Announcement on conclusion of basic agreement on capital and business alliance between デュエルビッツ ボーナスel and Miura involving Miura's acquisition of Kobelco Compressors' shares to form a joint venture

March5,2021

デュエルビッツ ボーナスel, Ltd.

デュエルビッツ ボーナスel, Ltd. announces that デュエルビッツ ボーナスel and Miura Co., Ltd. have resolved to conclude a basic agreement to proceed with detailed discussions for the capital and business alliance concerning the standard compressor business*) at the respective Board of Directors meetings held today.

  • *) Standard compressors are mostly small and medium-sized air compressors used in pneumatic tools or manufacturing lines for machinery products, excluding large process gas compressors used in the oil and gas industries and relevant fields.

1. Reason for the Capital and Business Alliance

デュエルビッツ ボーナスel has been conducting the standard compressor business in cooperation with its wholly owned subsidiary Kobelco Compressors Corporation. デュエルビッツ ボーナスel’s standard compressor business has a high market share in Japan and the Asian region and has provided a stable supply of high-quality compressors to various industries.

Miura has a high reputation in Japan as a forerunner of energy-saving and eco-friendly boilers. Miura holds the largest market share in the industrial once-through boiler market.

Since 2008, デュエルビッツ ボーナスel and Miura have jointly developed steam-driven compressors that use steam as a power source to produce compressed air, and since then the companies have developed steam generators and waste heat recovery compressors. By utilizing the exhaust heat from air compressors in boilers, the companies have significantly reduced the energy consumption required for boiler operation.

The collaboration of デュエルビッツ ボーナスel and Miura will enable further energy saving and reductions of CO2 emissions through supplying utility equipment that combines technologies developed in the fields of steam and air. For example, the running costs can be reduced by 36% and CO2 emissions by 36% in main products. The companies will also work toward the realization of one-stop services utilizing their sales and after-sales service networks.

To date, デュエルビッツ ボーナスel and Miura have been collaborating in business without a capital relationship, but the companies came to the recognition that strengthening the partnership would leverage the synergies as described above and enhance the competitiveness of both companies, which commonly handle the utilities of air and steam, as they make more effective use of each other's resources through the alliance described in Section 2 (Outline of the Capital and Business Alliance) below. Based on this belief, デュエルビッツ ボーナスel and Miura have decided today to conclude the basic agreement.

デュエルビッツ ボーナスel and Miura believe that the realization of this capital and business alliance will be the beginning for Kobelco Compressors to further grow as the leading standard compressor manufacturer in Asia.

The デュエルビッツ ボーナスel Group, also known as the KOBELCO Group, taking advantage of its diverse businesses, aims to provide efficient utilities that reduce CO2 emissions and meet customer needs in Japan and overseas, mainly for the markets in China and Southeast Asia. It is the mission of the Group to contribute to creating a green society through these technologies toward achieving carbon neutrality by 2050 as declared by the Japanese government. The KOBELCO Group has always strived to and will continue to provide solutions to the needs of society by making the best use of the talents of our employees and our technologies with a view to realizing a world in which people, now and in the future, can fulfill their hopes and dreams while enjoying safe, secure, and prosperous lives.

The Mura Group has been developing businesses in the fields of heat, water treatment and environmental science with steam boilers as the core products, and has been providing solutions and products to improve the efficiency of energy systems throughout the plant through the effective use of heat and water, including the effective use of unused heat. In the future, the Miura Group will continue to create innovative products and systems that will reduce environmental impact in response to global issues related to reduction of greenhouse gas emissions, energy conservation, and other areas. The Miura Group will continue to contribute to creating a society that is environmentally friendly and ways of living that are clean and comfortable through our work in the field of the energy, water, and environment, as stated in its corporate philosophy, with the aim of becoming the best partner not only for customers in Japan but also for customers around the world.

