SOFTBANK Announces New Fund Dedicated To Building Asia’s Internet Infrastructure and Enhanced Strategic Relationship with Cisco Systems, Inc.
TOKYO – January 25, 2001 – SOFTBANK CORP. today announced the formation of a new private equity fund focused on building an infrastructure that will enable the entire Asia-Pacific region to fully realize the benefits of the Internet. Cisco Systems, Inc. will commit US$1.05 billion to the new SOFTBANK Asia Infrastructure Fund, which will be invested over several years. The Fund will be dedicated to building the core infrastructure throughout the region to energize widespread use of broadband, optical, wireless and Internet-based services and technologies. SOFTBANK will be the general partner and manager of the Fund.
“We are at the dawning of an era that will be characterized by universal use of broadband, wireless and Internet technologies,” said Masayoshi Son, President and CEO of SOFTBANK CORP. “But before many exciting applications can be implemented, we must first build the core infrastructure upon which those applications can ride. Cisco is the world’s leader in providing equipment to the data communications marketplace. SOFTBANK is the world’s leader in building successful Internet technology companies. Together, we can identify, fund and launch companies that will create this infrastructure for Asia.”
“Cisco and SOFTBANK have a long history of tackling new opportunities together and then delivering results,” said John Chambers, President and CEO, Cisco Systems, Inc. “The Internet presents us with an extraordinary opportunity. Both Cisco and SOFTBANK are dedicated to making strategic investments to further the development of the Internet in Asia and throughout the world.”
SOFTBANK Asia Infrastructure Fund will initially have offices in Tokyo and Hong Kong. The Fund will be managed by an Investment Committee, comprised of Masayoshi Son, Ron Fisher, Eric Hippeau and Gary Rieschel of SOFTBANK. Fisher is the Vice Chairman of SOFTBANK Holdings Inc. and oversees investment activities outside of Japan. Rieschel is the President of SOFTBANK Venture Capital, responsible for the private equity activities of SOFTBANK in the US. Hippeau is President of SOFTBANK International Ventures, responsible for the company’s private equity activities outside the US and Japan.
A full-time Managing Director of the Fund will be named shortly. An Operating Committee comprised of the Managing Director, Son and Rieschel will guide the operating activities of the Fund. Other limited partners will be invited to participate in the Fund.
“The opportunity before us is tremendous, as is the challenge of finding the right companies and management teams in which we will invest,” stated Son. “To fully realize the potential, we need to diversify and expand the knowledge and experience base applied to our investment decisions. Therefore, the addition of limited partners will be a key priority in the Fund’s early days.”
In a separate transaction, Cisco is buying most of SOFTBANK’s share of Cisco Systems K.K. for approximately US$275 million. In addition, Cisco will invest US$200 million in SOFTBANK CORP. through the purchase of new equity, further strengthening the strategic relationship between the two companies. The gain to SOFTBANK from the sale of its holding in Cisco Systems K.K. will be approximately US$260 million
“This is one of the most significant ventures SOFTBANK has undertaken to date,” concluded Son. “We have had a close and successful relationship with Cisco for many years. We know each other very well and know that we have unique synergies in working together. Our vision for the SOFTBANK Asia Infrastructure Fund is exciting and powerful.”
Details on New Equity Details of the newly issued shares Purpose of the allocation of new equity Decision of issuing price
SOFTBANK CORP. (Tokyo Stock Exchange: 9984) is one of the world’s Internet leaders. Through its ownership positions in more than 600 Internet companies and its unique, global approach to building Internet enterprises, it is able to realize unprecedented synergies among its group of companies. In the US, SOFTBANK is the largest shareholder in leading Internet companies including Yahoo!, E*TRADE, and CNET. In Japan, SOFTBANK’s activities encompass online financial services, e-commerce, online media and marketing services, e-business solutions, and joint ventures with industry leaders including Microsoft, Cisco, Yahoo!, and the National Association of Securities Dealers (NASD). SOFTBANK is building Internet ventures in Continental Europe and the UK, Greater China, Latin America, and Korea; and has joined with the World Bank to help bridge the digital divide in emerging markets worldwide.
Details on New Equity
Details regarding the allocation of new equity to Cisco Systems, Inc. to strengthen the companies’ strategic relationships were decided at a Board Meeting on January 25 as follows:
1. Details of the newly issued shares
- (1) newly issued shares 5,565,900 common shares
- (2) issuing price 4,197 yen per share
- (3) total value of issued shares US$200 million 23.36 billion yen
2. Purpose of the allocation of new equity
SOFTBANK plans to develop several businesses in the promising broadband, wireless, and internet-related services and technology sectors and related content with Cisco Systems as a comprehensive strategic partner.
Cisco Systems will hold 1.65% of SOFTBANK CORP. shares. This will allow a closer relationship between the company and Cisco Systems, enhancing smooth and strong business development capabilities.
3. Decision of issuing price
It was agreed that the issuing price will be the closing average (of the 20 business days between December 22, 2000 and January 24, 2001) of ordinary transactions of common shares in SOFTBANK CORP. traded on the Tokyo Stock Exchange.
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