The Carlyle Group and Kyocera's aquisition of DDI Pocket agreed with KDDI

June 21, 2004

2 Min Read

TOKYO -- The Carlyle Group, Kyocera Corp. (TSE: 6971; NYSE: KYO) and KDDI Corp. (TSE: 9434) reached an agreement today whereby a consortium of Carlyle and Kyocera would acquire the business of DDI Pocket, Inc., a subsidiary of KDDI.

Under the agreement, the company that succeeds DDI Pocket's business (the "NewCo") would be owned 60% by Carlyle, 30% by Kyocera and 10% by KDDI. In order to enhance its focus in its core business, KDDI, which currently owns approximately 81% of DDI Pocket, would hold a 10% stake. Kyocera, which currently owns approximately 13% of DDI Pocket, would invest in 30% to expand its focus on PHS related products business. Carlyle would become the controlling shareholder. This acquisition assumes that, and an agreement has been reached whereby, the current management of DDI Pocket will continue its involvement in the [day to day] management of NewCo. It is also assumed that current DDI Pocket employees will remain with the business, with no employment adjustments planned, and it is our basic policy that current employee's compensation and benefits will not be worse than they are currently, for the foreseeable future. Given that the management and employees will continue in their current roles, we believe that the transaction will have no [negative] impact on existing customers and business partners of DDI Pocket.

DDI Pocket's subscribers have been increasing over the last several years in its core service of flat-rate mobile data communication services (Air H"), and DDI Pocket has been growing strongly as the leader in the mobile data communications market. Carlyle highly regards DDI Pocket's PHS business, especially DDI Pocket's medium- to long-term competitive advantage and growth potential in the corporate mobile data communications market. KDDI had been considering the best option for DDI Pocket's business. This agreement is a result of Carlyle forming a consortium with Kyocera and approaching KDDI regarding a potential investment in DDI Pocket, and KDDI's decision to accept the proposal in light of its renewed focus in its core businesses.

Carlyle Venture Partners

Kyocera Corp.

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