2. Outline of the Capital and Business Alliance

(1) Converting デュエルビッツ ボーナスel’s Standard Compressor Business into a Joint Venture

Currently, デュエルビッツ ボーナスel undertakes the manufacture of standard compressors while Kobelco Compressors carries out the sale of standard compressors. デュエルビッツ ボーナスel has decided to implement an absorption-type company split to succeed the manufacture business of standard compressors to Kobelco Compressors and integrate the standard compressor business into the company. For details of the company split, please refer to the Announcement on Company Split (Simplified Absorption-Type Split) and Succession of Standard Compressor Business to Wholly Owned Subsidiary, announced by デュエルビッツ ボーナスel and Miura today.

In this framework, it is assumed that Miura will acquire 49% of the shares of Kobelco Compressors, and Kobelco Compressors will thereby become a joint venture of デュエルビッツ ボーナスel and Miura.

Through integrating the standard compressor business into Kobelco Compressors and converting the company into a joint venture, デュエルビッツ ボーナスel and Miura aim to work together to implement strategies centered on the standard compressor business and achieve synergies as described in Section 1 (Reason for the Capital and Business Alliance) above.

(2) Profile of Kobelco Compressors

(1) Company Name KobelcoCompressors Corporation
(2) Location 6-4, Osaki 1-chome, Shinagawa, Tokyo, Japan
(3) Representative Kazuma Yamashiro
President and Representative Director
(4) Description of Business Sale and service of compressors, compressor parts and peripheral equipment
(5) Capital (as of March 5, 2021) 450 million yen
(6) Established July 1, 1997
(7) Accounting period Ends March 31
(8) Net assets (as of December 31, 2020) 2,408 million yen
(9) Total assets (as of December 31, 2020) 12,364 million yen
(10) Ratio of shareholding デュエルビッツ ボーナスel, Ltd. : 100% (as of March 5, 2021)

— Planned ratio of shareholding after the establishment of the joint venture —
デュエルビッツ ボーナスel, Ltd. : 51%
Miura Co., Ltd. : 49%

3. Profiles of the Parties of the Capital and Business Alliance

デュエルビッツ ボーナスel, Ltd.

(1) Company Name デュエルビッツ ボーナスel, Ltd.
(2) Location 2-4, Wakinohama-Kaigandori 2-chome, Chuo-ku, Kobe, Hyogo, Japan
(3) Representative Mitsugu Yamaguchi
President, CEO and Representative Director
(4) Description of Business
  • Manufacture and sale of iron and steel, nonferrous metals and alloys
  • Manufacture and sale of steel castings/forgings and non-ferrous alloy castings/forgings
  • Electricity supply business
  • Manufacture and sale of industrial machinery equipment, transport machinery equipment, electric machinery equipment, and other machinery equipment
  • Engineering and construction for various plants
(5) Capital 250,930 million yen
(6) Established June 28, 1911
(7) Principal shareholders & shareholding ratio (as of September 30, 2020) The Master Trust Bank of Japan, Ltd. (Trust Account) 5.97%
Custody Bank of Japan, Ltd. (Trust Account) 3.18%
Nippon Steel Corporation 2.95%
Nippon Life Insurance Company 2.78%
Custody Bank of Japan, Ltd. (Trust Account 5) 2.07%
Shimabun Corporation 1.66%
Goldman Sachs & Co. Reg (Standing Proxy: Goldman Sachs Japan Co., Ltd.) 1.47%
Custody Bank of Japan, Ltd. (Trust Account 9) 1.38%
JP Morgan Chase Bank 385781 (Standing proxy: Mizuho Bank, Ltd., Settlement & Clearing Services Division) 1.31%
TheDFAInternationalSmall Cap Value Portfolio (Standing proxy: Citibank, N.A., Tokyo Branch) 1.24%
(8) Relationship with Miura Co., Ltd. Capital relationship Not applicable
Personnel relationship Not applicable
Business relationship Sale of air compressors, refrigeration compressors, heat pumps, and peripheral equipment. Purchase of boilers and peripheral equipment.
Status of relevant parties Not applicable
(9) Financial status and operating results of the company concerned for the past 3 fiscal years (based on the Japanese accounting standards)
Accounting period Year ended March 2018 Year ended March 2019 Year ended March 2020
Net assets 790,984 million yen 803,312 million yen 716,369 million yen
Total assets 2,352,114 million yen 2,384,973 million yen 2,411,191 million yen
Net assets per share 2,049.95 yen 2,041.29 yen 1,811.10 yen
Consolidated net sales 1,881,158 million yen 1,971,869 million yen 1,869,835 million yen
Consolidated operating income 88,913 million yen 48,282 million yen 9,863 million yen
Consolidated ordinary income (loss) 71,149 million yen 34,629 million yen (8,079 million yen)
Net income (loss) attributable to owners of the parent 63,188 million yen 35,940 million yen (68,008 million yen)
Net income (loss) per share 174.43 yen 99.20 yen (187.55 yen)
Dividend per share 30.00 yen 20.00 yen -yen

