Memorandum of Understanding Regarding the Share Transfer of a Consolidated Subsidiary

Transcription

1 24 MAY 2012 Memorandum of Understanding Regarding the Share Transfer of a Consolidated Subsidiary Seiko Instruments Inc. (SII, President Kunio Kamata, headquartered in Mihama-ku, Chiba City, Chiba), a consolidated subsidiary of Seiko Holdings Corporation(SHD, President Shinji Hattori), hereby announces that it has reached a basic agreement with Hitachi High-Technologies Corporation (Hitachi High-Tech, President Masao Hisada) to transfer all shares of SII s wholly owned subsidiary SII NanoTechnology Inc. (SII NanoTech, President Kenji Kawasaki) to Hitachi High-Tech. On condition of approval by the regulatory authorities, the parties plan to conclude a share transfer agreement with the aim of transferring the stock in the fall of this year. As a consequence of this move, three subsidiaries of SII NanoTech (Epolead Service Inc., SII NanoTechnology USA Inc., and SII NanoTechnology (Shanghai) Inc.) will also be transferred. 1. Reason for the Share Transfer As SHD s electronic components business, SII NanoTech and its subsidiaries have been promoting the development, manufacture, and sale of competitive products in the cutting-edge field of analysis and measurement instruments on the basis of the corporate philosophy of pursuing original technology, using that technology to solve clients problems, and contributing to the development of the company and society. For SHD however, as we aim to achieve more efficient management by promoting selection and concentration, that business have outstanding originality within our group and thus cannot be expected to have a synergetic effect with other businesses in the future. Therefore, it was decided to transfer this business, concentrate our management resources on other businesses, such as watches and electronic components, and thereby aim to strengthen these other businesses and further increase the efficiency of group management. We chose Hitachi High-Tech as the transfer partner, because the company is endeavoring to develop business using its world-class technology and global sales capability and networks. It is promoting the strengthening of management focusing on such fields as life sciences as growth areas.

2 Since the business of Hitachi High-Tech has a close affinity and complementarity with the business of SII NanoTech, and the creation of a synergy can be expected in the manufacture, sale, and service of scientific and medical systems, we believe that through this business transfer it will be possible for SII NanoTech to continuously expand and develop its business in the future. 2.Overview of the Subsidiary to be Transferred (1) Name SII NanoTechnology Inc. 8, Nakase 1-chome, Mihama-ku, Chiba-shi, Chiba , (2) Location Japan (3) Representative Kenji Kawasaki, President & CEO Development, manufacture and sale of analytic, (4) Business lines measurement and observation instruments. (5) Capital 100 (6) Date of establishment Mar. 1, 2000 (Date of corporate separation: Dec. 1, 2003) (7)Principal shareholders Seiko Instruments Inc. 100% Capital SEIKO HOLDINGS CORPORATION 100% (Indirect Ownership) between SHD and SII NanoTech. Similarly, no noteworthy personal exist between individuals associated with SHD Personal associated with the subsidiary to be (8) Relationship between transferred. Seiko Holdings Corporation A director and an auditor at a subsidiary of SHD respectively serve also as a director and an auditor at SII NanoTech. exist between SHD and SII NanoTech. Transactional Similarly, no noteworthy transactional exist between individuals associated with SHD and individuals or affiliated companies associated with the

3 subsidiary to be transferred. Some subsidiaries of SHD get in stock from SII NanoTech. (9) Three-year operating results and financial condition for the subsidiary to be transferred FY2008 FY2009 FY2010 Total net assets 4,164 4,276 4,338 Total assets 22,754 21,485 18,535 Shareholders equity per share 69,407 yen 71,271 yen 72,302 yen Net sales 17,265 15,222 15,576 Operating income -1, Ordinary income -1, Net income -1, Net income per share -26,155 yen 4,126 yen 4,305 yen Cash dividend per share -yen -yen -yen Note: 1. Operating results and financial condition is a sum of SII NanoTech and its 3 subsidiaries since there are no consolidated numerical data months data is applied for the year ended Mar. 31, 2010 for SII NanoTech and Epolead Service Inc., 3. The end of Dec. is the settlement day for SII NanoTechnology USA Inc. and SII NanoTechnology (Shanghai) Inc. 3.Overview of the Subsidiaries of SII NanoTechnology Inc. to be Transferred 1 Epolead Service Inc. (1) Name Epolead Service Inc. (2) Location 8, Nakase 1-chome, Mihama-ku, Chiba-shi, Chiba , Japan (3) Representative Noritoshi Oishi, President (4) Business lines Analyzers/measuring equipment maintenance and consumable supply sales (5) Capital 50 (6) Date of establishment Mar. 28, 1995 (7)Principal shareholders SII NanoTechnology Inc. 100%

