Itoki to set up strategic alliance with UB Office Systems Inc. and acquire Shanghai Allbest Furniture Co., Ltd. - Company to establish new China headquarters and build overseas business platform -

Sep. 15, 2017

Itoki to set up strategic alliance with UB Office Systems Inc. and acquire Shanghai Allbest Furniture Co., Ltd.

- Company to establish new China headquarters and build overseas business platform -

Itoki Corporation (headquarters: Joto-ku, Osaka City; president: Yoshiro Hirai; hereinafter “Itoki”) has announced that it will establish a new headquarters in China, and make this an overseas business platform in China and Asia. This will be done by holding a sales base to be constructed through a strategic business alliance with the major Taiwanese furniture manufacturer UB Office Systems Inc. (headquarters: New Taipei City, Taiwan; hereinafter “UB”), and a manufacturing base to be acquired by purchasing the medium-sized Chinese chair manufacturer Shanghai Allbest Furniture Co., Ltd. (headquarters : Shanghai, China; hereinafter “Allbest”).

The Itoki Group has been proactively promoting M&A and strategic business alliances since last year with a view to making its overseas business a pillar business in its 2020 medium-term management plan.
As a first step in this initiative, the group purchased the interior design company Tarkus of Singapore last year, and is planning to establish a new headquarters in China called “Novo Workstyle (China) Ltd.” The aim of this will be to build an overseas business platform and develop a spatial office solution business in China, which remains the largest market in the world and has abundant growth potential.

The new Chinese headquarters Novo Workstyle (China) Ltd. will serve as a platform for the Asian business development of the Itoki Group from the perspective of both manufacturing and sales with a focus on Chinese and Asian markets. As part of this, Yitengxi (Suzhou) Furniture Limited Company will be integrated with the recently purchased Allbest to create a production base, and sales resources and sales networks acquired based on the strategic business alliance UB will be used to form a sales base.
The Itoki headquarters will specialize in governance and aim to provide products and services that match local needs in a timely manner by substantially delegating authority to local top-level managers with excellent management skills and track records of reliability.

In terms of organization, Novo Workstyle (China) Ltd. will make Itoki’s Hong Kong-based affiliate Novo Workstyle Asia Ltd., which was established in May, into a holding company, and at the same time, under the umbrella of this holding company, the platform of Novo Workstyle (China) Ltd. will be utilized to establish Novo Workstyle HK Ltd., which will promote sales in Hong Kong and ASEAN.

Based on these business development initiatives, the Itoki Group will aim for 2020 consolidated sales for its overseas business?with the inclusion of China, ASEAN, and other regions?amounting to approximately 17 billion yen ^*1.

Fund procurement

As for the funding of this initiative, the company is planning to allot cash reserves that it holds and external borrowings.

Effect on business results

The effects of this initiative on business results in the current term (year ending December 2017) will be minor. The company will announce forecasts as they become available.

^*1 The consolidated sales of the Itoki Group’s overseas business in FY2016 amounted to approximately 1.2 billion yen.