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LAC Agrees to KDDI's Tender Offer Toward New Co-Creation in Cybersecurity in the AI Era

―Providing network and security as a one stop service to support the development of the cybersecurity industry-

07 NOV 2024 | Press

Tokyo, November 7, 2024―LAC Co., Ltd. (hereinafter "LAC") and KDDI Corporation (hereinafter "KDDI") (hereinafter LAC and KDDI collectively referred to as the "parties") are pleased to announce that on November 7, 2024, they agreed a transaction (hereinafter the "Transaction") for a tender offer of LAC's common shares (hereinafter the "Tender Offer") that will make LAC KDDI's wholly owned subsidiary.

Through the Transaction, the parties will integrate one another's management resources and build a structure that will enable them to respond to market changes even more swiftly to maximize LAC's corporate value. The aim is also to promote the growth of the entire KDDI Group by each enhancing the other's businesses and corporate value. To respond to today's society in which communication and AI are incorporated in every industry and people's lives, KDDI's networks and LAC's security will be integrated to further promote the advancement of cybersecurity services, thereby contributing to the development of Japan's cybersecurity industry.

For further details, please read the parties' timely disclosures (in Japanese only).

1. Background and purpose

In recent years, with the emergence of new technologies such as AI, the spread of IoT and the Cloud, and the rapid expansion of teleworking, social environments concerning cybersecurity have changed markedly. Communication and AI are now in every corner of every industry and people's lives, and this has dramatically improved the levels of user-friendliness in society. However, it has also raised the danger of cyberattacks that could render entire social infrastructures dysfunctional, so cybersecurity measures that meet the needs of today's society are ever more urgently being called for.

KDDI and LAC formed a capital partnership in 2007, and since then they have been developing a close relationship by jointly developing new services to meet changing customer needs and through many collaborative projects, including those in the Cloud and IoT domains. Through the Transaction, both parties' management resources will be integrated, including LAC's extensive cybersecurity expertise and KDDI's network services, to build a structure through which customers will be provided with the optimal solutions.

2. Future initiatives by the parties

LAC's cybersecurity services and KDDI's network services will be integrated to launch new cybersecurity services as a one stop service, from consulting through to monitoring and operations.

In existing businesses, both parties' solutions will be combined and profits maximized by increasing services for customers and sales channels, unifying security services and optimizing resources. Through these initiatives, the parties will build a more effective structure to provide services in order to respond to diverse customer needs.

Furthermore, the large amounts of threat information on cybersecurity that LAC has accumulated through its services, such as its operations and monitoring services, emergency response services, and diagnosis services, will be automatically processed at advanced levels by utilizing AI technologies and data analysis technologies that are part of the KDDI Group's capabilities. Through this, the parties are aiming to create new value and improve productivity, including by developing a service that can visualize cyberattack trends by integrating data platforms and analytics platforms.

3. Overview of the Transaction

If the Tender Offer is successfully completed, a series of processes (hereinafter the "Squeeze-Out Process") will be implemented to make KDDI LAC's sole shareholder. If the Squeeze-Out Process is to be implemented, LAC's shares will be delisted through the prescribed procedures.

Method and process Tender offer of common shares (the Tender Offer)
If, upon the completion of the Tender Offer, KDDI fails to acquire all of LAC's shares in the Tender Offer, KDDI plans to implement a procedure of "Demand for Share, etc. Cash-out" or "Consolidation of Shares.".
(Planned) commencement time of the Tender Offer Late November
The period for the Tender Offer 30 business days
The tender offer price in the Tender Offer 1,160 yen per share
Number of shares to be purchased in the Tender Offer Number of shares to be purchased in the Tender Offer: 21,184,250 shares
The minimum number of shares to be purchased in the Tender Offer: 10,659,600 shares (The number of shares required to pass a special resolution at a LAC's shareholders meeting on its own, together with the existing shares held by KDDI)
The maximum number of shares to be purchased in the Tender Offer: None
Total purchase price Approximately 24.6 billion yen
Other Following the report by a special committee established by LAC, a resolution was passed at LAC's board of directors held on November 7, 2024, to (i) express its opinion in favor of the Tender Offer, and (ii) recommend that the LAC's shareholders tender their shares in the Tender Offer.

(Reference)

About LAC

LAC's purpose is "Building a Trusted Society with Reliable Technology." As a leading cybersecurity company, it will build safe and secure social infrastructure by utilizing a variety of highly sophisticated technologies and realize a society where people can support each other and be happy as digital societies become more sophisticated and complex.

LAC Co.,Ltd.
Headquarters: 2-16-1 Hirakawa-cho, Chiyoda-ku, Tokyo
Business: Security solution service, system integration service, information systems-related sales and services

About KDDI

KDDI is aiming to realize its KDDI VISION 2030, which is "The creation of a society in which anyone can make their dreams a reality, by enhancing the powers to connect." In May 2024 under its corporate business brand "KDDI BUSINESS," it launched a new business platform "WAKONX" to respond to today's new era in which AI has entered into every corner of society. KDDI supports corporate customers' business growth and the resolution of societal issues by providing AI services and solutions optimized for each industry, based on its strengths of stable and secure communication and networks.

KDDI Corporation
Headquarters: 3-10-10 Iidabashi, Chiyoda-ku, Tokyo
Business: Telecommunications

* LAC and the LAC logo are registered trademarks of LAC Co., Ltd. in Japan, and other countries.
* Other company names, organization names, product names, etc., mentioned herein are registered trademarks or trademarks of their respective owners.
* The information contained in this press release is current as of the date of publication and is subject to change without notice.