-3-3254-7133
E-mail: webmaster@taxan.co.jp
https://www.taxan.co.jp© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

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■ Forward-looking statements in these materials are based on information available to management
at the time this report was prepared and on assumptions that management believes arereasonable.
Actual results may differ significantly from these statements for a number of reasons.
■ Display method in this material
Numerical values: Rounded to the nearest unit
Ratio: After calculation in yen units, first digit of display unit is rounded off
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