Worth reading
70In focus
0–100. This measures how worthwhile something is to read, not how good or bad the company is.Direction
Improvement
Direction inferred from the company’s description.Scale
2000000
The Company's common sharesWording
Avoiding a definitive answer
How definitive the wording is.This transaction
Name of transactionCounterpartyKomuro Tetsuya (小室哲哉)
Disclosing companyTHE WHY HOW DO COMPANY,Inc.
TimelineThe spacing between the points is proportional to the actual number of days.
Target company
Production and sale of music, video and other media, including records; management of intellectual property rights, including copyrights, neighboring rights, trademark rights and design rights; entertainment business and other activities
Location Minato-ku, TokyoShare capital ¥5 millionDate of incorporation July 2009
Net Sales¥106 million (fiscal year ending April 2026, 8 months)
Operating profitLoss of ¥2 million (fiscal year ending April 2026, 8 months)
Net income for the current fiscal yearNet loss of ¥4 million (fiscal year ending April 2026, 8 months)
Net assets¥103 million (fiscal year ending April 2026)
Consideration and expenses
Acquisition pricenot disclosed (no cash consideration stated; consideration consists of 2,000,000 common shares of the Company)
Type of ConsiderationShares (2,000,000 of the Company's common shares)
Merger ratio/share exchange ratioCompany (share exchange wholly owning parent company) 1 : Pavilions株式会社 (share exchange wholly owned subsidiary) 133,333⅓. The Company will issue 133,333⅓ of its common shares for each common share of Pavilions株式会社
Funding arrangementsnot disclosed (consideration consists solely of the Company's common shares, and no funding arrangements for the acquisition are stated)
Goodwill amountNot expected to arise (no amortization period stated)
Goodwill is the amount paid in excess of the acquired company's net assets.Impact on Business Performance
All of Pavilions株式会社's net income previously attributable to non-controlling interests is expected to become attributable to owners of the parent, and the transaction is also expected to affect the group's overall tax burden. The amounts of the impact and the impact on capital surplus are currently being calculated. If a material impact on earnings becomes apparent, it will be disclosed promptly.
Procedures and assumptions
Valuation methodologyThe Company used the market price method, while Pavilions株式会社 used the discounted cash flow method. The DCF method used, among other assumptions, business plans for the fiscal years ending April 2027 through April 2031, a discount rate of 14.9%, and a perpetual growth rate of 0.0%.
Independent valuation institution株式会社ユニヴィスコンサルティング
Conditions Precedent to ExecutionApproval at a Pavilions株式会社 shareholders meeting (予定 for 17 September 2026). No shareholder approval is required for the Company because this is a simplified share exchange.
Management structure after acquisitionThere will be no changes to the Company's corporate name, head office location, representative, business activities or fiscal year-end. Komuro Tetsuya (小室哲哉) is expected to continue serving as representative director of Pavilions株式会社 after the share exchange. Employee treatment: not disclosed
| Item | Details |
|---|---|
| Transaction name | Name of transaction |
| Counterparty name | Komuro Tetsuya (小室哲哉) |
| Name of the Subject Company | Pavilions株式会社 |
| Business Description of the Subject Company | Production and sale of music, video and other media, including records; management of intellectual property rights, including copyrights, neighboring rights, trademark rights and design rights; entertainment business and other activities |
| Location of the Subject Company | Minato-ku, Tokyo |
| Capital Stock of the Subject Company | ¥5 million |
| Date of Establishment of the Subject Company | July 2009 |
| Net Sales of the Subject Company | ¥106 million (fiscal year ending April 2026, 8 months) |
| Operating Profit of the Subject Company | Loss of ¥2 million (fiscal year ending April 2026, 8 months) |
| Net Income of the Subject Company | Net loss of ¥4 million (fiscal year ending April 2026, 8 months) |
| Net Assets of the Subject Company | ¥103 million (fiscal year ending April 2026) |
| Acquisition price | not disclosed (no cash consideration stated; consideration consists of 2,000,000 common shares of the Company) |
| Type of Consideration | Shares (2,000,000 of the Company's common shares) |
| Merger ratio/share exchange ratio | Company (share exchange wholly owning parent company) 1 : Pavilions株式会社 (share exchange wholly owned subsidiary) 133,333⅓. The Company will issue 133,333⅓ of its common shares for each common share of Pavilions株式会社 |
| Number of shares acquired | 15 common shares of Pavilions株式会社 (15.0% voting rights ownership; number of voting rights not disclosed) |
| Voting rights ownership percentage | Before 85.0% → after Wholly owned subsidiary (ownership percentage not stated) |
| Funding arrangements | not disclosed (consideration consists solely of the Company's common shares, and no funding arrangements for the acquisition are stated) |
| Goodwill amount | Not expected to arise (no amortization period stated) |
| Impact on Business Performance | All of Pavilions株式会社's net income previously attributable to non-controlling interests is expected to become attributable to owners of the parent, and the transaction is also expected to affect the group's overall tax burden. The amounts of the impact and the impact on capital surplus are currently being calculated. If a material impact on earnings becomes apparent, it will be disclosed promptly. |
| Date of board resolution | 31 July 2026 |
| Contract Date | 31 July 2026 |
| Execution Date / Effective Date | 18 September 2026 (scheduled) |
| Valuation methodology | The Company used the market price method, while Pavilions株式会社 used the discounted cash flow method. The DCF method used, among other assumptions, business plans for the fiscal years ending April 2027 through April 2031, a discount rate of 14.9%, and a perpetual growth rate of 0.0%. |
| Independent valuation institution | 株式会社ユニヴィスコンサルティング |
| Conditions Precedent to Execution | Approval at a Pavilions株式会社 shareholders meeting (予定 for 17 September 2026). No shareholder approval is required for the Company because this is a simplified share exchange. |
| Management structure after acquisition | There will be no changes to the Company's corporate name, head office location, representative, business activities or fiscal year-end. Komuro Tetsuya (小室哲哉) is expected to continue serving as representative director of Pavilions株式会社 after the share exchange. Employee treatment: not disclosed |
Items this document does not state (6)
Expenses other than the acquisition priceTender offer priceMinimum number of shares to be purchasedTender offer periodAmount of extraordinary income (loss)Special Committee
These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.
The reasons the company gives
The company's own explanation, not something inferred from the numbers.By making Pavilions株式会社 a wholly owned subsidiary, the Company aims to advance integrated group management, accelerate decision-making, enable more agile business operations, and strengthen its entertainment business. Another stated reason is to establish a structure under which Komuro Tetsuya (小室哲哉) can work to enhance corporate value over the medium to long term both as a manager and as a shareholder.
How to read this page
This is not the documentKomori reads the disclosure the company filed and writes this summary. Figures are as stated by the company and are not audited.
Weight is not a verdictIt measures how much this changes what the company had already told the market. It is not a view on the shares.
Corrections happenIf the company reissues this disclosure, the page is rebuilt from the corrected version and the revision number moves up.