ProtoPROTO CORPORATION


News ReleaseNews Release

July 14, 2014
Notice on Acquisition of Shares (Subsidiary Acquisition) of TIRE WORLD KAN BEST CO., LTD.

 At the Board of Directors Meeting held on July 14, 2014, PROTO CORPORATION (the Company) made the decision to acquire shares in TIRE WORLD KAN BEST CO., LTD. (hereinafter referred to as TIRE WORLD KAN BEST) 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. In addition to further enhancing products and services such as Goo-inspection, the Company is working towards expanding its business areas in order to grow its Automobile-related Information Business, which is the Company's primary business.
 As part of this plan, the Company made the decision to purchase shares of TIRE WORLD KAN BEST from YAMAUCHI CO., LTD. (hereinafter referred to as YAMAUCHI) and make it into a subsidiary. YAMAUCHI and its subsidiaries, TIRE WORLD KAN BEST and YS CORPORATION CO., LTD.(hereinafter referred to as YS CORPORATION), mainly sell automobile tires at stores in Tohoku region, and have the strength in stocking of tires made in Japan. The Company plans to not only provide services to consumers, but also to increase sales of tires to clients such as used car dealers and car maintenance shops. Additionally, through synergy with the Company's media including car portal site "Goo-net", the business of TIRE WORLD KAN BEST will be expanded.
 By October 1, 2014, the Company plans to merge TIRE WORLD KAN BEST with YS CORPORATION, with TIRE WORLD KAN BEST as the surviving company.
 As for the assets related tire sales held by YAMAUCHI, they will be transferred to TIRE WORLD KAN BEST before the Company acquires its shares.
2.Transfer Method
 The Company will purchase shares of TIRE WORLD KAN BEST from YAMAUCHI, which will hold all shares of TIRE WORLD KAN BEST as of April 1, 2015.
3.Overview of Acquired Subsidiary
 An absorption-type merger of TIRE WORLD KAN BEST with YS CORPORATION, with TIRE WORLD KAN BEST as the surviving company, is planned by October 1, 2014. The information below is an overview of TIRE WORLD KAN BEST before the merger.
(1) Company name TIRE WORLD KAN BEST CO., LTD.
(2) Head office location 2-6-5, Nigatake, Miyagino-ku, Sendai, Miyagi 983-0036, Japan
(3) Name and title of
   representative
Kazuo Ojima, Representative Director
(4) Business areas Sales and online sales of automobile tires, etc.
(5) Amount of capital 30 million yen
(6) Date of establishment July 18, 1996
(7) Major shareholders and
   shareholding ratio
YAMAUCHI CO., LTD. 95.0%
Kazuo Ojima 3.0%
Shigeru Onuma 2.0%
(8) Relationship between the
   Company and TIRE
   WORLD KAN BEST
Capital Ties Not applicable
Personal Relationships Not applicable
Trade Relationships Not applicable
Relevance to Concerned Parties Not applicable
(9) Business performance and financial situation of TIRE WORLD KAN BEST and YS CORPORATION over the last three years
   With a merger planned with TIRE WORLD KAN BEST as the surviving company and YS CORPORATION as the absorbed company, the operating results and financial states of both companies are given below.
                                                              (Millions of yen)
TIRE WORLD KAN BEST
  Year ended June 30,
2011
Year ended June 30,
2012
Year ended June 30,
2013
Net assets 36 36 36
Total assets 114 128 124
Net assets per share (yen) 60,352.92 60,422.00 61,510.07
Sales 304 357 321
Operating income 1 0 1
Ordinary income 0 0 1
Net income 0 0 0
Net income per share (yen) 245.20 69.07 1,088.06
Dividends per share (yen)
YS CORPORATION
  Year ended March 31,
2012
Year ended March 31,
2013
Year ended March 31,
2014
Net assets 10 10 38
Total assets 14 15 529
Net assets per share (yen) 1,094.91 1,096.50 1,298.51
Sales 40 17 1,679
Operating income 0 0 14
Ordinary income 0 0 14
Net income 0 0 7
Net income per share (yen) 2.23 1.58 266.34
Dividends per share (yen)
※Of the TIRE WORLD KAN BEST shares held by Kazuo Ojima and Shigeru Onuma will be acquired by YAMAUCHI before the merger with YS CORPORATION.
※As of July 1, 2013, YS CORPORATION’s issued shares increased from 10,000 to 30,000, but Net assets per share and Net income for the period per share are calculated assuming this change occurred on the first day of the fiscal year ending March 31, 2014.
4.Overview of Stock Acquisition Partner
(1) Company name YAMAUCHI CO., LTD.
(2) Head office location 2-6-5, Nigatake, Miyagino-ku, Sendai, Miyagi 983-0036, Japan
(3) Name and title of
   representative
Shigeo Yamauchi, Representative Director
(4) Business areas Acquisition, etc., of automobile tires, etc.
(5) Amount of capital 50million yen
(6) Date of establishment 11 April, 1972
(7) Net assets 708 million yen
(8) Total assets 4,718 million yen
(9) Major shareholders and
   shareholding ratio
Shigeo Yamauchi  66.7%
Shigeru Yamauchi 33.3%
(10) Relationship between the
   Company and YAMAUCHI
Capital Ties Not applicable
Personal Relationships Not applicable
Trade Relationships Not applicable
Relevance to Concerned Parties Not applicable
※Assets related to tire sales held by YAMAUCHI are planned to be transferred to TIRE WORLD KAN BEST before the Company acquires its shares.
※For the fiscal year ending September 30, 2013, YAMAUCHI had sales of 5,219 million yen, operating income of 303 million yen, ordinary income of 309 million yen and net income of 227 million yen.
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 600 shares
(Number of voting rights: 600)
(3) Acquisition value
Common shares of TIRE WORLD KAN BEST 1,899 million yen
Due diligence costs (estimate) 10 million yen
Total (estimate) 1,909 million yen
(4) Number of shares held after
   transfer
600 shares
(Number of voting rights: 600)
(Ownership percentage: 100%)
※Acquisition Cost and Basis for Calculation
In order to ensure the equitability and appropriateness of the acquisition cost, it is calculated based on an appraised value by an independent third party, with consideration giving for business synergy with the Group.
6.Time Schedule
Corporate resolution: July 14, 2014
Contract signed for purchasing shares: July 14, 2014
Transfer date: April 1, 2015 (scheduled)
7.Financial Outlook
 This will have no effect on the consolidated results of the fiscal year ending March 31, 2015, but is expected to contribute to consolidated results for the fiscal year ending March 31, 2016 and on.


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