NEC (6701) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition targets a leading U.S. software provider in telecom and broadband, expanding reach in North America and other industries.

• Highly complementary customer bases and solutions between the acquired company, Netcracker, and the acquirer enable optimal service delivery and cross-selling.

• Enhances digital transformation capabilities and leverages both companies' technologies for global growth, including expansion into digital government and finance sectors.

• Enhances presence in North America and supports global expansion, leveraging NEC Group's technology and capital.

Financial terms and conditions

• Acquisition price is $80.7 per share, totaling $2.9 billion (approx. JPY 441.7 billion), a 17.38% premium over the prior day's share price of $68.75.

• Implied enterprise value multiple is 10.3x EV/2026 Adjusted EBITDA.

• Funded through cash on hand and new borrowings; target will become a wholly owned subsidiary via a reverse triangular merger.

Synergies and expected cost savings

• Substantial synergies expected from enhanced solution offerings, cross-selling, and expansion into new industries.

• Operational efficiencies anticipated by leveraging both companies' digital transformation capabilities and customer bases.

• Immediate and further EPS growth expected from synergies.