NEW YORK (The Deal) -- Japanese telecom and Internet company SoftBank on Thursday continued to consolidate its Japanese businesses as it focuses on international growth.
Yahoo Japan Corp., which is 43% owned by SoftBank, agreed to buy eAccess Ltd. from SoftBank for 324 billion yen ($3.2 billion). The deal is the second step in SoftBank's consolidation. EAccess is already working to swallow Willcom Inc., another Japanese business of SoftBank. Yahoo Japan will wait until that deal is complete before integrating eAccess.
All the companies are based in Tokyo.
Having started as a small software distributor in 1981, SoftBank has grown into a global phone company under the tutelage of billionaire CEO Masayoshi Son.The company is trying to offset the effects of its saturated home market and last summer paid $21.6 billion for a majority stake in Sprint Corp., the U.S. No. 3 wireless provider. SoftBank said it would book a gain of 55.7 billion yen on the sale of eAccess. It bought the company in 2012 for 180 billion yen. Just over a year ago, it sold 66.7% of the broadband provider's voting rights to a consortium of 11 companies that included Samsung Electronics Co. In Thursday's deal, Yahoo Japan will buy 99.7% of eAccess' shares but only get the one-third of the company's voting rights that remained with SoftBank. Yahoo Japan, which is 35% held by Yahoo! (YHOO - Get Report), will be able to offer customers broadband access while widening its Web hosting business with the eAccess acquisition. According to documents related to the eAccess deal with Willcom, eAccess has 4.4 million subscribers to its broadband access services while Willcom has 5.7 million hosting customers. The company said it hopes to roll out a special Y!Mobile cellular-based broadband service that will focus on Internet access but also offer voice services. "As we promote increased usage of the Internet via smartphones, we will contribute to the growth of the Internet advertising, e-commerce and digital content markets, which will result in growth in the corporate value of the Yahoo Japan group," the company said. For the year ending March 31, a combined eAccess and Willcom is expected to have 390 billion yen in revenue, resulting in 10.1 billion yen in net profit. Yahoo Japan turned to Mitsubishi UFJ Morgan Stanley Securities Co. Ltd. for financial advice and Nishimura & Asahi LPC for counsel.