ProtoPROTO CORPORATION


News ReleaseNews Release

November 14, 2012
Notice on Acquisition of Shares (Subsidiary Acquisition) of AUTOWAY Co., Ltd.

At the Board of Directors meeting held on November 14, 2012, PROTO CORPORATION (the Company) made the decision to acquire shares in AUTOWAY Co., Ltd. (hereinafter referred to as AUTOWAY) and make it a subsidiary company. The details are as below.


1. Reason for Acquisition of Shares

The Company provides a variety of information services in order to benefit consumers, centered on Goo-net, the car portal site with the largest number of registered used cars in Japan. The Company’s core product Goo finished covering all areas in Japan in the previous fiscal year, and its operating base is currently being strengthened.
 With this overwhelming position in the marketplace, the Company is working towards expanding its business areas in order to grow its automobile-related information business.
 As part of this plan, the Company made AUTOWAY, which imports and sells tires for automobiles, a consolidated subsidiary company. AUTOWAY imports large volumes of high-quality tires from Taiwan, Republic of Indonesia, Republic of Korea and other locations and then sells them over the Internet, which has led to a steady increase in sales performance.
 By acquiring AUTOWAY as a subsidiary, the Company can take advantage of its strength in collecting customers using the Internet and thus gain more contact points with users, while simultaneously using the Company’s media such as car portal site Goo-net to send users to AUTOWAY’s tire and wheel commercial site AUTOWAY LOOP, helping to further increase the scale of AUTOWAY’s business.


2.Transfer Method

The company will buy AUTOWAY shares from the existing shareholders.


3.Overview of Acquired Subsidiary
(1)   Company name AUTOWAY Co., Ltd.
(2)   Head office location 3787-62, Matsuura Kanda, Kanda-Machi, Miyako-Gun, Fukuoka 800-0365, Japan
(3)   Name and title of representative Takashi Okamoto, President
(4)   Business areas Sales of imported tires and wheels
(5)   Amount of capital 69 million yen
(6)   Date of establishment September 27, 1969
(7)   Major shareholders and
      shareholding ratio
MITSUYA Co., Ltd.
Common shares: 100%, A Class Shares: 100%
(8)   Relationship between the Company
      and AUTOWAY
Capital Ties Not applicable
Personal
Relationships
Not applicable
Trade
Relationships
AUTOWAY is running advertisements in the Company’s car parts magazine GooParts and on the new and used car parts shopping site GooParts.
Relevance to Concerned Parties Not applicable
(9)   Business performance and financial situation of AUTOWAY over the last three years (Millions of yen)
  Year ended December 31, 2010 Year ended March
31, 2011
Year ended March
31, 2012
Net assets 1,630 1,713 1,290
Total assets 6,099 5,941 6,925
Net assets per share (yen) 3,020,114.52 3,172,782.73 2,389,633.53
Sales 3,602 2,419 11,244
Operating income 447 271 1,307
Ordinary income 417 223 960
Net income 247 136 95
Net income per share (yen) 458,723.86 252,669.21 177,702.65
Dividends per share (yen) 120,000.00 100,000.00 960,851.85

Note: With the change to the end date for business years, fiscal year ended December 2010 has 4 month accounts and fiscal year ended March 2011 has 3 month accounts.

4.Overview of Stock Acquisition Partner
(1)   Company name MITSUYA Co., Ltd.
(2)   Head office location 3787-63, Matsuura Kanda, Kanda-Machi, Miyako-Gun, Fukuoka 800-0365, Japan
(3)   Name and title of representative Seiji Okamoto, President
(4)   Business areas Tire and wheel sales and mounting service
(5)   Amount of capital 30 million yen
(6)   Date of establishment February 28, 1995
(7)   Net asset 883million yen
(8)   Total asset 1,267 million yen
(9)   Major shareholders and shareholding
      ratio
Takashi Okamoto: 45.10%
Tsuyoshi Okamoto: 38.68%
(10)   Relationship between the Company
       and MITSUYA Co., Ltd.
Capital Ties Not applicable
Personal Relationships Not applicable
Trade Relationships Not applicable
Relevance to Concerned Parties Not applicable
5.Number of shares acquired, value of acquisition, and status of stock ownership before and after acquisition
(1)Number of shares held before transfer 0 shares
(Number of voting rights: 0)
(Ownership percentage: 0%)
(2)Number of shares acquired 540 shares (Common shares: 520 shares, A class shares: 20 shares)
(Number of voting rights: 540)
(Acquisition value: 4,396 million yen)
(3)Number of shares held after transfer 540 shares (Common shares: 520 shares, A class shares: 20 shares)
(Number of voting rights: 540)
(Ownership percentage: 100.0%)
(4)Basis for calculating acquisition value
The above acquisition value was calculated taking into consideration business synergy with the PROTO Group based on an appraised value calculated by an independent third party in order to ensure fairness and validity.
6.Time Schedule
Corporate resolution: November 14, 2012
Contract signed for purchasing shares: November 15, 2012 (scheduled)
Transfer date: April 1, 2013 (scheduled)
7.Financial Outlook
The influence of this transaction on the consolidated business results for the fiscal year ending March 2013 is expected to be insignificant.


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