Hakuhodo DY Acquires US-Based SYPartners & Red Peak Group

Hakuhodo DY Holdings Inc. (Minato-ku, Tokyo; Hirokazu Toda, President & CEO) has created a new strategic operating unit, kyu, to ensure continuous enhancement of specialization and innovation in the Hakuhodo DY Group, something that has been identified as one of three growth drivers in the Group’s new Medium-Term Business Plan. The new unit has acquired a 100% interest in US-based companies SYPartners and Red Peak Group.

Digitalization and globalization have made marketing as a profession more complex and sophisticated—spurring innovation in both methods and approaches. To respond to these changes, the Hakuhodo DY Group has put forward, as a key driver of growth in its new Medium-Term Business Plan, the acquisition of leading service companies that offer advanced marketing methods and solutions. The new unit, kyu, will have the task of continuously enhancing expertise, specialization and innovation in the Group and driving the Group’s growth by conducting M&A principally in North America and Europe - markets that have over time produced many unique and advanced firms - as well as major Asian markets.

kyu, which will take the form of a strategic operating unit, will be positioned parallel to the Hakuhodo DY Group’s three advertising operating companies (Hakuhodo Group, Daiko Group and Yomiko Group) and integrated media company (Hakuhodo DY Media Partners Group). In addition to managing and controlling the specialized marketing service companies under its umbrella, kyu will be charged with nurturing each company’s management talent, developing their capabilities, and supporting and promoting innovation through collaboration and cooperation. The post of CEO of kyu will be formally filled by Michael Birkin on July 1, 2014.

Birkin will also assume the office of Senior Executive Corporate Officer of Hakuhodo DY Holdings Inc. on the same date.

Established in the United States in 1994, SYPartners is a firm with studios in San Francisco and New York. SYPartners Consulting has a 20-year track record of working with leaders of some of the world’s most influential companies. The firm helps CEOs and senior management build great companies by focusing on vision and strategy; culture building; and customer experiences. SYPartners has in recent years introduced SY Products – a division of SY Partners that is dedicated to creating products and services from the company’s intellectual capital. Teamworks and Unstuck (see footnote) are the first two services released under SY Products.

Red Peak Group is a specialized marketing services company established by Birkin in the US in 2009. The company currently has offices in New York, Los Angeles, Nashville, London, Rio de Janeiro and Taipei, and operates through the brands Red Peak Branding and RPMC. Red Peak Branding, which has high-level specialist expertise in the areas of design and branding, offers integrated consultation on brand strategy development; research; and naming, packaging and advertising production. RPMC offers a wide range of advanced experiential services in the world of sports and music. The firm is a global leader in sponsorship support, hospitality programs and a variety of other promotional services.

The Hakuhodo DY Group, through kyu, will continuously enhance specialization and innovation in the Group in order to realize the core mid-term strategy in the Group’s new Medium-Term Business Plan. This is: With our mission of serving as the best marketing partner for each one of our clients, the Hakuhodo DY Group stands as one of the world’s top advertising and marketing services groups. Our cutting-edge creative ideas and integrated marketing solutions create new markets, trends and movements that engage sei-katsu-sha (the term Sei-katsu-sha means more than simply a consumer of goods and services; it expresses the holistic person—an individual with a lifestyle, aspirations and dreams. The insight provides an understanding of the individual as a whole person and exposes changes in values and desires that are centralto the person) and invigorate society.

This will also contribute to the growth of our international operations and financial results over the medium term.

The impact of the acquisitions of SYPartners and Red Peak Group on the Hakuhodo DY Group’s consolidated performance in the year ending March 31, 2015 will be small relative to the Group’s size.