December 22, 2016
To whom it may concern
Company: Oisix Inc.
Representative: Kohey Takashima, President and CEO(Code 3182, Mothers Section of Tokyo Stock Exchange)
Contact: Hajime Yamanaka, Corporate
Officer, Administration(TEL: 03 5447 2688)

Notice regarding the Management Integration (Merger) of Oisix Inc. and DAICHI WO MAMORU KAI Co., Ltd.
Oisix Inc. (hereafter Oisix) and DAICHI WO MAMORU KAI Co., Ltd. (hereafter ‘DWMK’), having resolved today atmeetings of the Board of Directors of both companies to carry out a share exchange (hereafter ‘the Share Exchange’)
towards an management integration through merger (hereafter ‘the Merger’) slated for Autumn 2017, have entered intoa share exchange agreement (hereafter ‘the Share Exchange Agreement’), as outlined below.
Note: The Share Exchange is planned to take place following shareholder approval at extraordinary general meetings ofboth companies that are due to take place before the last day of February 2017.
Going forward, in a spirit of equality, both companies will work towards the Merger through concrete consultation andstudy.
NOTICE
1.

Purpose of the Merger
In recent years, amid sales channel diversification as a result of ever-greater smart phone penetration and the useof SNS, etc., the E-Commerce (EC) industry has seen consumer needs also diversify, along with changes in lifestyleand values – partly due to greater health-consciousness and an increase in double-income households. Moreover,in Oisix’s main business domain – food with a focus on safety, consumers continue to be very aware of safety andreliability.
Against the backdrop of this sort of environment, since its establishment in 2000 and in accordance with its
corporate philosophy “Fabulous Food. To as many people as possible,” Oisix has worked to establish its own identity
and competitive superiority in the growth EC market by providing a food delivery service of high quality, high valueadded ingredients such as safe and reliable foodstuffs and products that meet customers’ time-shortening needs
because they can be cooked in a short time.
Meanwhile, DWMK has been operating for over 40 years as a trailblazer in the field of delivery to subscribers oforganic and pesticide-free foodstuffs, and has a contracted-producer network of around 2,500 individuals who
supply agricultural, livestock and marine produce, and additive-free processed foods, etc., with a focus on safety andreliability.
When it comes to ensuring food safety, both companies have established standards for the production andhandling of their products, in addition to which they share a philosophy to provide consumers only with what isdelicious.
Given these circumstances, since around October 2016 both companies have had occasion to meet, holddiscussions about and deliberate the Merger, arriving at the conclusion that integrating their management resources
and forming a new group would be an effective way for Oisix and DWMK, two companies that share a main business1

of delivering to the home high quality and high value-added ingredients with a focus on safety, to expand the market
and make an even greater contribution to a society that is better through food.
Because there are differences in the average age, etc., of the two companies’ respective home-delivery customer
base, it is foreseen that the Merger will enable expansion through new customer segments while retaining existingcustomers, and that it will be possible as a group to be more competitive in the market.
At the same time, streamlining those parts of the supply chain, from procurement to sales, that the twocompanies have in common is expected to translate into an increase in profit margins, which we think will lead to an
improvement in both our enterprise values.
Through the Merger, both companies will consolidate their management resources with the objective of
becoming a business that can make an even bigger contribution to consumers, producers, customers, shareholders,
employees and society.
In order to maximize synergy from the Merger, the plan going forward is for a Preparatory Merger Committee tobe set up in each company, to create a robust business platform that makes use of both parties’ marketing knowhow
and delivery and producer networks to realise expansion centered around the home delivery business and to win
growth opportunities. Furthermore, as regards the home-delivery business after the Merger, the policy is tocontinue to develop business through both the existing brands, Oisix and DAICHI Delivery. Both companies will
polish as never before the brands that they have built up, and discuss in the Preparatory Merger Committee
concrete measures to comprehensively deliver ‘an enterprise that promises a reliably greater and healthier variety ofmeals and ingredients.’
Management structure following the Merger will be decided through consultation between the two companies,
in the context of the merger’s objective and effect. Please note that the plan for board directors, with the objectiveof maximizing the merger’s effect, will be lead by Mr. Fujita, the president of DWMK acting as Chairman, and Mr.
Takashima, the president of Oisix, acting as the President of the merged entity.
2.

