The transactions pursuant to the joint share transfer described in this press release involve securities of aJapanese company. The joint share transfer is subject to disclosure requirements of Japan that are different fromthose of the United States. Financial information included in this document, if any, was excerpted from financial
statements prepared in accordance with foreign accounting standards that may not be comparable to thefinancial statements of United States companies.
It may be difficult for you to enforce your rights and any claim you may have arising under the U.S. federal
securities laws, since the issuer is located in Japan and some or all of its officers and directors reside outside of
the United States. You may not be able to sue a Japanese company or its officers or directors in a Japanese court
for violations of the U.S. securities laws. It may be difficult to compel a Japanese company and its affiliates tosubject themselves to a U.S. court’s judgment. You should be aware that the issuer may purchase securities
otherwise than under the joint share transfer, such as in the open market or through privately negotiatedpurchases.
This document has been translated from the Japanese-language original for reference purposes only. In the eventof any conflict or discrepancy between this document and the Japanese-language original, the Japaneselanguage original shall prevail in all respects.

May 7, 2021
To whom it may concern:

Company Name:

Maruka Corporation

Representative:

Kunihiko Iida
President and Representative Director(Tokyo Stock Exchange Securities Code: 7594)
Contact:

Naoto Shimabayashi
Executive Officer, Head of
Administration Division(Tel: 06-6450-6823)

Company Name:

Furusato Industries, Ltd.

Representative:

Ryohei Furusato
President and Representative Director(Tokyo Stock Exchange Securities Code: 8087)
Contact:

Taketsugu Fujii
Director, General Manager of the
Administration Headquarters(Tel: 06-6946-9605)

1

Notification Regarding Integration of Maruka Corporation and Furusato Industries,
Ltd. through Establishment of Joint Holding Company (Share Transfer)
Maruka Corporation (“Maruka”) and Furusato Industries, Ltd. (“Furusato”) have reached an agreement with respect
to the establishment of MARUKA FURUSATO Corporation, which will be the wholly owning parent company of bothcompanies (the “Joint Holding Company”), through a joint share transfer (the “Share Transfer”) scheduled to become
effective on October 1, 2021 (the “Integration”). As of May 7, 2021, pursuant to the resolution of the respective meetingsof the Boards of Directors of Maruka and Furusato held on May 7, 2021, both companies have entered into an agreement
on management integration concerning the Integration (the “Integration Agreement”), and have prepared a share transfer plan
regarding the Share Transfer (the “Share Transfer Plan”), as described below:
The execution of the Integration and the Share Transfer is subject to the approval of the general meetings ofshareholders of Maruka and Furusato, respectively, and any other permits and approvals required for the Integration.

1.
(1)

Background and Purpose of the Integration
Background
Maruka was established in 1946 as a trading company that conducts domestic sales and the import andexport of various goods, including paper, woolen textiles, bicycles, bearings and tools. Since then, Maruka
has operated a wide range of businesses in Japan and abroad as a trading company specializing in industrial
and construction machinery. With respect to the Industrial Machinery Division, Maruka sells machine tools,
forming machinery, injection molding machinery and other machinery directly to its customers in Japan andabroad. In particular, through the global network consisting of 23 overseas bases through local subsidiaries
in North America, Asia and China, Maruka engages actively in sales activities such as sales and maintenanceto local companies and Japanese companies and support to Japanese companies in their overseas expansion.
With respect to the Construction Machinery Division, with the aim to expand business areas and to enhance
profitability, Maruka acquired Japan Rental Co., Ltd., which operated a rental business of construction
machinery and undertook contracting work at height, in 2003, and sells and rents out aerial work platforms,
cranes and other vehicles.
Maruka has strived to be a company that meets the expectations of society through its guiding philosophy“Sincerity is Everything in Life”, its mottoes “Sincere Service” and “Unique Solutions” and its mission“Customer Satisfaction”. As a trading company specializing in machinery that will continue to contribute to
the manufacturing of products around the world based on this management spirit, Maruka aims to further
strengthen its sales of industrial and construction machinery as well as expanding the business of peripheral
categories, such as parts and consumable goods, improving its earning power by strengthening its
engineering capability through the incorporation of manufacturer functions into group companies, investing
more management resources in overseas markets, expanding into growing fields such as food machinery and
EV through M&A, and strengthening management practices by improving profitability.
On the other hand, since its establishment in 1959, Furusato has been engaged in the manufacture,purchase and sale of steel frame building supplies. Amid an increase in market share in a relatively small
market and market contraction in a period of slow growth, in 2000, Furusato acquired G-net Corporation, amachine and industrial tool wholesaler, in order to ensure its growth by expanding its business areas, and2