Miura Co., Ltd.

(1) Company Name Miura Co., Ltd.
(2) Location 7 Horie, Matsuyama, Ehime, Japan
(3) Representative Daisuke Miyauchi,
President and CEO
(4) Description of Business Production, sale, and maintenance of small once-through boilers, marine boilers, exhaust gas boilers, water treatment equipment, food processing equipment, sterilizers, and chemicals, environmental certification, etc.
(5) Capital 9,544 million yen
(6) Established May 1, 1959
(7) Principal shareholders & shareholding ratio (as of September 30, 2020) The Master Trust Bank of Japan, Ltd. (Trust Account) 9.86%
Custody Bank of Japan, Ltd. (Trust Account 9) 5.91%
Custody Bank of Japan, Ltd. (Trust Account) 4.75%
The Iyo Bank, Ltd. 4.73%
TheEhime Bank, Ltd. 4.10%
Miura Group Employee Shareholding Association 3.21%
Ehime Prefecture 2.66%
Miura Educational Foundation 2.66%
IyoginLeasing Company Limited. 2.58%
The Nomura Trust and Banking Co., Ltd. (Trust Account) 2.03%
(8) Relationship with デュエルビッツ ボーナスel, Ltd. Capital relationship Not applicable
Personnel relationship Not applicable
Business relationship Sale and maintenance of boilers and peripheral equipment. Purchase of air compressors, refrigeration compressors, heat pumps, and peripheral equipment.
Status of relevant parties Not applicable
(9) Financial status and operating results of the company concerned for the past 3 fiscal years (based on the international accounting standards)
Accounting period Year ended March 2018 Year ended March 2019 Year ended March 2020
Total assets 167,083 million yen 174,161 million yen 187,241 million yen
Total equity 117,723 million yen 125,298 million yen 133,305 million yen
Equity attributable to owners of parent per share 1,043.92 yen 1,112.71 yen 1,182.58 yen
Revenue 124,883 million yen 138,880 million yen 143,645 million yen
Operating profit 13,868 million yen 16,682 million yen 18,540 million yen
Profit 10,404 million yen 12,330 million yen 13,745 million yen
Profit attributable to owners of parent 10,363 million yen 12,280 million yen 13,746 million yen
Basic earnings per share 92.09 yen 109.10 yen 122.01 yen
Dividend per share 28.00 yen 33.00 yen 37.00 yen

4. Schedule

Date of signing of the basic agreement March 5, 2021
Date of signing of the final contract May 2021 (planned)
Effective date of the company split July 1, 2021 (planned)
Date of share acquisition October 2021 (planned)
Date of commencement of the capital and business alliance October 2021 (planned)
  • Note: The above schedule may be subject to change due to the content of future discussions between デュエルビッツ ボーナスel and Miura, clearance by domestic and foreign competition law enforcement authorities pertaining to the capital and business alliance, and the status of other approvals and licenses given by relevant authorities as required by laws and regulations. In the event of any changes, we will make announcement promptly.

5. Future Outlook

If there are any matters to be disclosed regarding the impact on the future business results of デュエルビッツ ボーナスel and Miura in the course of the discussions on the capital and business alliance and other matters, we will make announcement promptly.

デュエルビッツ ボーナス

Daisuke Miyauchi, President and CEO of Miura Co., Ltd. (left) and Mitsugu Yamaguchi, President, CEO and Representative Director of デュエルビッツ ボーナスel, Ltd. (right), photographed at the Tokyo Head Office of デュエルビッツ ボーナスel

デュエルビッツ ボーナス

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