Outline of the Share Exchange(1)

Share Exchange Schedule (dates)
Board Meeting decision to enter into the ShareThursday, December 22, 2016.

Exchange Agreement (both companies)
Entry into the Share Exchange Agreement

Thursday, December 22, 2016.

(both companies)
Notice of Extraordinary General Shareholders’ Meeting

Monday, December 26, 2016 (TBC)

Record Date (both companies)
Record Date of Extraordinary Shareholders’ General

Tuesday, January 10, 2017 (TBC)

Meeting (both companies)
General Meeting for shareholder approval of the ShareThursday, February 23, 2017 (TBC)

Exchange (DWMK)
General Meeting for shareholder approval of the ShareMonday, February 27, 2017 (TBC)

Exchange (Oisix)
Effective date of the Share Exchange

Friday, March 31, 2017 (TBC)(Note 1) If required by progress in the Share Exchange procedure both parties may agree for the schedule
above to be changed.
(Note 2) The Share Exchange enters into force on condition that both Oisix and DWMK obtain a General
Meeting Resolution approving the Share Exchange.
(2)

Share Exchange Method
The Share Exchange shall temporarily mean that in anticipation of the Merger through integration in
Autumn 2017, Oisix will be the share exchange full parent company and DWMK the share exchange wholly2

owned subsidiary.
It is assumed that the Share Exchange will be approved at the Extraordinary General Meeting of DWMK
shareholders slated for February 23, 2017 and at the Extraordinary General Meeting of Oisix shareholders
slated for February 27, 2017.
Going forward, in a spirit of equality, both companies will work towards the Merger through concrete
consultation and study. Details shall be swiftly announced as they emerge.
(3)

Details of Allocations pertaining to the Share Exchange
Oisix

DWMK

(share exchange full parent)(share exchange 100%

subsidiary)
Allocation pertaining to the Share

1

261

Exchange
Shares to be granted through the Stock

Ordinary shares : 2,026,665 (TBC)

Exchange(Note 1) Allocation rate of shares pertaining to the Share Exchange
261 Oisix ordinary shares to be allocated for each DWMK ordinary share.
(Note 2) Number of shares, etc., to be granted to Oisix through the Share Exchange
At the point in time (hereafter ‘time of record’) immediately before Oisix is to acquire all of DWMK’sshares outstanding through the Share Exchange, Oisix plans to grant all DWMK shareholders, inexchange for the DWMK shares that they hold, the number of ordinary shares in Oisix that is arrived atby multiplying their DWMK shareholding by 261. As regards the Share Exchange granting of ordinary
shares in Oisix, when the time comes the Company plans to allocate all of the treasury stock it holds (no.
treasury stock shares held as at September 30, 2016: 260,042), and for the balance, to issue new
ordinary shares. Whereas, DWMK will, in accordance with a resolution by its Board of Directors at a
Board meeting to be held by the day before the Share Exchange enters into force, cancel all of thetreasury stock held up to the time of record (includes the treasury stock acquired by DWMK throughwritten demands for purchase by those shareholders who are against the Share Exchange).

There isalso a possibility that acquisition, cancellation, etc., of treasury stock by DWMK will result in volatility inthe number of shares to be granted through the Share Exchange.
(Note 3) Treatment of odd-lot shares
All those DWMK shareholders for whom the Share Exchange means holding odd lots of (less than100) Oisix shares shall receive a dividend that equates to the number of shares they hold, in the eventthat Oisix pays out an ordinary dividend, the record date being a day after the date on which the Shareexchange enters into force. But they cannot sell the odd-lots they hold on the Tokyo Stock Exchange.
All those shareholders who hold odd-lots of Oisix shares can, however, after the date on which the
Share Exchange enters into force, make use of the following system pertaining to Oisix shares:
・System for acquisition of odd-lot shares (sale of lots of less than 100 shares)
Pursuant to the Company Law of Japan Article 192 Section 1, all those shareholders with odd-lot
shares can make a written demand for purchase of their odd-lots to Oisix.
(4)

Treatment of new share options and bonds with new share options along with the Share Exchange
DWMK has not issued any new share options or bonds with new share options.