commenced the sales of machines and industrial tools to the domestic manufacturing industry. In 2007, it
acquired Gifu Shoji, Co., Ltd. in order to further develop the machine and industrial tool business and build
its own strength. Moreover, intending to develop the minor security business as a core business of the
Furusato Group, it acquired Security Design, Inc. in 2016, and has been expanding the business in the crime
prevention and surveillance market.
The Furusato Group has expresses its ideal through the group philosophy, OUR VISION “Hoping for asustainable society, being responsible for the continuing growth of the group and our employees work
energetically,” and specifies what its employees should do in OUR MISSION “Creating value for many
people with unique ideas and engaging in meaningful activities.” In accordance with this group philosophy,
it has set out the group’s basic policy “Promoting value-based management by unique ideas.” Based on theprinciple of business portfolio management*, the Furusato Group aims to enhance competitiveness indifferent businesses, secure a revenue base by pursuing customer satisfaction, create a new business throughsynergies between businesses, re-challenge overseas business fields, acquire volumes and functions throughM&A and alliances and increase corporate value through the promotion of capital cost management.
As described above, both companies have been considering alliances, including their integration, in orderto address challenges in their respective business areas, achieve expansion of operation results, enhance
corporate value and accelerate further growth and development. By using the strengths of both companies
under the platform strategy* for creating optimal value, the companies have come to realize that they will beable to overcome their respective challenges and create even greater synergies.
Under such circumstances, both companies have been engaged in broad discussions for the purpose of
maximizing their corporate value since around September 2019. In the course of considering various
solutions to its business challenges, Furusato made contact with business consultants and financial
institutions, and after considering and discussing measures, including implementing alliances withcompanies that are in the same business environment and are likely to face similar business challenges,
Furusato considered Maruka as a candidate for an alliance company that could be expected to achievesignificant synergies and enhance corporate value early. Triggered by the proposal of integration by Furusato
to Maruka in June 2020, both companies have commenced full-fledged discussions. On the other hand,
Maruka has also been considering business challenges as mentioned above variously, and upon receiving the
proposal of management integration from Furusato, Maruka proceeded to consider the resolution of businesschallenges and the enhancement of corporate value through the proposal. Through these discussions, thecompanies have confirmed that they can complement their challenges and strengths, and have reached acommon understanding that establishing a presence as an engineering trading company is the best way tomaximize their corporate value. As a result, Maruka and Furusato have decided to establish a joint holding
company to integrate their management based on an equal footing.
* Business portfolio management: Business approach that diversifies risks and secures profitability, stability and growthpotential by operating multiple businesses with different business models and economic sensitivities. The current life
cycle of each business is identified and management capital is distributed to areas with higher growth potential.
Moreover, by withdrawing the businesses that have lost a competitive advantage, a viable business portfolio isconstructed.
* Platform strategy: A strategy that defines a mechanism for providing optimal value to users in each business as aplatform, and continues to seek the perfect form of the required platform by complementing the lacking pieces(functions and scales) in each business area.

