Notice Subsidiary’s Execution of Asset Purchase Agreement for Purchase of the TippingPoint Business of Hewlett-Packard Company

October 21, 2015

Trend Micro, Inc.
Eva Chen, Representative Director, President,
Chief Executive Officer
First Section of the Tokyo Stock Exchange
Code: 4704
Contact: Mahendra Negi
Telephone: +813-5334-4899

Trend Micro group hereby announces that today (October 20, 2015 in US) it has reached an agreement with Hewlett-Packard Company (hereinafter “HP”) to acquire the TippingPoint business of HP.

1. The reason for transaction

Trend Micro group signed a definitive agreement with HP to acquire TippingPoint business including next-generation intrusion prevention systems (NGIPS) and related network security solutions. This acquisition positions Trend Micro as the go-to enterprise security provider of dynamic threat defence solutions spanning endpoints, network, data centre and the cloud.
In addition to proven network security, this agreement includes the threat insight and expertise of Tipping Point’s Digital Vaccine LABS (DVLABS ), that provides real-time threat intelligence with innovative security filters to analyse vulnerabilities and exploits. Another benefit is the Initiative for Zero Day Attack, which has responsibly disclosed more zero-day vulnerabilities than all competitors combined through the diligence and expertise of an extensive community of researchers.
Trend Micro group will provide value-added high quality security services and solutions through these unique expertise and abilities which will work in concert with the expansive resources of the Trend Micro Smart Protection Network and threat research teams to help ensure market leading detection rates.

2. Outline of Business to be transferred

(1) Details of Business to be transferred
Assets and Liabilities;
Exclusively used in the TippingPoint business including employees, customer contracts, intellectual property, and fixed assets, etc.

(2) Details of Business to be transferred for the last twelve months ended September 30, 2015
Net Sales:                           169 million USD (20.3 billion yen / 1 USD=120 JPY)
Operating Income:               45 million USD ( 5.4 billion yen / 1 USD=120JPY)
Note: The figures are provided by HP (unaudited)

(3) Amount of assets and liabilities to be transferred (as of July 31, 2015)
Assets:   28 million USD, Liabilities: 77 million USD
Note: The figures are provided by HP (unaudited)

(4) Purchase Price and Settlement
Purchase Price:    Approximately 300 million USD (approximately 36 billion yen / 1 USD=120 JPY)
Settlement:            Cash

3. Overview of Hewlett-Packard Company

(1) Trade Name:                               Hewlett-Packard Company

(2) Location:                                      3000 Hanover Street Palo Alto, CA 94304 United States

(3) Chief Executive Officer:             Margaret C. Whitman

(4) Business Description:
            Total IT related provider of products, technologies, software, solutions and services (FYE 10/31).

(5) Common Stock:                         18 million USD (as of October 31, 2014)

(6) Date of establishment:              Year of 1947

(7) Total stockholders’ equity:        27,127 million USD (as of October 31, 2014)

(8) Total liabilities and stockholders’ equity:    103,206 million USD (as of October 31, 2014)

(9) Major shareholders and the ratios of shares held
      Dodge & Cox                                          10.4% (as of July 31, 2015)
      BlackRock, Inc.                                         5.8% (as of June 30, 2015)
      The Vanguard Group                               5.6% (as of June 30, 2015)

(10) Relationships between listed company and such company
     -Capital relationship:                                         There are no applicable items.
     -Personnel relationship:                                   There are no applicable items.
     -Transaction relationship:                                There is no significant transaction relationship.
     -Applicable situation of related parties:         There are no applicable items.

4. Overview of Trend Micro Inc.

(1) Company Name:                                      Trend Micro Incorporated

(2) Location:                                                    225 East John Carpenter Freeway, Suite 1500, Irving, TX 75062 USA

(3) Title and name of representative:          Wael Mohamed (President)

(4) Business Description:
            Developing and supplying total information security software, solutions, and services

(5) Common Stock:                                        477 thousand USD (as of December 31, 2014)

(6) Relationship between listed company and this company:
            Wholly owned by listed company.

5. Schedule Date

1) Date of execution of Asset Purchase Agreement:   October 20, 2015 in US (October 21, 2015 in Japan)

(2) Estimated date of completion of Transaction:         Target 2015 Q4, subject to completion of regulatory review requirements.

6. Summary of Accounting Procedure

For the purpose of accounting for business combinations, this transaction is expected to be treated as an acquisition. Goodwill is expected to be approximately 300 million USD level (approximately 36 billion yen level / 1 USD=120 JPY)

7. Financial Impact

The transaction is expected to have no significant impact on Trend Micro group's financial performance for the fiscal year ending December 31, 2015. If we found through our calculation conducted from time to time, Trend Micro group will make a revision of the earnings projection immediately on a timely basis in accordance with the rules of the Tokyo Stock Exchange upon determination of future details.

Regarding this impact to FY 2016, Trend Micro group schedules to announce consolidated business outlook for the fiscal year ending December 31, 2016 on announcement of business results.

 

(Reference) financial outlook for FY2015 and result for FY2014


Net Sales Operating Income Ordinary Income Net Revenue  
Outlook for FY2015
(January 1-December 31, 2015)
123,100 34,200 36,600
22,600
Result for FY2014
(January 1-December 31, 2014)
115,205 33,652 35,992 22,303