(5) Management Structure after the Share Exchange
Oisix and DWMK have agreed, on condition that the Share Exchange enters into force, that they will
reciprocally second the following Directors to their Boards:
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①

②

Seconding of Directors from Oisix to DWMKBoard Director

Kohey Takashima (currently Oisix President and CEO)

Board Director

Susumu Niimiya (currently Oisix Executive Officer)

Seconding of Directors from DWMK to Oisix
Board Director

3.

Kazuyoshi Fujita (currently DWMK President and CEO)

Details of Allocations pertaining to the Share Exchange, such as the basis of calculation(1)

Details of the basis for and reasoning behind allocations.
In order to ensure a fair and appropriate share exchange ratio (hereafter ‘the Share Exchange Ratio’) to be
used in the Share Exchange, Oisix requested that the Share Exchange Ratio be calculated by Seiran AdvisoryCo., Ltd. (hereafter ‘Seiran Advisory’), a third-party appraiser independent of both Oisix and DWMK.
In meetings today of the Boards of both Companies, the Share Exchange Ratio calculated by Seiran
Advisory having been presented to Oisix (please refer to (2) below for details), and careful study, discussion
and negotiation with DWMK having taken place, the Share Exchange ratio was deemed fair for all
shareholders of both companies’ stock, and it was agreed to implement the Share Exchange.

(2)

Items pertaining to the calculation①

The name of the calculating appraiser and its relationship with Oisix.
Seiran Advisory, a third-party appraiser, is a calculating appraiser independent of both Oisix and DWMK

that has no connection with parties involved in Oisix or DWMK, and has no significant vested interest in the
Share Exchange worthy of mention.
②

Outline of Calculation

As described above in (1) Details of the basis for and reasoning behind allocations, in order to ensure thefairness and appropriateness of the Share Exchange Ratio, Oisix requested that it be calculated by Seiran
Advisory, a third party appraiser independent of both Oisix and DWMK. In advance of Board Meetings held
today, Oisix received from Seiran Advisory, on December 21, 2016, a Calculation Document detailing the resultof its appraisal.
To calculate Oisix’s share price, Seiran Advisory employed the average share price method, because thecompany is listed on TSE Mothers and an average market share price exists.
With the average share price method, taking December 21, 2016 as the appraisal date, the share price isextrapolated from the closing price on the appraisal date and a simple-average of the closing price for eachtrading day over the periods of 1 month, 3 months and 6 months before the appraisal date.
To calculate DWMK’s share price, because there are several similar listed companies that can be comparedwith DWMK and it is possible to analogise their share prices, the comparable company analysis method was
employed, along with the discounted cash flow (DCF) method, to reflect the state of future business activities
in the calculation.
With the comparable company analysis method, calculations are made by dividing the market capitalisationof listed companies of a similar size to DWMK, with similar business and earnings models, by their Price toEarnings Ratio (PER) and Price to Book Value Ratio (PBR), and also by dividing their enterprise values by theirPrice to Sales Ratio.
With the DCF method, enterprise value is appraised by applying a specific rate of discount to future cash
flows based on DWMK’s business projections for FY3/2017 2H through FY3/2021 to arrive at a present value
estimate for the company.
Furthermore, it is assumed that information relating to DWMK’s financial projections was logically put
together and supplied on the basis of management’s current best-case projections. According to the businessplans that form the basis of the enterprise value appraisal, there is no financial year in which significant
increases or decreases in earnings is foreseen. Analysis of Seiran Advisory’s Share Exchange Ratio reflects theabove information up to and as of December 16, 2016.
4

As a result of the above, the valuation range, if the stock value of 1 ordinary share in Oisix is taken as 1, is asfollows:
Method applied

Result of Share Exchange Ratio
DWMK

Calculation

Comparable Company Analysis

209.61～461.40

DCF

242.04～295.52

Oisix
Average share priceFor the calculation of the Share Exchange Ratio, note that Seiran Advisory as a general rule used data
received from both companies and publicly available data, etc., ‘as is,’ on the assumption that the materials andinformation it used were all accurate and complete. Seiran Advisory did not itself verify said accuracy orcompleteness.
(3)

Prospect of and reason for delisting
There is no prospect of Oisix delisting with the Share Exchange.