3

(2)

PurposeThrough the Integration, both companies will develop their platform strategy by achieving the synergy
described below and strive to enhance their corporate value as an engineering trading company that fully
supports manufacturing. It is expected that approximately 2 billion yen of synergy effects will be achievedby 2025 on a consolidated operating profit basis.
(i)

Synergy through increased transaction volumes in machine tools
Although both companies sell a certain amount of machine tools in Japan, most of their brands do not
overlap, and cross-selling will enable them to expand the lineup and satisfy the diverse needs of users.
In addition, costs will be reduced due to favorable procurement conditions.
With respect to the brands for which both companies have purchasing channels, the transaction
volume will be increased as a result of the Integration. Then, by establishing a close relationship with
manufacturers, we can provide various benefits such as offering a wider range of products andproviding services under better conditions, and we can expect more effects than we can obtain from thetotal transaction volume, such as strengthening the relationship with users.
Furthermore, by utilizing Maruka’s domestic sales channel, both companies strive to achieve acomprehensive solution by providing a one-stop service through the cross-selling of Furusato’s
equipment and tools and consumable goods centered on peripheral equipment of machine tools with
Maruka’s machine tools.

(ii) Expansion of robot system integrator business
Both companies have been strengthening their design and engineering functions to strengthen theirability to propose and introduce robotic automation lines, the demand of which is expected to increase,in order to address the declining birthrate and aging population and to improve production efficiency.
The expansion of engineering functions and the strengthening of proposal capabilities will contribute toestablishing their presence as an engineering trading company, enabling both companies to improvetheir ability to respond to diverse user needs. With these expanded and enhanced output functions, it ispossible to efficiently manufacture and deliver the number of projects expected to increase due toorders of both companies.
(iii) Collaboration in global market
By taking advantage of Maruka’s global network consisting of 23 locations, mainly in North
America and Asia, both companies will be able to develop high-quality and comprehensive sales
operations that include industrial machinery as well as peripheral equipment and consumable goods.
By further expanding their lineup of machinery and peripheral equipment centered on private brands
that are developed in Japan and expanding it overseas, both companies strive to meet the user’s needs ina one-stop manner.
(iv) Improvement of ability to generate cash flow through efficiency of management resources and strategic
investments
Both companies strive to improve their ability to generate cash flow by allocating management
capital to areas with high growth potential and securing the profitability and stability of the entire group4

through the mutual utilization of domestic and overseas bases and optimization of the allocation ofhuman resources as well as concentrating management resources in strategic areas.
2.
(1)

Summary of the Share Transfer
Schedule of the Share Transfer
Record date for the ordinary general meeting ofMarch 31, 2021 (Wed)shareholders (Furusato)
Meeting of board of directors for approval of the
May 7, 2021 (Fri) (Today)
Integration Agreement and the Share Transfer Plan
(both companies)
May 7, 2021 (Fri) (Today)
Conclusion of the Integration Agreement andpreparation of the Share Transfer Plan (bothcompanies)
Public notice of the record date for the extraordinary (Scheduled on) May 18, 2021 (Tue)general meeting of shareholders (Maruka)
Record date for the extraordinary general meeting of (Scheduled on) June 2, 2021 (Wed)shareholders (Maruka)(Scheduled on) June 21, 2021 (Mon)

Ordinary general meeting of shareholders forapproval of the Share Transfer Plan (Furusato)
Extraordinary general meeting of shareholders for(Scheduled on) July 16, 2021 (Fri)approval of the Share Transfer Plan (Maruka)
Date of delisting of stocks (both companies)(Scheduled on) September 29, 2021 (Wed)Incorporation and registration of the Joint Holding
Company (Effective date)Listing of shares of the Joint Holding Company(Scheduled on) October 1, 2021 (Fri)(Scheduled on) October 1, 2021 (Fri)

During the procedures, the above schedule is subject to change upon consultation between bothcompanies if the necessity arises in the course of the proceedings for the Integration or under any othercircumstances.
(2)

Method of the Share Transfer
The Share Transfer will consist of a joint share transfer whereby Maruka and Furusato will become thewholly owned subsidiaries and the newly established Joint Holding Company will become the wholly
owning parent company.

