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The Dentsu Group strengthens its digital advertising experience in Japan by rising its stake in Septeni Group to 52%

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Dentsu Group Inc. (Tokyo: 4324; ISIN: JP3551520004; President & CEO: Toshihiro Yamamoto; Head Workplace: Tokyo; Capital: 74,609.81 million yen; hereinafter known as “the Firm”) introduced right now that it’ll improve its stake in Septeni Holdings Co., Ltd. (Consultant Director: Koki Sato; Head Workplace: Tokyo; JASDAQ Securities Code: 4293; hereinafter known as “Septeni HD”) to 52.01%, making Septeni HD a consolidated subsidiary.
The transaction will additional strengthen the digital advertising enterprise inside Dentsu Japan Community (hereinafter known as “DJN”) *1, bringing experience and scale within the quick progress digital media market. The transaction strengthens the alliance between Septeni Group and DJN, with the intention of turning into the most important and most superior digital advertising companion for shoppers in Japan.

As of January 4, 2022 (scheduled), the Firm will purchase a further 82,887,394 of Septeni HD shares by the next three actions:

i) Dentsu Direct Inc. will turn out to be an entirely owned subsidiary of Septeni HD by a share trade.

ii) Dentsu Group Inc. will subscribe to the issuance of recent shares by a third-party allocation by Septeni HD.

iii) Dentsu Group Inc. will switch a portion of Dentsu Digital Inc. shares to Septeni HD.

In consequence, by holding 52.01% of Septeni HD shares on a voting rights foundation, the Firm will make the Septeni Group firms, (holding firm Septeni HD), consolidated subsidiaries. On the identical day, Dentsu Direct Inc. will turn out to be a wholly-owned subsidiary of Septeni HD with Dentsu Digital Inc. turning into an equity-method affiliate of Septeni HD. Septeni HD will keep listed on JASDAQ and keep its impartial administration construction.

1. Cause for acquisition of shares

On October 28, 2018, the Firm introduced that Septeni HD would turn out to be an equity-method affiliate by a capital and enterprise alliance, with Dentsu Group Inc. proudly owning 20.98% of Septeni HD. Over the previous three years Septeni Group has labored intently with quite a few DJN firms (together with Dentsu Digital and Dentsu Inc.) to offer progressive, digital-led options. The welcoming of the Septeni Group into the Dentsu Group will additional broaden the synergies between the 2 Teams, strengthening digital advertising capabilities whereas accelerating DJN’s evolution into an Built-in Development Associate (IGP)*2 that’s dedicated to the sustainable progress of all shoppers and society.

The Septeni Group is one in every of Japan’s main web promoting company group targeted on the quick progress digital advertising enterprise. Septeni Group boasts a large shopper base in addition to improvement capabilities within the information options discipline and manga*3 content material within the media platform enterprise. It has established a robust aggressive place by enlargement of its shopper portfolio mixed with experience within the recruitment and coaching of digital consultants, using data-driven AI-type personnel programs. In consequence, the Septeni Group continued to generate progress in gross revenue and non-GAAP working revenue regardless of the COVID-19 disaster.

There are three particular elements of strategic significance in relation to this deepening of the capital and enterprise alliance.

i) Accelerating digitalization of the promoting enterprise

– The mixing of Septeni Group’s digital experience will enable DJN to offer extra refined digital options.

– The shopper base of Dentsu Digital and Septeni Group are complimentary – permitting for the enlargement of DJN’s present shopper portfolio in Japan, gaining publicity to excessive progress cell and D2C advertisers.

– The deeper alliance may also allow versatile utilization of experience, with DJN getting access to Septeni Group’s extremely expert engineers to fulfill the quickly rising demand for digital promoting.

ii) Strengthen capabilities in buyer expertise design, commerce and activation.

– The Septeni Group and DJN will present finest in school programmatic promoting and evaluation companies to shoppers

– By using Dentsu Direct’s advertising planning capabilities in on-line/offline built-in advertising and D2C options, Septeni Group and DJN can strengthen their built-in answer choices.

– The deployment of Septeni Group’s CRM and e-commerce promoting companies inside DJN will enable DJN’s present shoppers to construct wider and simpler relationships with their shoppers.

iii) Strengthening operations and improvement of companies and merchandise.

– The Septeni Group has engineers with excessive experience based mostly in each Japan and abroad, with offshore places liable for promoting operations and artistic manufacturing.

– Combining these sources with present Dentsu Japan Community capabilities will enable for deeper collaborations with platforms, creating progressive, information pushed options for shoppers.

Since early 2021 DJN has targeted on remodeling the enterprise into 4 enterprise domains (AX, BX, CX, and DX)*4. Rising its stake in Septeni HD will improve the sophistication of the AX (Promoting Transformation) area. Operations will broaden to the area that straddles the CX and AX domains, adopted by the BX and DX domains, and speed up its evolution into an Built-in Development Associate.
The Dentsu Group stays dedicated to the Medium-term Administration Plan and targets introduced in February 2021.