(4)

Measures to ensure fairness①

Obtain Calculation Documentation from third party appraisers
Oisix is not a holder of DWMK shares outstanding, but in order to ensure fairness in the Share Exchange

Share Exchange Ratio, Oisix requested that the independent third party appraiser mentioned above calculate
the share exchange ratio to apply to the Share Exchange. Note that Oisix has not obtained from said third
party appraiser any opinions in writing (i.e. Fairness Opinions) as to whether the agreed share exchange ratio
is appropriate from a financial perspective for all shareholders concerned.
②

Advice from independent law firm
Oisix used Kokubo Law Office, a third party independent of both Oisix and DWMK, as a legal advisor, andreceived advice from a legal viewpoint about procedures and accommodations, etc.
(5)

Measures to avoid conflicts of interest
None of the Members of the Board of Directors of Oisix or DWMK who resolved to carry out the Share
Exchange hold additional concurrent positions as Directors or employees of the counterparty, and because no
conflicts of interest shall therefore arise from the Share Exchange, no special measures have been put in place.

4.

Overview of the Companies conducting the Share Exchange

(1)

Name

(2)

Address

Share exchange full parent company

Share exchange wholly-owned subsidiary

Oisix IncDWMK Co., Ltd.

1-3-12 Higashi Gotanda,

Shinagawa-ku,

Tokyo, Japan.

1-3 Nakase, Mihama-ku, Chiba City, Chiba
Prefecture, Japan.

(3)

Representative Position and Name CEO and President Kohey Takashima

CEO and President Kazuyoshi Fujita(4)

Details of Business

Sale via the Internet, etc., to general

Operation of home delivery service ofconsumers of meals and ingredients with aprocessed foods, sundry goods andfocus on safety, e.g. specially grownagricultural, livestock and marine produce

agricultural

with a focus on safety, reliability and(5)

Capitalproduceandadditive-freeprocessed foods.

deliciousness.

¥924mn¥347mn(as of September 30, 2016)(as of September 30, 2016)(6)

Date Founded

March 31, 2000

November 8, 1977

(7)

Shares Outstanding

6,149,188

7,765(as af September 30, 2016)(as of September 30, 2016)
5

(8)Close of Financial YearEnd of March

End of March(9)

Number of Employees

224

190

(as of September 30, 2016)（(as of September 30, 2016)

Recruit Lifestyle Co., Ltd.

Softbank Group

Isetan Mitsukoshi GroupJR East Station Retailing Co., Ltd.

Yahoo! JAPAN

Odakyu Group

Benesse Corporation

Lawson Inc.

The Bank of Tokyo-Mitsubishi UFJ

Sumitomo Mitsui Banking Corporation

Sumitomo Mitsui Banking Corporation

The Bank of Tokyo-Mitsubishi UFJ

Mizuho Bank

Chiba Kogyo Bank

(10)

(11)

(12)

Main Partners

Main banks of account

Major

shareholders

KoheyTakashima

19.78

Lawson Inc

33.40

and their shareholding

Recruit Holdings

10.77

Kazuyoshi Fujita

12.63

ratios (%)

BNYM TREATY DTT 10 (Standing Proxy for

Employee Shareholding Assoc.

11.86

The Bank of Tokyo-Mitsubishi UFJ)

Yasuaki Komori

2.92

Hiroshi Hayakawa

2.16

7.59

STATE STREET BANK AND TRUST COMPANY(Standing Proxy for Hongkong & Shanghai
Bank)

4.30

Japan Trustee Services Bank (Trust Accounts)
2.83(as of September 30, 2016)(13)(as of September 30, 2016)

Current relationship between the companies
Capital Relationship

There is no capital relationship to mention.

Personal Relationship

There are no personal relationships to mention.

Business Relationship

There is no business relationship to mention.