(3)

Details of Allotment in the Share Transfer (Share Transfer Ratio)
Share Transfer Ratio

Furusato

Maruka1

1.29(Note 1) Details of Share Allotment in the Share Transfer
One (1) share of common stock of the Joint Holding Company for One (1) share of common stockof Furusato, and 1.29 share of common stock of the Joint Holding Company for One (1) share ofcommon stock of Maruka will be allotted. Provided, however, that the above share transfer ratio issubject to change upon consultation between both companies in the event of any material change to theconditions upon which the calculations are based.

5One unit of shares of the Joint Holding Company shall consist of 100 shares.
If the number of shares of common stock of the Joint Holding Company which is to be delivered toa shareholder of Maruka or of Furusato through the Share Transfer contains any fraction less than one
share, the Joint Holding Company will pay the relevant shareholder a cash amount corresponding tosuch fractional portion less than one share, pursuant to Article 234 of the Companies Act and otherrelevant laws and regulations.
(Note 2) Number of New Shares in the Joint Holding Company to be delivered through the Share Transfer(scheduled): 25,587,817 shares of common stock
The above number has been calculated based on the total number of issued and outstanding sharesin Maruka as of February 28, 2021 (9,327,700 shares) and the total number of issued and outstanding
shares in Furusato as of March 31, 2021 (14,574,366 shares). Provided, however, that the treasury
shares Maruka held as of February 28, 2021 (747,186 shares), the treasury shares Furusato held as ofMarch 31, 2021 (55,412 shares) and the treasury shares acquired through the purchase of shares inconnection with a share purchase request by a dissenting shareholder as set forth in Article 806,
Paragraph 1 of the Companies Act that is exercised in connection with the Share Transfer, have been
excluded in calculating the above number due to the fact that Maruka and Furusato plan to cancel theirrespective treasury shares that they currently hold or will newly acquire by the effective date of the
Share Transfer, to the extent practicable. As the number of treasury shares, which are actually canceledby the effective date of the Share Transfer, is currently not yet fixed, the number of said shares to beissued by the Joint Holding Company may be changed.
(Note 3) Treatment of shares less than one unit
Maruka and Furusato will apply for the listing of the shares of the Joint Holding Company, which
are to be allotted to the shareholders of Maruka and Furusato through the Share Transfer, on the Tokyo
Stock Exchange. If such application is approved, the shares of the Joint Holding Company will be
traded on the Tokyo Stock Exchange. Therefore, we believe that we may continue to provide liquidity
for the shares of the Joint Holding Company to the shareholders of Maruka or Furusato, who will beallotted shares of the Joint Holding Company in such number equal to or more than 100 shares, whichis the number of shares constituting one unit of shares of the Joint Holding Company, by holding 78
shares or more of Maruka or 100 shares or more of Furusato or otherwise.
The shareholders of Maruka or Furusato, who are allotted with the shares of the Joint Holding
Company in such number less than 100 shares, may not sell such allotted shares on the Tokyo Stock
Exchange or any other financial instruments exchange; however, such shareholders holding shares lessthan one unit may request the Joint Holding Company to purchase such shares, or alternatively,
pursuant to such provisions to be specified in the articles of incorporation of the Joint Holding Company,
they will also be able to purchase the shares from the Joint Holding Company, in such number, which,
together with such shares less than one unit they hold, will constitute one unit.
(4)

Treatment of Stock Acquisition Rights and Bonds with Stock Acquisition Rights accompanied by the Share
Transfer
Maruka and Furusato have not issued any stock acquisition rights or bonds with stock acquisition rights.

(5)Treatment of Treasury Shares
Maruka and Furusato plan to cancel their respective treasury shares that they currently hold or will newly6

acquire by the effective date of the Share Transfer, to the extent practicable.
(6)

Dividends of Surplus
Maruka plans to distribute dividends of surplus with a limit of JPY 20 per share, where the Record Date is
May 31, 2021.
On the other hand, Furusato plans to distribute dividends of surplus with a limit of JPY 35.5 per share, where
the Record Date is March 31, 2021.
Taking into account the business environment, financial position and any other similar issues after theestablishment of the Joint Holding Company, the both companies will continue to consider various shareholder
return policies by the Joint Holding Company, including submitting a proposal for a commemorative dividend
for the business integration at the first ordinary general meeting of shareholders of the Joint Holding Company.

