Mar. 15, 2018
Toray Industries, Inc.
Toray to Purchase
TenCate Advanced Composites Holding B.V.

Toray Industries, Inc. (headquarters: Chuo-ku, Tokyo; President: Akihiro Nikkaku; hereinafter referred to as "Toray") announced that on March 14, 2018, it reached an agreement with Koninklijke Ten Cate B.V. (headquarters: Netherlands; hereinafter referred to as "KTC") to purchase the entire share of its subsidiary TenCate Advanced Composites Holding B.V. (headquarters: Netherlands; hereinafter referred to as "TCAC"), a Dutch carbon fiber composite material manufacturer (hereinafter referred to as "this acquisition"). Toray and KTC plan to sign without delay a share purchase agreement on this acquisition after completing discussions with the Works Council, as stipulated by Dutch laws. The acquisition will be carried out based on the premise of receiving approval, etc. from the regulatory authorities.

1. The objective
(1) Background
The global carbon fiber business field has been expanding steadily led by the demand for applications such as aircraft as well as environment and energy including windmill blades for wind power generation. In the aircraft industry, demand for medium- and small-sized, single aisle aircraft is growing significantly and the development of the next generation aircraft targeting such demand is expected to intensify. It is assumed that the use of thermoplastic prepreg will further increase for medium- and small-sized mass-produced aircraft, as the material enables to bring down costs by improving efficiency of molding of members.

In the medium-term management program Project AP-G 2019, launched by Toray in fiscal year 2017, the company is promoting the Green Innovation Business Expansion (GR) Project aimed at contributing to solving global environmental issues and resource and energy problems in a group-wide effort, and Toray is pursuing business expansion and market development of the carbon fiber business as one of the core businesses under the project.

While Toray already has a large number of transactions in the carbon fiber business for aerospace applications, the company was facing the challenge of further technology development in diverse fields including thermoplastic prepreg in addition to the existing thermoset prepreg and the establishment of a business base to respond to the anticipated expansion in demand in aircraft applications.
(2) Objective
TCAC, which Toray has decided to purchase, is a prepreg manufacturer with its main manufacturing bases in Europe and the U.S. and has a track record of widely supplying thermoplastic prepreg and high heat resistance thermoset resin materials. Especially, TCAC is a global leading company of carbon fiber intermediate materials using thermoplastic resins.

The acquisition is expected to generate significant synergies by combining the product lineup in which TCAC specializes with the broad range of carbon fiber as well as polymer technologies, which are Toray's strengths. Combining the two companies' distribution channels, the company can offer a wider product lineup to the customers. Toray will respond swiftly to the expansion of the market for small-sized aircraft and expand the business further for industrial use applications including automobiles in the medium- to long-term.
2. Outline of the subsidiary subject to change
(1)NameTenCate Advanced Composites Holding B.V.
(2)AddressG. van der Muelenweg 2, 7443 RE Nijverdal, The Netherlands
(3)Name of representativeFrank Johan Meurs, Frank Rutger Spaan
(4)BusinessManufacture and distribution of carbon fiber composite materials
(5)Date of establishmentSeptember 14, 2016
(6)Shareholder and shareholding ratioKoninklijke Ten Cate B.V. 100%
(7)Relationship with TorayCapital relationshipNot applicable
Business relationshipNot applicable
Personnel relationshipNot applicable
3. Outline of the company from which Toray is purchasing the share
(1)NameKoninklijke Ten Cate B.V.
(2)AddressStationstraat 11, 7607 GX Almelo, The Netherlands
(3)Name of representativeJ.H.L. Albers(CEO)
F.R. Spaan(CFO)
(4)BusinessManufacture and distribution of fiber and textile
products and composite materials
(5)Capital67 million euro
(6)Date of establishmentApril 19, 1947
(7)Net assets486 million euro (As of 31th December, 2016)
(8)Total assets894 million euro (As of 31th December, 2016)
(9)Shareholder and shareholding ratioTennessee Acquisition B.V. 100%
(10)Relationship with TorayCapital relationshipNot applicable
Business relationshipNot applicable
Personnel relationshipNot applicable
Related partiesNot applicable
4. The number shares to be purchased, purchase amount and the status of shares Toray holds in TCAC before and after the purchase
(1)The number of shares held before the transfer0
(Number of voting rights: 0)
(The ratio to the total voting rights: 0.0%)
(2)Shares to be purchased100 shares
(Number of voting rights: 100)
(3)Purchase price930 million euro
(4)The number of shares held after the transfer100 shares
(Number of voting rights: 100)
(The ratio to the total voting rights: 0.0%)
Note:The purchase price includes net debt amount in addition to the share purchase price. The purchase price will be adjusted in accordance with any adjustments stipulated in the share purchase agreement.
5. Schedule
(1)Signing of the agreementMarch 2018 (expected)
(2)Purchase of the shares2nd half of 2018 (expected)
Note:While the companies plan to sign the agreement in March 2018, it is subject to change as it is conditional upon completing the discussions with the Works Council. The date of the share purchase is planned in 2nd half of 2018, but this is also subject to change as it is conditional upon obtaining the approvals from regulatory authorities.
6. Outlook
The impact of this acquisition on Toray’s consolidated business performance has not been determined. The company will swiftly report if any matters that require disclosure are identified.
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