2. Further share acquisition methodology

i) Share trade of three,900 shares of Dentsu Direct frequent inventory and 12,768,600 shares of Septeni HD frequent inventory (all Dentsu Direct shares are to be transferred to Septeni HD. Dentsu Direct and Dentsu Elfto Architect, at present a subsidiary of Dentsu Direct, are to turn out to be subsidiaries of Septeni HD.)

ii) Subscription for brand new shares issued by Septeni HD by third-party allocation (complete 70,118,794 shares of Septeni HD frequent inventory, quantity paid per share: 465 yen, complete quantity paid: 32,605 million yen)

iii) Switch of three,675 shares of Dentsu Digital frequent inventory to Septeni HD (proportion of voting rights of Dentsu Digital shares: 25.0%, complete quantity acquired: 31,250 million yen)

Be aware: The Distinction between the quantity paid of 32,605 million yen and the quantity acquired of 31,250 million yen is roughly 1.3 billion yen.

3. Profile of SEPTENI HOLDINGS CO., LTD.

Title

SEPTENI HOLDINGS CO., LTD.

Location

Sumitomo Fudosan Shinjuku Grand Tower 30F, 8-17-1
Nishi-shinjuku, Shinjuku-ku, Tokyo, Japan

Consultant

Koki Sato, Consultant Director

Line of enterprise

Illustration and administration of the Septeni Group firms by the holding of shares and different means

Capital

2,125 million yen

Date of multinational

October 1990

Variety of issued shares

138,916,500 shares (as of the top of September 2021)

Fiscal year-end

Finish of September

Variety of workers

Consolidated group (as of the top of September 2021)
1,251 everlasting workers / 1,511 different workers

URL

https://www.septeni-holdings.co.jp/en/

4. Dentsu Group Inc.’s holding of Septeni HD shares earlier than and after the extra acquisition of shares

As of October 28, 2021

26,895,001 shares of frequent inventory
(proportion of voting rights held: 20.98%)

After the extra acquisition of shares

109,782,395 shares of frequent inventory
(proportion of voting rights held: 52.01%)

5. Schedule

Title Date of conclusion of capital and enterprise alliance settlement

October 28, 2021 (this present day)

Efficient date of share trade

January 4, 2022 (scheduled)

Third-party allocation fee date

January 4, 2022 (scheduled)

Share switch execution date

January 4, 2022 (scheduled)

6. Adjustments within the Dentsu Group’s capital relationship and Group construction earlier than and after the extra acquisition of shares

Reference:
SEPTENI HOLDINGS CO., LTD.: https://www.septeni-holdings.co.jp/en/
SEPTENI CO., LTD.: https://www.septeni.co.jp/en/
Septeni Japan, Inc.: https://www.septenijapan.co.jp/
FLINTERS, Inc.: https://www.flinters.co.jp/ (Japanese solely)
COMICSMART INC.: https://www.comicsmart.co.jp/ (Japanese solely)
Dentsu Group Inc.: https://www.group.dentsu.com/en/
Dentsu Digital Inc.:https://www.dentsudigital.co.jp/ (Japanese solely)
DENTSU DIRECT INC.: https://www.ddir.co.jp/ (Japanese solely)
Dentsu Elfto Architect: https://elfto.com/ (Japanese solely)

*1: Dentsu Japan Community (DJN) is an in-house firm inside Dentsu Group Inc. It additionally refers back to the community itself which consists of roughly 130 Dentsu Group firms in Japan.
https://www.japan.dentsu.com/en/about.html

*2: Please seek advice from this website for particulars on “Built-in Development Associate”
https://www.japan.dentsu.com/en/

*3: Manga are Japanese comedian books, a highly regarded artwork type overlaying a variety of genres.

*4: New enterprise domains (AX, BX, CX and DX)
New enterprise domains set based mostly on “the change in enterprise formation” of DJN. DJN is within the course of of reworking its enterprise domains into 4 new enterprise domains (AX, BX, CX and DX) with a view to present shopper firms with Built-in Development Options of the best high quality and with probably the most environment friendly worth chain. These options are designed to help the expansion of shopper firms from a wider space past promoting and advertising, and to contribute to the expansion of society as a complete. The specialised companies in every area realized by this transformation and the superior companies throughout the 4 domains will convey a cycle of transformation and progress to the enterprise of shopper firms.

As well as, with a view to improve the worth created by these 4 enterprise domains, maximize the ability of particular person firms, and strengthen its competitiveness, DJN has already applied or determined to implement numerous measures to optimize the capabilities of the DJN firms that make up the Japan enterprise, together with the institution of a digital group and grouping the businesses from the angle of areas of experience and synergies. The primary measures are as follows.

AX (Promoting Transformation) area:
Area to maximise the sophistication and effectivity of promoting
BX (Enterprise Transformation) area:
Area to help the enterprise transformation of shopper firms
CX (Buyer Expertise Transformation) area:
Area to design and ship the optimum buyer expertise
DX (Digital Transformation) area:
Area to facilitate transformation of the advertising infrastructure

For Further Inquiries

Tokyo

London

Media –
Please contact
Company Communications:

Shusaku Kannan:
+81 3 6217 6602
[email protected]

Dani Jordan:
+44 7342 076 617
[email protected]

Traders & analysts –
Please contact
Investor Relations:

Yoshihisa Okamoto:
+81 3 6217 6613
[email protected]

Kate Stewart:
+44 7900 191 093
[email protected]

Disclaimer

Dentsu Group Inc. printed this content material on 28 October 2021 and is solely liable for the data contained therein. Distributed by Public, unedited and unaltered, on 28 October 2021 06:40:06 UTC.



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