SUMIDA: Company News

Aquisition of Concord Electronics Industries by Entering into Share Purchase Agreement

June 15th 2009
Press Release

We, SUMIDA CORPORATION, hereby inform you that our 100% subsidiary, Sumida Power Electronics Co., Ltd. has completed the acquisition of Concord Electronics Industries by entering into share purchase agreements.

  1. Background
    While electrification progresses in such areas as environmental preservation, energy conservation and healthcare nowadays, we, as being specialized in manufacturing electronic components and modules based on coil technology, expect new demand for electronic components to grow in these areas. In light of these trends, we are strategically setting the course for new ventures and developing businesses which will be the third element in our future growth, in addition to sustainable growth in our existing consumer electronics and automotive businesses.

    In our mid-term business plan “Triple Ex” formulated last year, we put our strategic focus on new business area related to the trends towards energy conservation and electrification in automotive sector as well as industrial machinery, energy/environment and medical sectors. In pursuing the strategies, we have to enhance our capability to create higher value-added products through consolidating technologies that would complement our existing ones, and intend to take active measures to ally with and/or acquire suitable companies that have such technologies. As part of the strategic initiatives, we have acquired EIWA Co., Ltd. and MOSTEC, Inc. in October 2008 accordingly.

    Concord engages in development, manufacturing and sales of coils including high current transformers and reactors for consumer/industry electronics and medical equipments, and has been keeping close relationships with trusted customers thanks to their outstanding technologies. Judging that the demand of its main business is expected to be stable even under the current challenging business environment, and that greater synergy effect is expected through integrating the technologies, manufacturing and sales capacities of Sumida Group and Concord, we have entered into the share purchase agreement with Concord as of today.
  2. Expected Business Effect after Share Purchase
    By integrating the businesses of Concord through entire shareholding, we strongly expect the following synergy effects while expanding existing businesses:
    1. Product Line-ups for Medical Equipments
      Currently Concord’s 30% of sales is for medical equipments which Sumida can add as its new product line-ups. With Concord’s joining to the Group, we expect to gain a stepping stone in the market for medical equipments.
    2. Expansion of Customer Range
      As Sumida Group and Concord have fewer overlapped customers, we expect to further expand sales channel by sharing customer databases and maximizing the use of Sumida’s global sales network.
    3. Synergy Effect
      Sumida Group, especially EIWA who joined in the Group last year and Concord manufacture similar products related to consumer/industrial electronics. By utilizing the technologies, we expect to accelerate manufacturing speed of new products. In addition, as Concord has a production site in Vietnam which is in line with “Sumida Silk Road Concept”, one of the key areas of Triple Ex, we also expect to further enhance and expand our core competence, low-cost production capabilities.
  3. Outline of Share Purchase
    Number of Acquired Shares  108,000 shares (100% of issued shares)
    Precedent Shareholders Mr. Atsushi Ohta
    (Representative Director of Concord) etc.
    Contract Date June 15, 2009 (today)
    Share Acquisition Date July 3, 2009 
  4. Outline of Concord Electronics Industries
    Company Name Concord Electronics Industries
    Representative Representative Director Mr. Atsushi Ohta
    Address 7334-1, Kyowa, Sakuma-shi, Nagano
    Incorporation March, 1970
    Major Business Development, manufacturing and sales of high current
    transformers and reactors
    Sales Breakdown:
    For Consumer Electronics… 40%
    For Industry Instruments… 30%
    For Medical Equipments… 30% (as of July 31, 2008)
    Major Operation Sites Japan: Nagano (R&D, Manufacturing, Sales)
    Outside Japan: Vietnam (Manufacturing)
    Financial Year End July 31
    Employees 120 (excluding workers of subcontractors)
    Net Sales 2,260 million yen (as of July 31, 2008)
    Capital 54 million yen
    Listed or Unlisted  Unlisted
  5. Accounting Procedure and Impact on Sumida’s Financial Results
    1. Accounting Procedure
      In view of accounting, we plan to consolidate Concord from the 3rd quarter of FY2009.
    2. Impact on Sumida’s Financial Results 
      We will inform you of the possible impact on financial results of FY2009 in due course.

Please click on the press release link above for the pdf version of this article.