4 Capital SEIKO HOLDINGS CORPORATION 100% (Indirect Ownership) between SHD and Epolead Service. Similarly, no noteworthy personal Personal associated with Epolead Service. (8)Relationship between Seiko Holdings Corporation exist between SHD and Epolead Service. Similarly, no noteworthy transactional exist between individuals Transactional associated with SHD and individuals or affiliated companies associated with Epolead Service. Some subsidiaries of SHD and Epolead Service. purchase products and get in stock each other. (9) Three-year operating results and financial condition for the subsidiary to be transferred The contents is included in 2(9)above. 2 SII NanoTechnology USA Inc. (1) Name SII NanoTechnology USA Inc. (2) Location Nordhoff Street, Northridge, CA 91324, U.S.A. (3) Representative Kenji Kawasaki, Chairman (4) Business lines Development, manufacture and sale of X-ray Detector (5) Capital 11 million USD (6) Date of establishment Jun. 17, 2005 (7)Principal shareholders SII NanoTechnology Inc. 100% (8) Relationship between Seiko Holdings Corporation Capital SEIKO HOLDINGS CORPORATION 100% (Indirect Ownership)

5 between SHD and SII NanoTechnology USA. Similarly, no noteworthy personal Personal associated with SII NanoTechnology USA. exist between SHD and SII NanoTechnology USA. Similarly, no noteworthy transactional exist between Transactional individuals associated with SHD and individuals or affiliated companies associated with SII NanoTechnology USA. Some subsidiaries of SHD and SII NanoTechnology USA. purchase products and get in stock each other. (9) Three-year operating results and financial condition for the subsidiary to be transferred The contents is included in 2(9)above. 3 SII NanoTechnology (Shanghai) Inc. (1) Name SII NanoTechnology (Shanghai) Inc. (2) Location Rm.102, No.2, 690 Bibo Rd., Zhangjiang Hi-Tech Park, Shanghai, China (3) Representative Kenji Kawasaki, President (4) Business lines Measurement and analysis instruments manufacture, sale and after care service (5) Capital 455 thousand USD (6) Date of establishment Sep. 21, 2004 (7)Principal shareholders SII NanoTechnology Inc. 100% (8) Relationship between Capital SEIKO HOLDINGS CORPORATION 100% Seiko Holdings Corporation (Indirect Ownership)

6 between SHD and SII NanoTechnology (Shanghai). Similarly, no noteworthy Personal personal exist between individuals or affiliated companies associated with SHD and individuals or affiliated companies associated with SII NanoTechnology (Shanghai). exist between SHD and SII NanoTechnology (Shanghai). Similarly, no noteworthy transactional exist between individuals associated with SHD and Transactional individuals or affiliated companies associated with SII NanoTechnology (Shanghai). Some subsidiaries of SHD and SII NanoTechnology(Shanghai). purchase products and get in stock each other. (9) Three-year operating results and financial condition for the subsidiary to be transferred The contents is included in 2(9)above. 4. Overview of the Share Transfer Counterparty (1) Name Hitachi High-Technologies Corporation (2) Location 24-14, Nishi-Shimbashi 1-chome, Minato-ku, Tokyo , Japan Masao Hisada, (3) Representative President, CEO and Director (4) Business lines Manufacture, sale and service of semiconductor manufacturing equipment, chip mounters, FPD HD manufacturing equipment, analytical instruments, electron microscopes and clinical analyzers. Sale of industrial & IT Systems, industrial materials and electronic devices/materials.

7 (5) Capital 7,938 (6)Date of establishment April 12, 1947 (7) Total net assets 253,012 (FY 2011, consolidated) (8) Total assets 442,162 (FY 2011, consolidated) (9)Principal shareholders Hitachi, Ltd % (March 31, 2012) No noteworthy capital exist between SHD and Hitachi High-Tech. Similarly, no noteworthy capital Capital associated with Hitachi High-Tech. between SHD and Hitachi High-Tech. Similarly, no noteworthy personal Personal (10) Relationship between Seiko Holdings Corporation associated with Hitachi High-Tech. exist between SHD and Hitachi High-Tech. Similarly, no noteworthy transactional Transactional associated with Hitachi High-Tech. Hitachi High-Tech is not party to the Status of interests of SHD. Neither is SHD party to related parties the interests of Hitachi High-Tech, its affiliated companies and associates.

8 5. Number of Shares for Transfer, Transfer Price and Status of Shareholding Before and After Transfer (1) Shareholding prior to transfer 60,000 shares (No. of voting rights: 60,000) (Ownership: 100.0%) (2) Number of Shares for Transfer 60,000 shares (No. of voting rights: 60,000) (Percentage of issued shares: 100.0%) (Transfer price: TBD) (3) Shareholding after transfer 0 shares (No. of voting rights: 0) (Ownership: 0.0%) 6. Schedule (1) Conclusion of the basic agreement May 24, 2012 (2) Conclusion of the share transfer agreement (tentative) Jul. 25, 2012 (3) Date of share transfer (tentative) Oct. 1, Future Outlook Hereafter, we will confer regarding a condition of the share transfer agreement based on the basic agreement. The details of the share transfer agreement will be determined by a future consultation. There is, however, still containing unconfirmed parts. Hence, we will promptly report regarding the substance of the share transfer agreement as soon as the details are determined. Furthermore, we will also inform you in the case judged to require adjustment of consolidated business forecast by this matter.

9 (Reference) Consolidated business forecast for FY2012 and Consolidated Financial Results for FY2011 Net Sales Operating Ordinary Net Income Net income Income Income per share FY ,000 11,000 6,000 5,000 Yen FY ,937 6,733 1,280-11,014 Yen