Notification Regarding the Reorganization of Direct Sales Business for Optical Equipment and Electronic Components

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At Today’s meeting of the Ricoh Board of Directors, the decision was made to spin off our direct sales business for optical equipment and electronic components. A detailed explanation of the reasons behind this move is as follows.
With the spinoff, the business for optical equipment and electronic components, which is being developed by Ricoh Company, Ltd., Ricoh Optical Industries Co., Ltd., and Ricoh Microelectronics Co., Ltd., will be transferred to a new wholly owned subsidiary to be established by October 2014.
Because this is a company split by which Ricoh’s wholly owned subsidiary takes over a business unit, certain matters and content have been omitted from this disclosure.

I. Objective of the Reorganization

In line with its 18th Mid-Term Management Plan for the three years started in April 2014, Ricoh will pursue group synergy by combining its comprehensive strengths to reinforce the industrial products business as a new business pillar to succeed the imaging & solutions business.
As part of this initiative, the spinoff of the direct sales business for optical equipment and electronic components, which has an environment and model different from Ricoh’s core imaging & solutions business, will be implemented with the aim of establishing a system that enables us to promptly respond to customers’ needs and changing markets, thereby expanding and reinforcing our business in automotive, factory automation, and other growth markets.

II. Summary of the Reorganization

1. Summary of the Absorption-Type Split

1) Timetable for the Company Split
    July 17, 2014               Meeting of the Board of Directors for Approval of the Company Split Agreement
    August 22, 2014         Execution of the Company Split Agreement (tentative)
    October 1, 2014          Scheduled date of the Company Split (effective date of the Company Split)
Note: Since the company split satisfies the conditions described under Article 784, paragraph 3 of the Company Act, obtaining approval at the Company’s general meeting of shareholders concerning the split agreement of the Company is not required.

2) Method of the Company Split
    a) Method of the Company Split
    This is an absorption-type split in which Ricoh will be the Splitting Company and RICOH INDUSTRIAL SOLUTIONS INC. will be the Successor Company.
    b) Reasons for Adopting the Absorption-Type Split
    The absorption-type split is adopted from the perspective of reorganization speed within the group targeted at wholly owned subsidiaries of Ricoh Company, Ltd., and convenience of legal procedures.

3) Share Allocation
    This is an absorption-type split with no allocation of shares or other property to the Successor Company.

4) Subscription Rights and Bonds with Subscription Rights
    Ricoh has not issued subscription rights and bonds with subscription rights.

5) Decrease in Capital Due to the Company Split
    There will be no change in Ricoh’s capital as a result of the split.

6) Rights and Obligations to be Transferred to the Successor Company
    All assets, liabilities, status of agreement, and other rights and obligations of the Company related to the business to be split (business stipulated in (II) 3 (1)) shall be transferred to the Successor Company, RICOH INDUSTRIAL SOLUTIONS INC. as of the effective date of this company split.

7) Expected Performance of Obligation
    Since sufficient net assets are expected to be secured after the effective date of the company split, there are no concerns regarding the fulfillment of obligations by the Company and RICOH INDUSTRIAL SOLUTIONS INC.

2. Overview of the Parties of the Company Split

1) Corporate Name RICOH COMPANY, LTD.
(Splitting Company)
(as of March 31, 2014)
RICOH INDUSTRIAL SOLUTIONS INC.
(Successor Company)
(established June 4, 2014)
2) Business Development, manufacturing, sales and service of OA equipment, optical equipment, and other devices Development, designing, manufacturing, sales and service of optical precision equipment, manufacturing inspection equipment, materials, parts, software and systems
3) Date of Establishment February 6, 1936 June 4, 2014
4) Headquarters 1-3-6 Nakamagome, Ota-ku, Tokyo 3-2-3 Shin-Yokohama, Kohoku-ku, Yokohama, Kanagawa
5) Representative Zenji Miura, President and C.E.O. Katsunori Nakata, President and C.E.O.
6) Capital 135,364 million yen 350 million yen
7) Total Shares Issued 744,912,078 7,000
8) Accounting Date March 31 March 31
9) Major Shareholders and Percentage of Shares Held The Master Trust Bank of Japan (trust account)                                                         9.95% Ricoh Company, Ltd.             100.00%
Japan Trustee Services Bank, Ltd. (trust account)                                                         7.05%
Nippon Life Insurance Company              4.56%
Bank of Tokyo-Mitsubishi UFJ                   2.97%
Nipponkoa Insurance Co.,Ltd                    2.51%

 

10) Financial position and results of operation of splitting company in the immediately preceding fiscal year (on a consolidated basis)

Fiscal Year Ending March 31, 2014
Total Equity 1,083,337million yen (consolidated)
Total Assets 2,556,960 million yen (consolidated)
Shareholders’ Equity Per Share 1,404.17 yen
Net Sales 2,236,913 million yen (consolidated)
Operating Income 120,390 million yen (consolidated)
Net Income Attributable to Ricoh Company, Ltd. 72,828 million yen (consolidated)
Net Income Per Share Attributable to Ricoh Company, Ltd. 100.46 yen

 

3. Overview of the Business Unit to be Split

1) Details of the Business Unit to be Split
    Development, designing, manufacturing, sales and service of optical precision equipment, manufacturing inspection equipment, materials, parts, software and systems

2) Operating Results of the Business Unit to be Split (ending March 31, 2014)

  Results of the Businesses to be Split
Net Sales (million yen) 14,013

 

3) Breakdown Showing the Assets and Liabilities to be Transferred, as well as the Amounts (as of March 31, 2014)

Assets Liabilities
Item Book Value Item Book Value
Current Assets (million yen) 4,878 Current Liabilities (million yen) 316
Fixed Assets (million yen) 648 Fixed Liabilities (million yen) 290
Total (million yen) 5,526 Total (million yen) 606

Note: The amounts of assets and liabilities to be transferred will be finalized after making adjustments of the increase or decrease to the amount stated above by the effective date of the company split.

4) Status of the Company Following the Split
    There will be no change in the title, business operation, headquarters location, representatives, common stock or accounting period as a result of the company split.

5) Impact on Business Results
    The company split will have no impact on the consolidated business performance. The impact of the company split on the non-consolidated business performance is expected to be negligible.

Related Subject   Corporate

 

| About Ricoh |

Ricoh is a global technology company specializing in office imaging equipment, production print solutions, document management systems and IT services. Headquartered in Tokyo, Ricoh Group operates in about 200 countries and regions. In the financial year ending March 2014, Ricoh Group had worldwide sales of 2,236 billion yen (approx. 21.7 billion USD).

The majority of the company's revenue comes from products, solutions and services that improve the interaction between people and information. Ricoh also produces award-winning digital cameras and specialized industrial products. It is known for the quality of its technology, the exceptional standard of its customer service and sustainability initiatives.

Under its corporate tagline, imagine. change. Ricoh helps companies transform the way they work and harness the collective imagination of their employees.

For further information, please visit www.ricoh.com/about/

Information in the news releases is true and accurate at the time of publication.

Manufacture, sales, price and specifications of products may be subject to change.

News Source : Notification Regarding the Reorganization of Direct Sales Business for Optical Equipment and Electronic Components
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