Withdrawal from Quartz Business and Change of Representative Director, CEO
Tokyo – November 9, 2020 – Uzabase, Inc. (“Uzabase” or “Group”) today announces that, based on the resolution at its Board Meeting, it will withdraw from the Quartz business. All shares of US subsidiaries involved in the Quartz business will be transferred to Quartz Media Holdings, Inc. (“Quartz Media Holdings”), an entity founded with majority of voting right held by Mr. Zachary Seward, current CEO of Quartz Media, Inc. (“Quartz”).
As part of the endeavor to achieve our mission of "We guide business people to insights that change the world", in July 2018, Uzabase acquired Quartz, a global economic news media company in the United States. Following this acquisition, Uzabase actively invested in Quartz to launch a paid subscription business in addition to its existing advertisement business, and the number of paying subscribers has been steadily increasing. However, due to the COVID-19 pandemic, there has been a strong trend of corporations curbing advertisement placements, especially in the U.S. In response to this situation, in May 2020, Uzabase made the decision to restructure the Quartz organization focusing on its advertisement business. Since then, Quartz has operated its business while watching for recovery in the advertisement market but continues to underperform the plan set at the time of restructuring.
The outlook of the advertisement market in the U.S. continues to be uncertain, and the situation has made it difficult for Uzabase to achieve its target to turn the Quartz business profitable in three years, as committed at the time of acquisition. Therefore, based on its investment discipline, Uzabase has decided to withdraw from the Quartz business in order to focus the Group’s resources on the SPEEDA and NewsPicks businesses, where higher growth can be expected.
Meanwhile, it has not changed that there is high value in the Quartz brand and its readership, and its paid subscription business is growing steadily. However, following the exploration of strategic alternatives, it has been determined that transferring its shares to Quartz Media Holdings, an entity founded by current Quartz management would be the best method of execution for both entities to achieve long-term growth. Based on this decision, Quartz will be separated from the consolidated accounts of Uzabase, a publicly traded company, to operate its business independently.
As a result of this transfer, net sales are expected to decrease, while EBITDA is expected to improve significantly against the initial forecast for this fiscal year. In addition to excluding the loss-making Quartz business from consolidated accounts, impairment of goodwill and all related one-time losses (final losses incurred for withdrawal from Quartz business to be expected as approx. ¥5,810 million) will be recognized in this fiscal year. This is expected to make a major improvement in consolidated EBITDA as well as operating profits and other lines of profit from the next fiscal year.
Upon this withdrawal, Yusuke Umeda, current Representative Director and CEO (Chief Executive Officer) of Uzabase, has expressed his will to step down as Representative Director and CEO effective of December 31, 2020 in order to take his management responsibility, and the Board of Directors accepted this offer.
Umeda will remain as a part-time director from January 1, 2021 onwards to support the new management under the leadership of Yusuke Inagaki, current Representative Director and newly appointed as CEO, in developing the foundation for the future of Uzabase.
Following this transfer, Umeda is planning to act in his individual capacity to lend funds to support the operations of Quartz Media Holdings under the new ownership. Uzabase’s Board of Directors and Audit and Supervisory Committee recognize that Umeda will not receive any benefits beyond general market-level loan interests.
Regarding the Quartz Japan business, its service will continue to be provided by Quartz.
For more details, please refer to the following timely disclosure (PDF).
- Notice on Transfer of Shares of U.S. Subsidiary (Transfer of Subsidiary), Change of Subsidiary’s Corporate Name, Recognition of Extraordinary Loss, and Revision of Earnings Forecast to Accompany Withdrawal from Quartz Business
- Notice of Change of Representative Directors
Umeda will also provide a briefing on this matter directly at 2020 3rd Quarter Financial Results Briefing to be held online on November 12 at 6:00 PM JST. If you would like to attend, please register for this event using the form below.
Company Name: Uzabase, Inc.
Established: April 1, 2008
Representatives: CEO Yusuke Umeda / COO Yusuke Inagaki
Headquarters: Level 13, Tri-Seven Roppongi 7-7-7 Roppongi, Minato-ku, Tokyo 106-0032
Uzabase, Inc. (PR)