The Company believes that each of Kinetek and Avtron has a solid financial base with high-margin operations. When making the decisions to acquire Kinetek and Avtron, the Company considered synergy effects that it expected between the Company's existing business operations and the operations of Kinetek and Avtron to be a particularly important factor. Through the contemplated acquisitions of Kinetek and Avtron, the Company will seek to improve the profitability of the ACIM business and enhance the corporate value of each of the acquired companies.Following the series of acquisitions completed and currently contemplated pursuant to its strategy to strengthen its commercial/industrial motor business as discussed above, the Company expects that it will be in a better position to achieve its aspiration of "profit margins of 15% or more in all business areas" with respect to the ACIM business in 2015. Once the contemplated acquisitions of Kinetek and Avtron are completed as currently planned, the initial ("building the foundation for growth") step of the Company's strategy to strengthen its commercial/industrial motor business will be completed, and the Company plans to shift its strategic focus to achieving synergy among the Company and the acquired operations and improving profitability. 2. Objective of acquiring Kinetek — Aiming to become a leading player in the commercial motor market Kinetek conducts its commercial motor business on a global basis. Kinetek occupies a leading position in various markets for commercial motors used in such end-products as elevators/escalators, commercial food refrigerators, floor care equipment, golf and utility vehicles, material handling vehicles, and aerial lifts. By combining Kinetek's commercial motor business with the Company's market-leading commercial motor business, particularly in the market for motors used in air-conditioning equipment, the Company expects to expand its product offerings of commercial motors by more than double and to be in a better position to seek to become a leading player in a wider global commercial motor market. Kinetek's strength lies in its design capabilities to meet customers' specifications (80% of its products are custom-made) and its ability to deliver value-added solutions to customers. The Company expects that Kinetek's design capabilities and value-added solutions will be offered to the existing customers of the Nidec Group.