Notice Regarding the Acquisition of Shares in Ai Company Co., Ltd. and Its Four Subsidiaries, Making Them Subsidiaries, and the Disposal of Treasury Shares by Third-Party Allotment as Consideration for the Acquisition | TOSEI CORPORATION (8923) timely disclosure

Worth reading

61In focus

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Direction

Mixed performance

Direction inferred from the company’s description.

Scale

1199950000

Yen (subscription payment for the disposal of treasury shares)

Wording

Conditional

How definitive the wording is.

This transaction

This share acquisition (making the companies subsidiaries) and this disposal of treasury shares

CounterpartyDeguchi Hirotoshi (出口博俊), Employee Shareholding Association (its members after dissolution)

Disclosing companyTOSEI CORPORATION

株式会社アイ・カンパニー, 株式会社プリンセスホールディングス, 株式会社プリンセススクゥエアー, 株式会社ジー・ピー・アセット, 株式会社レッツクリエイションVoting rights ownership percentageNumber of shares acquired 株式会社アイ・カンパニー: 100 shares (100 voting rights) 株式会社プリンセスホールディングス: 1,629 shares (1,629 voting rights)

The voting-rights ratio is the share of the votes exercisable at a shareholders’ meeting that will be held after this transaction.

TimelineThe spacing between the points is proportional to the actual number of days.

Target company

Real estate leasing, management, ownership and operation Ownership and operation of securities Consulting on asset management and administration Business management consulting Studio rental business, Management and operation of securities Real estate leasing and management, Real estate leasing, management, sales and brokerage, Real estate leasing, management, sales and brokerage, Real estate leasing, management, sales and brokerage

Location Chuo-ku, Tokyo, Shibuya-ku, Tokyo, Shibuya-ku, Tokyo, Shibuya-ku, Tokyo, Minato-ku, TokyoShare capital 株式会社アイ・カンパニー: ¥5 million, 株式会社プリンセスホールディングス: ¥5 million, Three subsidiaries: Not disclosedDate of incorporation 株式会社アイ・カンパニー: 13 December 2013, 株式会社プリンセスホールディングス: 3 July 2017, Three subsidiaries: Not disclosed

Net Sales株式会社アイ・カンパニー: ¥82 million (fiscal year ended September 2020), 株式会社プリンセスホールディングス: ¥7,491 million (fiscal year ended June 2020)

Operating profit株式会社アイ・カンパニー: ¥60 million (fiscal year ended September 2020), 株式会社プリンセスホールディングス: ¥626 million (fiscal year ended June 2020)

Net income for the current fiscal year株式会社アイ・カンパニー: ¥78 million (fiscal year ended September 2020), 株式会社プリンセスホールディングス: ¥547 million (fiscal year ended June 2020)

Net assets株式会社アイ・カンパニー: ¥447 million (fiscal year ended September 2020), 株式会社プリンセスホールディングス: ¥6,990 million (fiscal year ended June 2020)

Consideration and expenses

Acquisition priceIn light of the confidentiality obligations under the share transfer agreement relating to this share acquisition, the consideration is not disclosed at the request of the other party.

Type of ConsiderationA combination of cash and the disposal of treasury shares, with an in-kind contribution of shares in 株式会社アイ・カンパニー serving as the subscription consideration

Funding arrangementsThe consideration for the acquisition of shares in 株式会社アイ・カンパニー will comprise cash and the disposal of treasury shares through an in-kind contribution of 27 common shares in 株式会社アイ・カンパニー. No cash payment will be made for the disposal of treasury shares.

Impact on Business Performance

The impact on results for the fiscal year ending November 2021 will be minor. The disposal of treasury shares will have no impact on consolidated results.

Procedures and assumptions

Valuation methodologyComparable company analysis, the discounted cash flow method (DCF), and the adjusted net asset value method. The actual valuation was based on the DCF method.

Independent valuation institution株式会社 AGS コンサルティング

Conditions Precedent to ExecutionThe disposal of treasury shares is subject to the effectiveness of a notification under the Financial Instruments and Exchange Act. The Employee Shareholding Association is scheduled to dissolve by 30 September 2021. If it is dissolved, a share transfer agreement will be entered into with its members.

Management structure after acquisitionThe Princess Group is scheduled to become a consolidated subsidiary of トーセイ. Deguchi Hirotoshi (出口博俊) will continue managing the Princess Group, while トーセイ will dispatch executives and other personnel to share expertise. Changes to the corporate names and the treatment of employees are Not disclosed.