3.

Grounds for Details of Allotment in the Share Transfer(1)

Grounds and Reasons for Details of Allotment
For the calculation of the Share Transfer Ratio as set forth in “(3) Details of Allotment in the Share
Transfer (Share Transfer Ratio)” under “2. Summary of the Share Transfer” above, Maruka appointed
Nomura Securities Co., Ltd. (“Nomura Securities”) and Furusato appointed Mitsubishi UFJ Morgan Stanley
Securities Co., Ltd. (“Mitsubishi UFJ Morgan Stanley Securities”) as their independent financial advisors
and the independent calculation agents, respectively, to ensure the fairness and appropriateness of the Share
Transfer Ratio.
Based on the results of the calculation of the Share Transfer Ratio and advice received from Nomura
Securities, the independent calculation agent as described in “(i) Acquirement of calculation reports from theindependent calculation agent” under “(4) Measures to Ensure Fairness” below, legal advice from KitahamaPartners as described in “(ii) Advices from independent law firms” under “(4) Measures to Ensure Fairness”
below, and the results of various due diligence surveys conducted on Furusato by Maruka and its advisors,
and after careful discussions and examinations considering the financial conditions, business performancetrends, share price trends or any other similar issues of both companies, Maruka has concluded that the Share
Transfer Ratio described in “(3) Details of Allotment in the Share Transfer (Share Transfer Ratio)” under “2.
Summary of the Share Transfer” above is appropriate and the Share Transfer will contribute to the interestsof the shareholders of Maruka.
Based on the results of the calculation of the Share Transfer Ratio and advice received from Mitsubishi
UFJ Morgan Stanley Securities, the independent calculation agent as described in “(i) Acquirement ofcalculation reports from the independent calculation agent” under “(4) Measures to Ensure Fairness” below,
the legal advice from Anderson Mori & Tomotsune as described in “(ii) Advices from independent law
firms” under “(4) Measures to Ensure Fairness” below, and the results of various due diligence surveys
conducted on Maruka by Furusato and its advisors, and after careful discussions and examinations
considering the financial conditions, business performance trends, share price trends or any other similar
issues of both companies, Furusato has concluded that the Share Transfer Ratio described in “(3) Details of
Allotment in the Share Transfer (Share Transfer Ratio)” under “2. Summary of the Share Transfer” above isappropriate and the Share Transfer will contribute to the interests of the shareholders of Furusato.
Based on such calculation results and/or analyses by the independent calculation agents and the advicesof the legal advisors, as well as the results of the due diligence conducted by each company on the other7company, both companies comprehensively took into account factors such as the financial conditions, future
prospects, and share price trends of both companies and repeatedly and carefully negotiated and/or
deliberated on multiple occasions. Finally, both companies reached the conclusion that the Share Transfer
Ratio described in “(3) Details of Allotment in the Share Transfer (Share Transfer Ratio)” under “2.
Summary of the Share Transfer” above is appropriate and will contribute to the interests of the shareholdersof both companies. At the board of directors’ meetings of both companies held today, the execution of theIntegration Agreement was resolved, the Integration Agreement was entered into and the Share Transfer was
jointly prepared.
(2)

Matters Concerning Calculation(i)Names of calculation agents and the relationship with listed companies and the other party
Neither Nomura Securities nor Mitsubishi UFJ Morgan Stanley Securities is a party related to
Maruka and Furusato, and neither Nomura Securities nor Mitsubishi UFJ Morgan Stanley Securities
has any material interest to be described with respect to the Share Transfer.

