Renesas Electronics Corporation, a premier provider of advanced semiconductor solutions, announced its decision to transfer all of Renesas Electronics’ shares in Renesas SP Drivers Inc. (“Renesas SP Drivers”), a consolidated subsidiary of Renesas Electronics (the “Share Transfer”)., to Synaptics Holding GMBH (“Synaptics Holding”), a wholly-owned subsidiary of Synaptics Inc. In accordance with the Share Transfer, Renesas SP Drivers Taiwan Inc., (“Renesas SP Drivers Taiwan”), a subsidiary of Renesas SP Drivers will no longer be a subsidiary of Renesas Electronics.
1. Background of the Share Transfer
As outlined in the Renesas Electronics’ press release, “Renesas Electronics Shows Direction of Renesas Group,” issued on August 2, 2013, Renesas Electronics identified fields and regions where growth is expected in the medium to long term and areas where it can outpace the competition, and will focus on three fields where it has strengths and can compete effectively: automotive (automotive control and automotive information), industrial/networking (industrial/home appliance, OA and ICT), and general-purpose products. In parallel, Renesas Electronics have been carrying out structural reforms aimed at creating an organization that is consistently profitable, even when exposed to risks (natural disasters, market stagnation, etc.).
Renesas SP Drivers was established in 2008 as a joint venture of display driver IC business, which does not fall under Renesas Electronics’ three focus fields. While its operation is focused on design and development, Renesas SP Drivers also offers manufacturing service by outsourcing its production to foundries. The Company has continued to perform well in recent years, buoyed by vigorous demand for smartphones and tablet devices.
Under such circumstances, based on its structural reform policies, Renesas Electronics has been looking into the possibility of transferring ownership to another company which focuses on display driver IC business and also is expected to proactively invest its management resources into this business.
Having been approached by Synaptics with an offer to purchase all of Renesas Electronics’ shares in Renesas SP Drivers, Renesas Electronics evaluated the offer and the decision was reached that the transfer of the shares to Synaptics Holding, which is looking to strengthen its mobile handset business by integrating Renesas SP Drivers’ display driver IC technologies for small- to medium-sized LCD panels, will be beneficial to all stakeholders.
2. Outline of the subsidiary subject to the Share Transfer
2-1. Overview of the subsidiary (Renesas SP Drivers) subject to the Share Transfer
| (1) Company name | Renesas SP Drivers, Inc. | |||
|---|---|---|---|---|
| (2) Registered Head Office | 5-20-1, Josuihon-Cho, Kodaira-Shi, Tokyo, Japan | |||
| (3) Representative | Ikuo Kudo, Representative Director | |||
| (4) Major Operations | Design, development, sale, and marketing of LCD drivers and controllers for small- and medium-sized LCD panels | |||
| (5) Capital | 5 billion yen | |||
| (6) Established | March 11, 2008 | |||
| (7) Major Stockholders and Ownership Ratios | Renesas Electronics Corporation: 55% Sharp Corporation: 25% Global Powertec Co., Ltd.: 16% Powerchip Technology Corporation: 4% |
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| (8) Present Relationship between Corporate Parties | Capital Ties | Renesas Electronics owns 55% of shares in Renesas SP Drivers | ||
| Personal Ties | Four of Renesas Electronics employees concurrently serve as director or auditor of Renesas SP Drivers | |||
| Business Relationship | Renesas Electronics provides manufacturing, purchasing and other services to Renesas SP Drivers | |||
| (9) The Financial Results and Financial Position of the Subsidiary for the Past Three Years | ||||
| Accounting Period | Fiscal year ended March 2011 | Fiscal year ended March 2012 | Fiscal year ended March 2013 | |
| Net Asset | 4,276 million yen | 6,200 million yen | 11,974 million yen | |
| Total Asset | 8,608 million yen | 10,215 million yen | 19,540 million yen | |
| Net Asset Per Share | 42,759.45 yen | 62,002.53 yen | 119,744.53 yen | |
| Net Sales | 24,959 million yen | 24,362 million yen | 41,709 million yen | |
| Operating Income (Loss) | 3,338 million yen | 2,645 million yen | 8,946 million yen | |
| Net Income (Loss) | 3,240 million yen | 1,924 million yen | 5,774 million yen | |
| Net Income (Loss) Per Share | 32,403.96 yen | 19,243.08 yen | 57,742.01 yen | |
| Dividends Per Share | – | – | – | |
(Note) No consolidated financial statements are available.
2-2. Overview of the sub-subsidiary (Renesas SP Drivers Taiwan) subject to the Share Transfer
| (1) Company Name | Renesas SP Drivers Taiwan Inc. | |||
|---|---|---|---|---|
| (2) Registered Head Office | No.12, Li-Hsin Rd. 1, Hsinchu Science Park, Hsinchu, Taiwan | |||
| (3) Representative | Joe Wu, Chairman | |||
| (4) Major Operations | Design and sale of electronic devices | |||
| (5) Capital | 50 million NT$ | |||
| (6) Established | April 1, 2008 | |||
| (7) Major Stockholders and Ownership Ratios | Renesas SP Drivers, Inc.: 51% Quantum Vision Corporation 49% |
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| (8) Present Relationship between Corporate Parties | Capital Ties | Renesas SP Drivers owns 51% of shares in Renesas SP Drivers Taiwan and Renesas Electronics owns 55% of shares in Renesas SP Drivers | ||
| Personal Ties | Two of Renesas Electronics employees concurrently serve as director or auditor of Renesas SP Drivers Taiwan | |||
| Business Relationship | Renesas Electronics supplies small- to medium-sized LCD drivers/controllers to Renesas SP Drivers Taiwan | |||
| (9) The Financial Results and Financial Position of the Subsidiary for the Past Three Years | ||||
| Accounting Period | Fiscal year ended March 2011 | Fiscal year ended March 2012 | Fiscal year ended March 2013 | |
| Net Asset | 281 million yen | 508 million yen | 783 million yen | |
| Total Asset | 1,719 million yen | 2,357 million yen | 2,111 million yen | |
| Net Asset Per Share | 56.2 yen | 101.6 yen | 156.6 yen | |
| Net Sales | 4,088 million yen | 6,648 million yen | 7,674 million yen | |
| Operating Income (Loss) | 133 million yen | 258 million yen | 240 million yen | |
| Net Income (Loss) | 136 million yen | 219 million yen | 188 million yen | |
| Net Income (Loss) Per Share | 27.2 yen | 43.8 yen | 37.6 yen | |
| Dividends Per Share | – | – | – | |
(Note) The figures shown above have not been subject to the audits by an auditing firm.