This transaction
Item	Details
Transaction name	This share acquisition (making the companies subsidiaries) and this disposal of treasury shares
Counterparty name	Deguchi Hirotoshi (出口博俊), Employee Shareholding Association (its members after dissolution)
Name of the Subject Company	株式会社アイ・カンパニー, 株式会社プリンセスホールディングス, 株式会社プリンセススクゥエアー, 株式会社ジー・ピー・アセット, 株式会社レッツクリエイション
Business Description of the Subject Company	Real estate leasing, management, ownership and operation Ownership and operation of securities Consulting on asset management and administration Business management consulting Studio rental business, Management and operation of securities Real estate leasing and management, Real estate leasing, management, sales and brokerage, Real estate leasing, management, sales and brokerage, Real estate leasing, management, sales and brokerage
Location of the Subject Company	Chuo-ku, Tokyo, Shibuya-ku, Tokyo, Shibuya-ku, Tokyo, Shibuya-ku, Tokyo, Minato-ku, Tokyo
Capital Stock of the Subject Company	株式会社アイ・カンパニー: ¥5 million, 株式会社プリンセスホールディングス: ¥5 million, Three subsidiaries: Not disclosed
Date of Establishment of the Subject Company	株式会社アイ・カンパニー: 13 December 2013, 株式会社プリンセスホールディングス: 3 July 2017, Three subsidiaries: Not disclosed
Net Sales of the Subject Company	株式会社アイ・カンパニー: ¥82 million (fiscal year ended September 2020), 株式会社プリンセスホールディングス: ¥7,491 million (fiscal year ended June 2020)
Operating Profit of the Subject Company	株式会社アイ・カンパニー: ¥60 million (fiscal year ended September 2020), 株式会社プリンセスホールディングス: ¥626 million (fiscal year ended June 2020)
Net Income of the Subject Company	株式会社アイ・カンパニー: ¥78 million (fiscal year ended September 2020), 株式会社プリンセスホールディングス: ¥547 million (fiscal year ended June 2020)
Net Assets of the Subject Company	株式会社アイ・カンパニー: ¥447 million (fiscal year ended September 2020), 株式会社プリンセスホールディングス: ¥6,990 million (fiscal year ended June 2020)
Acquisition price	In light of the confidentiality obligations under the share transfer agreement relating to this share acquisition, the consideration is not disclosed at the request of the other party.
Type of Consideration	A combination of cash and the disposal of treasury shares, with an in-kind contribution of shares in 株式会社アイ・カンパニー serving as the subscription consideration
Number of shares acquired	株式会社アイ・カンパニー: 100 shares (100 voting rights) 株式会社プリンセスホールディングス: 1,629 shares (1,629 voting rights)
Voting rights ownership percentage	Before 株式会社アイ・カンパニー: 0%; 株式会社プリンセスホールディングス: 0% → after 株式会社アイ・カンパニー: 100%; 株式会社プリンセスホールディングス: 100%
Funding arrangements	The consideration for the acquisition of shares in 株式会社アイ・カンパニー will comprise cash and the disposal of treasury shares through an in-kind contribution of 27 common shares in 株式会社アイ・カンパニー. No cash payment will be made for the disposal of treasury shares.
Impact on Business Performance	The impact on results for the fiscal year ending November 2021 will be minor. The disposal of treasury shares will have no impact on consolidated results.
Date of board resolution	25 August 2021
Contract Date	25 August 2021
Execution Date / Effective Date	30 September 2021 (scheduled)
Valuation methodology	Comparable company analysis, the discounted cash flow method (DCF), and the adjusted net asset value method. The actual valuation was based on the DCF method.
Independent valuation institution	株式会社 AGS コンサルティング
Conditions Precedent to Execution	The disposal of treasury shares is subject to the effectiveness of a notification under the Financial Instruments and Exchange Act. The Employee Shareholding Association is scheduled to dissolve by 30 September 2021. If it is dissolved, a share transfer agreement will be entered into with its members.
Management structure after acquisition	The Princess Group is scheduled to become a consolidated subsidiary of トーセイ. Deguchi Hirotoshi (出口博俊) will continue managing the Princess Group, while トーセイ will dispatch executives and other personnel to share expertise. Changes to the corporate names and the treatment of employees are Not disclosed.

Items this document does not state (8)

Expenses other than the acquisition priceMerger ratio/share exchange ratioTender offer priceMinimum number of shares to be purchasedTender offer periodGoodwill amountAmount of extraordinary income (loss)Special Committee

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

The transaction will bring the new business area of acquiring, renovating and reselling used condominium units into the business, while using トーセイ's expertise in real estate revitalization, development capabilities and financial resources to enhance asset value and efficiency, expand its product lineup, and achieve economies of scale and geographic expansion in its existing businesses. Other reasons include having Deguchi Hirotoshi (出口博俊) hold shares in トーセイ and continue managing the Princess Group, as well as dispatching executives from トーセイ to share expertise.

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