(ii) Summary of calculation
For the calculation of the Share Transfer Ratio, Nomura Securities adopted (a) an average market
share price analysis due to the fact that the shares of Maruka and Furusato are both listed on the First
Section of the Tokyo Stock Exchange and their respective market share prices exist, (b) a comparable
company analysis, through which Nomura Securities is able to infer the value of shares of both thecompanies as there are multiple similar listed companies comparable to them and (c) a discounted cash
flow analysis (“DCF Analysis”) in order to reflect the status of future business activities in theevaluation, respectively.
The calculation results pursuant to each method are as follows. The calculation range of the Share
Transfer Ratio below shows the calculation range of the number of shares of the Joint Holding
Company to be allotted for each common share of Maruka, when one (1) common share of the Joint
Holding Company is allotted for one (1) common share of Furusato.
Adopted Method

Calculation Range of Share Transfer Ratio

Average market share price analysis

1.49 - 1.54

Comparable company analysis

0.78 - 0.94

DCF Analysis

1.12 - 1.37

For the average market share price analysis, where May 6, 2021 is the record date, Nomura
Securities made calculation based on the closing price on the record date, the average closing price forfive (5) business days from April 26, 2021 to the record date, the average closing price for one (1)month from April 7, 2021 to the record date, the average closing price for three (3) months fromFebruary 8, 2021 to the record date and the average closing price for six (6) months from November 9,2020 to the record date.
Nomura Securities, in calculating the Share Transfer Ratio above, relied upon the information
furnished by both companies, publicly available information and any other similar information.
Nomura Securities assumes that such information is all accurate and complete, and has not8

independently verified such accuracy and completeness. Nomura Securities has not independently
valued, appraised or assessed the assets or liabilities (including any derivatives, off-balance-sheet assets
and liabilities, and other contingent liabilities) of both companies and their respective affiliates(including analyzing and valuing individual assets and liabilities), nor has it engaged any third party
institution for an appraisal or assessment. The calculation of the Share Transfer Ratio by Nomura
Securities reflects the information and economic conditions as of May 6, 2021. In addition, Nomura
Securities assumes that the financial forecast and any other forward-looking information of Maruka
were reasonably made by the management of Maruka based on the best currently possible and goodfaith forecasts and judgments, that the financial forecast and any other forward-looking information of
Furusato were reasonably reviewed and confirmed by the management of Maruka based on the best
currently possible and good faith forecasts and judgments, and that the financial conditions of Maruka
and Furusato will change in accordance with such forecasts.
The synergy effects resulting from the Integration are not included in the business plans of Maruka
and Furusato, which Nomura Securities used as the basis for the calculation pursuant to the DCF
Analysis. The business plan of Maruka for the period from the fiscal year ending November 2021 up to
the fiscal year ending November 2025, which Nomura Securities used as the basis for the calculation
pursuant to the DCF Analysis, includes such fiscal year, in which a significant increase or decrease inprofit is expected. Specifically, in the fiscal year ending November 2022, we expect a significant
increase in profit compared to the previous fiscal year, as facility investment by customers, which has
been restrained by the impact of the novel coronavirus (COVID-19), recovers in earnest. In the fiscal
year ended November 2023, we expect a significant increase in profit compared to the previous fiscal
year, as we expand our staffing in four regions of the world, namely Japan, the Americas, China andSoutheast Asia, and further strengthen our engineering functions. The business plan of Furusato for theperiod from the fiscal year ended March 2021 up to the fiscal year ending March 2024, which Nomura
Securities used as the basis for the calculation pursuant to the DCF Analysis, includes such fiscal year,
in which a significant increase or decrease in profit is expected. Specifically, in the fiscal year ending
March 2023, we anticipate that sales revenues from steel construction materials, equipment and tools
and machinery equipment will increase in line with large-scale developments in the Tokyo
metropolitan area and increased capital investment by private companies, both of which have been
restrained by the impact of the novel coronavirus (COVID-19). Therefore, we expect a significant
increase in profit compared to the previous fiscal year.
For the calculation of the Share Transfer Ratio, Mitsubishi UFJ Morgan Stanley Securities adopted(a) a market share price analysis due to the fact that the shares of Maruka and Furusato are both listedon the financial instruments exchange and their respective market share prices exist, (b) a comparable
company analysis, through which Mitsubishi UFJ Morgan Stanley Securities is able to infer the valueof shares of both the companies as there are multiple similar listed companies comparable to them andalso (c) a DCF Analysis in order to reflect the status of future business activities in the evaluation,
respectively.
For the market share price analysis, where May 6, 2021 is the record date, Mitsubishi UFJ Morgan
Stanley Securities adopted the market share price ratio to the closing price for one (1) month, three (3)months and six (6) months until the record date on the Tokyo Stock Exchange.
Calculation of the value through the DCF analysis is based on the profit and investment plans in the9financial forecast presented by the management of Maruka and Furusato, the synergy effects of theIntegration, the results of the due diligence on Maruka and Furusato, and any other various elements
such as publicly available information, which both companies agreed to use for calculation purposes.
The financial forecast of Maruka used in the calculation include such fiscal years in which a significant
increase or decrease in profit is expected. In addition, the financial forecasts of Furusato used in thecalculation do not include such fiscal years in which a significant increase or decrease in profit isexpected. Specifically, in the fiscal years ending on November 2021 and November 2022, a significant
increase in profit is expected compared to the previous fiscal year, reflecting a recovery from theworsening profit caused by the spread of the novel coronavirus (COVID-19).
The calculation results of the number of common shares of the Joint Holding Company to be allottedfor each common share of Maruka under each method are as follows:
Adopted Method