3. Overview of the Transferee
3-1. Overview of Synaptics Holding
| (1) Company Name | Synaptics Holding GMBH | |
|---|---|---|
| (2) Registered Head Office | Zug / Switzerland | |
| (3) Representative | Studer, Peter Georg (President of the Management) | |
| (4) Major Operations | The purpose of the Company is the acquisition and permanent administration of participations and holdings in other companies. | |
| (5) Capital | CHF 420,000 (Swiss francs, approximately 48 million yen) | |
| (6) Consolidated Net Asset | CHF 1,205,859 (Swiss francs, approximately 137 million yen) | |
| (7) Consolidated Total Asset | CHF 1,225,929 (Swiss francs, approximately 139 million yen) | |
| (8) Established | June 2004 | |
| (9) Present Relationship between Corporate Parties | Capital Ties | There is no capital relationship between Renesas Electronics and Synaptics required to be referred to herein. There is no capital relationship between affiliates of Renesas Electronics and affiliates of Synaptics required to be referred to herein. |
| Personal Ties | There is no personnel relationship between Renesas Electronics and Synaptics required to be referred to herein. There is no personnel relationship between affiliates of Renesas Electronics and affiliates of Synaptics required to be referred to herein. | |
| Business Relationship | There is no business relationship between Renesas Electronics and Synaptics required to be referred to herein. There is no business relationship between affiliates of Renesas Electronics and affiliates of Synaptics required to be referred to herein. | |
| Status of Related Parties | Renesas Electronics is not deemed to be a related party of Synaptics. Affiliates of Renesas Electronics are not deemed to be a related party of affiliates of Synaptics. | |
(Note) The figures in yen listed in (5)-(7) are calculated based on the conversion rate of 1Swiss franc=113.79 yen.
3-2. Overview of the parent company of the transferee
| (1) Company Name | Synaptics Incorporated | |
|---|---|---|
| (2) Registered Head Office | 1251 Mckay Drive, San Jose, California, 95131, United States | |
| (3) Representative | Rick Bergman, President, CEO & Director | |
| (4) Major Operations | Worldwide developer and supplier of touch-based semiconductor solutions and fingerprint authentication for mobile devices and personal computers | |
| (5) Capital | 55,000 US$ (approximately 5.7 million yen) The Company has a capital surplus of 703,107,000 US$ (approximately 72,364 million yen) |
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| (6) Consolidated Net Asset | 628,597,000 US$ (approximately 64,695 million yen) | |
| (7) Consolidated Total Asset | 894,806,000 US$ (approximately 92,093 million yen) | |
| (8) Established | March 1986 | |
| (9) Present Relationship between Corporate Parties | Capital Ties | There is no capital relationship between Renesas Electronics and Synaptics required to be referred to herein. There is no capital relationship between affiliates of Renesas Electronics and affiliates of Synaptics required to be referred to herein. |
| Personal Ties | There is no personnel relationship between Renesas Electronics and Synaptics required to be referred to herein. There is no personnel relationship between affiliates of Renesas Electronics and affiliates of Synaptics required to be referred to herein. | |
| Business Relationship | There is no business relationship between Renesas Electronics and Synaptics required to be referred to herein. There is no business relationship between affiliates of Renesas Electronics and affiliates of Synaptics required to be referred to herein. | |
| Status of Related Parties | Renesas Electronics is not deemed to be a related party of Synaptics. Affiliates of Renesas Electronics are not deemed to be a related party of affiliates of Synaptics. | |
(Note) The figures listed in (5)-(7) are calculated based on the conversion rate of 1Swiss franc=102.92 yen.
4. Number of Shares to be Transferred and Status of Shares after the Transfer
| (1) Number of Shares before the Transfer | 55,000 shares (Ownership ratio: 55%) |
|---|---|
| (2) Number of Shares to be Transferred | 55,000 shares (Ownership ratio: 55%) |
| (3) Number of Shares after the Transfer | 0 share (Ownership ratio: 0%) |
(Note) The transfer price is currently being evaluated and will be disclosed once such amount is confirmed, which is scheduled to be at the completion of the share transfer.
5. Timeline of the Share Transfer
| (1) Approval of the Board of Directors and signing of the definitive agreement | June 10, 2014 |
|---|---|
| (2) Conclusion of share transfer agreement | June 11, 2014 |
| (3) Effective date of the share transfer | Third quarter of the fiscal year ending March 2015 (planned) |
6. Financial Outlook
In accordance with the Share Transfer, Renesas Electronics expects to record special income in the third quarter ending December 31, 2014. The Group will disclose the amount once confirmed information is available. Renesas Electronics is currently assessing the impact of the Share Transfer on Renesas Electronics’ consolidated financial results for the three months ending June 30, 2014. The Group intends to disclose the impact on its consolidated earnings from the Share Transfer when confirmed information is available.
