Tokyo, Japan – (The Hosting News) – April 2, 2007 – The hi-ho, Inc. (“hi-ho”) from Panasonic Network Services Inc. (“PNS”) will become a consolidated subsidiary of Internet Initiative Japan Inc. (“IIJ”) as one of Japan’s Internet access and comprehensive network solutions providers, to acquire 100% of the equity of hi-ho, Inc.
IIJ Group will take over the Internet service business that PNS provides under the “hi-ho” brand and the solution business that PNS provides to its corporate customers, including Matsushita Electric Industrial Co., Ltd. group companies through the share acquisition. While the Internet is becoming more widely used and lower priced broadband services, such as ADSL and FTTH (Fiber-to-the-home), are becoming more common in Japan, Internet users are facing more threats such as cyber-attacks, computer viruses, spam and phishing. As a result, demand for a safer Internet environment is continually increasing. Through this acquisition, IIJ plans to expand its Internet service business by enhancing the development and provision of high-quality network-related services that consumers can use more safely, leveraging its engineering and network operating expertise that it has cultivated in its Internet related business for its corporate customers.
The details of the impending acquisition are as follows: (1) Company name: hi-ho, Inc. (2) Representative: Koichi Suzuki, Chairman and Representative Director Isao Momota, President and Representative Director (3) Location: 2-13-10 Kyobashi, Chuo-ku, Tokyo (4) Date of establishment: June 1, 2007 (planned) (5) Main business: Internet access service business and corporate solution business (6) Fiscal year end: March 31 (7) Number of employees: 46 (estimated as of June 1, 2007) (8) Main business locations: Tokyo and Osaka (9) Capital: JPY 100 million (10) Number of shares outstanding: 2,000 (11) Major shareholder and its ownership: Panasonic Network Services Inc. 100.0% (12) Trend of financial results in the recent fiscal year (for reference): hi-ho, Inc. does not have any financial results for the recent fiscal year since it plans to succeed the Internet service related business and others of Panasonic Network Services Inc. and be newly established on June 1, 2007. The financial results related to the business succeeded to hi-ho, Inc. for the fiscal year ending March 31, 2007 will be estimated to be revenues of JPY 5,468 million, gross margin of JPY 879 million and operating income of JPY 284 million. The number of customers in its Internet service business is approximately 200 thousand. The total shareholders’ equity of hi-ho, Inc. upon its establishment is estimated to be JPY 556 million. 3. The company from which IIJ is acquiring the shares (1) Company name: Panasonic Network Services Inc. (2) Representative: Kenichi Tsunashima, President and Representative Director (3) Location of headquarters: 2-13-10 Kyobashi, Chuo-ku, Tokyo (4) Main business: Internet connectivity, Internet solutions and network service business (5) Relationship with IIJ: PNS has a transaction with IIJ for Internet connectivity services and others. PNS does not have any capital and personal relationships with IIJ. 4. Number of shares to be acquired, cost of the acquisition and ownership change by the acquisition (1) Number of shares owned before the acquisition: 0 (ownership: 0%) (Number of voting stock: 0) (2) Number of shares to be acquired: 2,000 (cost of the acquisition: JPY 1,200 million) (Number of voting stock: 2,000) (3) Number of shares owned after the acquisition: 2,000 (ownership: 100%) (Number of voting stock: 2,000) 5. Schedule March 29, 2007 Resolution of the Board of Directors of IIJ Close of the share transfer contract June 1, 2007 New company to be established (planned) Transfer of shares (planned) 6.
Through the acquisition of shares, hi-ho, Inc. will become IIJ’s consolidated subsidiary. However, the acquisition will not affect IIJ’s consolidated financial results for the fiscal year ending March 31, 2007 since IIJ plans to acquire the shares on June 1, 2007. IIJ plans to announce its financial target including an affect of the change on the consolidated subsidiary for the fiscal year ending March 31, 2008 in consideration of the acquisition upon announcement of the financial results for the fiscal year ending March 31, 2007 in May 2007.
Founded in 1992, Internet Initiative Japan Inc. is one of Japan’s leading Internet-access and comprehensive network solutions providers. IIJ and its group of companies provide network solutions that mainly cater to high-end corporate customers. The company’s services include high-quality systems integration and security services, Internet access, hosting/housing, and content design. Moreover, the company has built one of the largest Internet backbone networks in Japan, and between Japan and the United States. IIJ was listed on NASDAQ in 1999 and on the First Section of the Tokyo Stock Exchange in 2006.
For more information about IIJ, please visit: www.iij.ad.jp/en.