Buying a regional computing centre, and spinning off its own operations arm (2001)

Buying back the business the founders had ruled out

In a 1988 lecture, President Daito Kiyonari described his company by pointing, deliberately, at two things it did not do: it did not rent out time on a mainframe, and it was fundamentally unlike a staffing agency. Thirteen years later the company took an 81.6% stake in a computing centre that ran monthly batch processing for local governments, and in the same month carved its own operations-management division out into a separate company. This was neither diversification nor scale for its own sake. It was a decision to buy back, from outside, the very line of work the founding generation had ruled out as a point of pride.

There is little in the record, though, to say the move worked. From the year after the investment, consolidated revenue fell by $49.2M (¥6bn) over two years and ordinary profit shrank by nearly half; nothing in the figures of the time shows FSK putting a floor under the decline. And yet the company spun off that same month was absorbed back into the parent and gone by 2005, while FSK alone is still there a quarter of a century later, an 82.2% subsidiary. Whether an acquisition survives may be settled less by the rationale given when it is bought than by whether there is work to hand it afterwards.