Notice on the Acquisition of Equity Interest in Fiery, LLC (Specified Subsidiary)
September 19, 2024
Company name: Seiko Epson Corporation
Name of representative: Yasunori Ogawa, President and Representative Director
(Securities code: 6724; Prime Market)
Inquiries: Corporate Communications Department
(Telephone: +81-266-52-3131)
Seiko Epson Corporation ("Company") hereby announces that it has resolved at a meeting of the Board of Directors as of September 18, 2024, to acquire all equity interests of Fiery, LLC ("Fiery") and making it a subsidiary of the Company, subject to customary closing conditions including required regulatory approvals. As the invested amount to Fiery is more than 10% of the Company's capital, therefore, Fiery will become a specified subsidiary of the Company.
1. The reason for the acquisition
Fiery, headquartered in the US, is a leading independent provider of comprehensive printing business-to-business software solutions and services including digital front end ("DFE"1) servers for industrial and digital printing.
The Company and Fiery each have a long history of supporting customers to maximize their productivity with the use of digital printing technology which meets needs arising from office-use to commercial or industrial-use.
This acquisition of Fiery would enable the Company and Fiery to work together to accelerate growth in the digital printing field and enhance corporate value.
1Digital Front End: A general term for software and hardware used to process print data and manage the printing process.
2. The detail of Fiery
| (1) Name | Fiery, LLC | |
| (2) Location | 6453 Kaiser Drive, Fremont, CA 94555 USA | |
| (3) Job title and name of representative | Chief Executive Officer, Toby Weiss | |
| (4) Description of business | Digital Printing Software Solutions | |
| (5) Invested amount | USD 301.4 million | |
| (6) Date of establishment | October 15, 2021 | |
| (7) Major shareholders and ownership ratios | East Private Holdings I, LLC : 95% of common units Electronics For Imaging, Inc. : 5% of common units and 100% of preferred units |
|
| (8) Relationship between the Company and said company | Capital relationship | - |
| Personnel relationship | - | |
| Business relationship | Although the Company has a trading account with Fiery, there is no ordinary business relationship with Fiery. | |
| (9) Operating results and financial positions for the last two years2 | ||
| As of / Fiscal year ended | December 2022 | December 2023 |
| Net assets | USD 296.2 million | USD 307.7 million |
| Total assets | USD 348.3 million | USD 394.9 million |
| Net sales | USD 184.6 million | USD 201.5 million |
| Profit before income taxes | USD 47.0 million | USD 55.4 million |
2 The figures have not been audited.
3. The details of sellers
(1)
| (1) Name | East Private Holdings I, LLC |
| (2) Location | 825 Third Avenue, Suite 2850, New York, NY 10022 USA |
| (3) Job title and name of representative | Director, Frank Baker |
| (4) Description of business | An affiliate of Siris Capital Group, LLC, a leading private equity firm that targets control investments in companies that provide mission-critical technology infrastructure. Siris leverages its network of exclusive Executive Partners to identify opportunities and drive strategic and operational value. Siris is based in New York and West Palm Beach and has approximately $7 billion in assets under management as of December 31, 2023. |
| (5) Date of establishment | April 9, 2019 |
| (6) Relationship between the Company and said company | - |
(2)
| (1) Name | Electronics For Imaging, Inc. |
| (2) Location | 12 Innovation Way, Londonderry, NH 03053 USA |
| (3) Job title and name of representative | Chief Executive Officer, Frank Pennisi |
| (4) Description of business | Manufacturing and sales of digital inkjet printers and digital printing related solutions |
| (5) Date of establishment | November 21, 1988 |
| (6) Relationship between the Company and said company | - |
4. Number of shares acquired, acquisition costs, and shareholding before and after acquisition
| (1) Number of shares held before the change | 0% | |
| (2) Number of shares to be acquired | 100% (200 common units and 1,000 preferred units) | |
| (3) Acquisition costs3 | Equity value | approx. USD 591.4 million |
| Advisory fees and related costs (Estimate) | approx. JPY 1.35 billion | |
| Total (Estimate) | approx. JPY 84.5 billion | |
| (4) Number of shares held after the change | 100% | |
3 Exchanging rate in this announcement is USD = 140.59 JPY as of September 17, 2024.
5. Timetable
| (1) Date of resolution at the meeting of the Board of Directors | September 18, 2024 |
| (2) Signing Date | September 19, 2024 |
| (3) Closing Date | Within 2024 (scheduled) |
6. Future outlook
The name and organization of Fiery will remain the same. Fiery will become a consolidated subsidiary of the Company within 2024 as a result of this acquisition, and it will be included in our consolidated financial results from the third quarter of the fiscal year ending March 31, 2025. The impact of this acquisition on our future business performance is currently under scrutiny, and the Company will promptly announce any matters that should be publicly announced.
Reference: Consolidated financial forecast for the current fiscal year as of July 31, 2024 and consolidated financial results for the previous fiscal year in the Company
| Consolidated Net Sales | Consolidated Operating profit | Consolidated Profit before Income Taxes | Consolidated Profit Attributable to Owners of Parent | |
|---|---|---|---|---|
| Forecast of Consolidated Financial Results for the Current Fiscal Year (Year ending March 31, 2025) |
1,370.0 billion yen | 77.0 billion yen | 77.0 billion yen | 54.0 billion yen |
| Consolidated Financial Results for the Previous Fiscal Year | 1,313.9 billion yen | 57.5 billion yen | 70.0 billion yen | 52.6 billion yen |
About Epson
Epson is a global technology leader whose philosophy of efficient, compact and precise innovation enriches lives and helps create a better world. The company is focused on solving societal issues through innovations in home and office printing, commercial and industrial printing, manufacturing, visual and lifestyle. Epson's goal is to become carbon negative and eliminate use of exhaustible underground resources such as oil and metal by 2050.
Led by the Japan-based Seiko Epson Corporation, the worldwide Epson Group generates annual sales of more than JPY 1 trillion.
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