加賀電子_決算動画_20200525_text有_門_英語版

6/10 Acquisition of EXCEL

Now I would like to explain several points about the current fiscal year (the year ending in March 2021). First, as we announced in December 2019, we acquired shares in EXCEL, a company in our industry, from CITY INDEX ELEVENTH CO., LTD. (CI11) following various developments. And as a result EXCEL became a Group subsidiary in April 2020. ● The decision to make EXCEL a subsidiary was based on four objectives: to expand the electronic parts business, to expand the scale of the EMS business, to acquire new businesses, and to further improve management efficiency. ● EXCEL has excellent products, as well as a customer base, in the area of liquid crystal devices—an area in which we have not been very strong thus far. EXCEL is also in charge of products for Chinese manufacturers such as BOE, and has made inroads among key smartphone manufacturers in China as customers. For these reasons, we think sharing these strengths offers us significant merit. ● EXCEL is also involved in the EMS business but outsources production. By using our EMS infrastructure instead, EXCEL will allow us to generate significant synergies. ● We are not yet sure about the outlook for EXCEL’s earnings in the current fiscal year, but it became a consolidated member of our Group from this fiscal year. The acquisition price was 100 million yen, so we are certain to post 8.2 billion yen in gains on negative goodwill. As a result, we cannot yet determine the full impact of the coronavirus on sales and operating income for the Group’s main business, but we are confident that we will post bottom-line income gains unless conditions become quite serious.