Press Release
Announcement of Completion of Acquisition of Membership Interests in Central Conveyor
2018/06/18
Tsubaki is pleased to announce that it completed the acquisition of Central Conveyor Company, LLC and its five subsidiaries (“Central Conveyor”) through its wholly owned subsidiary, U.S. Tsubaki Holdings, Inc. (“USTH”) and made them consolidated subsidiaries of Tsubaki on June 15, 2018.
Reasons for acquisition
The Tsubakimoto Chain Group aims to expand its Materials Handling business in addition to its Chain and Automotive Parts businesses and become a diversified machinery manufacturer in the U.S. market where significant growth is expected to continue. To achieve this goal, Tsubaki acquired Central Conveyor, a conveyor system integrator with blue-chip customers in the U.S. automotive and other industries, and made it a consolidated subsidiary.
Outline of USTH
Company name:
U.S. Tsubaki Holdings, Inc.
Address:
(HQ) 301 E. Marquardt Drive, Wheeling, IL 60090 U.S.A.
Representative:
Tetsuya Yamamoto, President
Business description:
U.S. holding company
Capital
$33,500,000
Outline of Central Conveyor
Acquisition scope:
Central Conveyor Company, LLC and its five subsidiaries listed below
Central Automation Holdings, Inc.
Central Process Engineering, LLC
Electrical Insights, LLC
KCI, Incorporated
Alka USA, LLC
Address:
(HQ) 52800 Pontiac Trail Wixom, MI 48393, USA
Representative:
Rick Wells, CEO
Business description:
Design, manufacture, construction, and sales of conveyor and materials handling systems
Member Capital:
$21,259,000
Year of establishment:
1993
Main shareholders and shareholdings:
(1) NS CCC Acquisition LLC: 75%
(2) Central Conveyor Holdings, Inc.: 19.81%
Relationship with Tsubaki:
There is no significant capital, personnel or business relationship between Central Conveyor and Tsubaki.
Consolidated business results and financial position over the past three fiscal periods (Unit: USD 000s):
| Fiscal Period | Dec 2015 | Dec 2016 | Dec 2017* |
|---|---|---|---|
| Net assets | 16,829 | 22,181 | 31,675 |
| Total assets | 66,438 | 76,083 | 111,558 |
| Sales | 107,380 | 113,258 | 242,269 |
| Operating income | 7,442 | 10,811 | 19,950 |
| Ordinary income | 3,398 | 10,032 | 17,529 |
| Net income attributable to Central Conveyor | 3,398 | 10,032 | 16,871 |
Outline of other parties to the acquisition
Details of the shareholders including the main shareholders above are undisclosed because consent from such other parties could not be obtained. There is no significant capital, personnel or business relationship between Tsubaki and any of the shareholders.
Percentage of voting rights pertaining to acquired interests, acquisition price, and percentage of voting rights before and after acquisition
(1) Percentage of voting rights before acquisition:
0.0%
(2) Percentage of voting rights pertaining to acquired interests:
100%
(3) Acquisition price:
141 million US dollars (*)
(4) Percentage of voting rights before acquisition:
100%
(*) Includes debt, etc. in addition to the funds for the membership interests. Further, pursuant to the Purchase and Sale Agreement (“PSA”), the base amount above shall be adjusted according to an increase or decrease in working capital, etc. through the Closing.
Transfer schedule
(1) Execution of Purchase and Sale Agreement :
Apr 24, 2018 (EST)
(2) Transfer date of membership interests:
June 15, 2018 (EST)
Future outlook
Tsubaki intends to make Central Conveyor a consolidated subsidiary from FY2018 (fiscal period ending March 31, 2019). Consequently, there will be no impact on Tsubaki’s FY2017 consolidated forecast (fiscal period ending March 31, 2018) which was disclosed on February 7, 2018. Tsubaki also intends to disclose the financial impact on its FY2018 consolidated forecast at an appropriate time in accordance with the Timely Disclosure Rules of the Tokyo Stock Exchange once the details have been determined.