Qualification as a

Oisix does not qualify as a DWMK related party, and DWMK does not qualify as an Oisix

Related party

Related Party.

(14) Business results and financial status of the past 3 years
Oisix(Units: ¥mn. Unless otherwise stated)(c.f.)(Note)1
Fiscal Period

FY3/14

FY3/15

FY3/16

FY3/17(One half)

Net Assets

3,373

3,777

3,867

4,076

Total Assets

5,690

6,331

6,803

7,056

Net Asset Value per share (¥)

586.71638.07667.05-

Sales

15,90918,06020,158

10,718Operating income

740

648

774

270

Recurring income

775

668

806

285

Net income (Note)2

436

347

538

187

78.27

59.74

90.26

31.94

-

-

-

-

（-）

（-）

（-）

Net income per share (¥)
Dividend per share (¥)(Interim dividend)(Note)1．Because Oisix is transferring to consolidated accounting, the figures for FY3/17 (Q2 cumulative) are consolidated.
2．FY3/17 (Q2 cumulative) Net Income is quarterly net income that belongs to parent company shareholders, andnet income per share is quarterly net income per share

6

DWMK

(Units: ¥mn. Unless otherwise stated)(c.f.)
Fiscal Period

FY3/14

FY3/15

FY3/16

FY3/17(One half)

Net Assets

2,726

2,685

2,907

2,935

Total Assets

5,319

5,372

5,485

5,303

366,553.67

345,816.63

374,491.52-

13,365

13,583

13,572

6,473

Operating income

52

225

368

45

Recurring income

73

210

367

47

Net income (Note)2

22

-41

222

28

3,052.53-5,304.73

28,674.89

3,608.88

-

-

-

-

（-）

（-）

（-）

Net Asset Value per share (¥)
Sales

Net income per share (¥)
Dividend per share (¥)(Interim dividend)(Note) FY3/17 (Q2 cumulative) Net Income is quarterly net income, and net income per share is quarterly net income per
share
5.

Status after the Share Exchange
Share Exchange Full Parent Company

（1）

Name

Oisix Inc.

（2）

Address

1-3-12 Higashi Gotanda, Shinagawa-ku, Tokyo, Japan.

（3）

Representative Position and Name

CEO and President Kohey Takashima（4）

Details of Business

Sale via the Internet, etc., to general consumers of meals and ingredients with afocus on safety, e.g. specially grown agricultural produce and additive-free processed
foods.

（5）

CapitalCurrently not fixed（6）

Close of Financial YearEnd of March（7）

Net Assets

Currently not fixed（8）

Total Assets

Currently not fixed6.

Overview of Accounting Procedures
The Share Exchange constitutes an ‘Acquisition’ according to the provisions of the Accounting Standards for
Business Combinations (ASBJ Statement No. 21) and Guidance on Accounting Standard for Business Combinations
and Accounting Standard for Business Divestitures (ASBJ Guidance No. 10). As such, the “Purchase Method,” which
identifies Oisix as the acquirer, will likely be applied. Please note that while it is projected that Oisix’s consolidated
financial statements will feature goodwill (or negative goodwill) in connection with the Share Exchange, the amountof any goodwill (or negative goodwill) to arise is not presently known. Details shall be swiftly announced as they

emerge.
7.

Outlook going forward
Because the planned date of entry into force of the Share Exchange is March 31, 2017, Oisix’s FY3/17 Consolidated
Results will not reflect DWMK’s business performance. Also, while it is projected that costs associated with studies
and procedures connected with the Share Exchange will arise, their impact on this term’s consolidated results iscurrently under close evaluation. If a revision of consolidated full-year forecasts is required, notification of the same7

will swiftly be made.
Also, because treasury stock will be consumed as allocated shares in the Share Exchange and new shares issued,a change in major shareholders is expected. Today we therefore separately release a ‘Notification about Change in
Major Shareholders’ dated December 22, 2016.
（C.f.）Net Consolidated Income Forecast (as disclosed on August 9, 2016)(Units: ¥mn)
Net Income

Sales

Operating Income

Recurring Income

belonging to parent
shareholders

FY3/17 Net Income Forecast

23,000

820

830

580

- END -

8