IHI Corporation (Location: Koto Ward, Tokyo Prefecture; President: Tsugio Mitsuoka; hereinafter referred to as "IHI") has formulated its "IHI Group Management Policy 2016," newly incorporated portfolio management in order to strengthen its earnings base, and is working to focus and select its businesses. To accelerate these efforts, reorganization of the IHI Group's businesses is being examined, and recently a contract was concluded to transfer the fire fighting equipment business of IHI Shibaura Machinery Corporation (Location: Matsumoto city, Nagano Prefecture; President: Seiichi Daita, referred to below as "ISM"), a wholly owned subsidiary of IHI, to a company established by New Horizon II Investment Limited Partnership (referred to below as "NH-2") managed and operated by New Horizon Capital Co., Ltd. (Location: Minato Ward; Tokyo, President: Yasushi Ando; referred to below as "NHC").

The fire fighting equipment business of ISM began with the sale of firefighting pumps at the same time ISM was established in 1950, and at present, the business is a leader in the domestic fire fighting equipment market, handling not only firefighting pumps, but also small fire trucks, security pumps, fully-automatic fire extinguishing systems, and other products. The company has expanded its business into overseas markets, primarily in East Asia and Southeast Asia, using its high product quality as a strength, and has proposed attractive products and services to customers inside and outside of Japan.

On the other hand, the main customers of the fire fighting pump industry in Japan are government agencies, local governments, fire brigades and similar organizations, and ISM has developed its business based on long-term and stable business relationships. Overseas, there is a social desire for dissemination of firefighting and fire fighting equipment, particularly in the developing countries of Asia, and this is a market with potential for large demand in the future. Also, Japanese firefighting and fire fighting equipment has an excellent reputation in this market, and it is believed that strengthening overseas sales promotion may drive business growth. Thus, various companies are actively working to strengthen business development.

Under these conditions, IHI and ISM have examined business structures to boost growth above previous levels in the fire fighting equipment business, and as a result, recently reached the conclusion that the optimal approach is to further strengthen business competitiveness by maximally exploiting the extensive track record and knowledge of NHC for supporting business growth. The new company will be established in Matsumoto city, and manufacturing will continue as before at the current Matsumoto Factory of ISM.

NHC recently concluded a contract to take over ISM's fire fighting equipment business, and is an operating company for an independent PE fund with a track record of more than 15 years in total since its founding. The firm has an extensive track record of growth support, business takeover, and business reorganization, and has an established reputation of achieving sustained corporate growth and substantial improvement in competitiveness, by solving social problems through business while pursuing profitability.

Going forward, the ISM fire fighting equipment business will be wholly owned by NH-2, and in that role the company will continue manufacturing and sales to customers of products bringing together the company's strengths in technology and manufacturing. Also, based on the management know-how of NHC, the firm will provide products and services at a level greater than ever before, not only domestically but also globally, by striving for active expansion into the markets of developing countries in Asia, where growth can be expected, and strengthening business competitiveness.

In the future, IHI will continue actively promoting measures based on the "Group Management Policy 2016," and thereby work to strengthen earnings and improve competitiveness.

The date of transfer for this transaction is expected to be at the end of June 2017.

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