Calculation Results of Share Transfer Ratio

Market share price analysis

1.49 - 1.52

Comparable company analysis

0.96 - 1.70

DCF Analysis

1.07 - 1.59

(Note) Mitsubishi UFJ Morgan Stanley Securities, in calculating the Share Transfer Ratio, relied upon
the information furnished by Maruka or Furusato, publicly available information and any othersimilar information in their original form, in principle. Mitsubishi UFJ Morgan Stanley
Securities assumes that such information is all accurate and complete, and has notindependently verified such accuracy and completeness. Mitsubishi UFJ Morgan Stanley
Securities has not independently valued and/or assessed the assets and liabilities (including any
off-balance-sheet assets and liabilities, and other contingent liabilities) of Maruka, Furusato, andtheir respective affiliates, nor has it engaged any third party institution for an appraisal orassessment. In addition, Mitsubishi UFJ Morgan Stanley Securities assumed that the financial
forecasts of Maruka and Furusato were reasonably prepared pursuant to the best forecasts andjudgments available as of May 6, 2021 of Maruka and Furusato. The calculation by Mitsubishi
UFJ Morgan Stanley Securities reflects said information until May 6, 2021.
(3)

Treatment of Application for Listing of the Joint Holding Company
Maruka and Furusato will apply for listing of the shares of the newly-established Joint Holding Company
on the Tokyo Stock Exchange. Shares of the Joint Holding Company are expected to be listed on October 1,
2021. Furthermore, the shares of each of Maruka and Furusato, which will become wholly-owned
subsidiaries of the Joint Holding Company through the Share Transfer, are scheduled to be delisted from theTokyo Stock Exchange on September 29, 2021, prior to the listing of the shares of the Joint Holding
Company.
The actual listing date for shares in the Joint Holding Company and delisting date for the shares in
Maruka and Furusato will be determined in accordance with the regulations of the Tokyo Stock Exchange.

(4)

Measures to Ensure Fairness
Maruka and Furusato have implemented the following measures to ensure the fairness of the Share
Transfer Ratio or any other fairness of the Share Transfer:

10

(i)

Acquirement of calculation reports from the independent calculation agent
Maruka, on behalf of its shareholders, received a share transfer ratio calculation report on May 6,
2021 from Nomura Securities, which is a calculation agent independent from Maruka and Furusato.
Please refer to “(2) Matters Concerning Calculation” under “3. Grounds for Details of Allotment in the
Share Transfer” above for a summary of report.
On the other hand, Furusato, on behalf of its shareholders, received a share transfer ratio calculation
report on May 6, 2021 from Mitsubishi UFJ Morgan Stanley Securities, which is a calculation agent
independent from Maruka and Furusato. Please refer to “(2) Matters Concerning Calculation” under “3.
Grounds for Details of Allotment in the Share Transfer” above for a summary of the report.

(ii) Advices from independent law firms
Maruka has obtained advices from Kitahama Partners as the legal advisor for the Share Transfer,from a legal standpoint with respect to the procedures for the Share Transfer and the methods and/or
processes of decision making by the board of directors.
On the other hand, Furusato has obtained advice from Anderson Mori & Tomotsune as the legal
advisor for the Share Transfer, from a legal standpoint with respect to the procedures for the Share
Transfer and the methods and/or processes of decision making by the board of directors.
Anderson Mori & Tomotsune and Kitahama Partners are independent from Maruka and Furusato,
respectively, and do not have any material interest with them.
(5)

Measures to Avoid Conflicts of Interest
There is no particular conflict of interest between Maruka and Furusato in connection with the Share
Transfer, and therefore no special measures have been taken.

4.

Profile of Relevant Parties to Share Transfer(1)

Trade Name

(2)

Location(3)(4)

Name and Title ofRepresentative

Maruka Corporation

Furusato Industries, Ltd.

2-2-5 Minamishin-machi, Chuo-ku,

1-2-10 Minamishin-machi, Chuo-ku,

Osaka 540-0024

Osaka 540-0024

Kunihiko Iida

Ryohei Furusato

President and Representative

President and Representative

Director

Director

Sales of industrial and construction

Sales of steel frame building

machinery

supplies
Sales of machinery and tools

Principal Business

Manufacture and sales of steel framebuilding supplies
Services incidental thereto

(5)
(6)
(7)

Paid-in Capital
Date of
Establishment
Number of Issued

JPY 1,414 million

JPY 5,232 million(as of February 28, 2021)(as of March 31, 2021)

December 16, 1946

May 19, 1959

9,327,700 (as of February 28, 2021)

14,574,366 (as of March 31, 2021)

11and Outstanding
Shares
(8)
(9)
(10)

(11)

November 30

March 31698 (as of November 30, 2020)

1,098 (as of March 31, 2021)

Principal Business

DAIHATSU MOTOR CO., LTD.

Daiwa House Industry Co., Ltd.

Partners

Nissan Motor Co., Ltd.

Sekisui House, Ltd.

Resona Bank, Limited.

MUFG Bank, Ltd.

MUFG Bank, Ltd.

Resona Bank, Limited.

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation

Mitsubishi UFJ Trust and Banking

Fiscal Year End
Number of
Employees

Principal Banks of
Account

Corporation
Sumitomo Mitsui Banking
Corporation

THE SFP VALUEREALIZATIONMASTER FUND
LIMITED (Standing
agent: Tachibana
Securities Co., Ltd.)
Kobelco Construction
Machinery Co., Ltd.

7.03%

FRT, Ltd.

18.97%

7.00%

MUFG Bank, Ltd.

4.88%

6.79%

The Master Trust Bankof Japan, Ltd. (Trustaccount)

4.84%

THE CHASE
MANHATTAN BANK,
N. A. LONDON
SPECIAL OMNIBUS
SECS LENDING
ACCOUNT (Standing
agent: Mizuho Bank,
Ltd., Settlement &Clearing Services
Department)

5.05%

Nippon Life Insurance
Company (Standing
agent: The Master Trust
Bank of Japan, Ltd.)

3.42%

Aioi Nissay Dowa
Insurance Co., Ltd.

4.71%

Ryohei Furusato

2.77%

Resona Bank, Limited.
STATE STREETCLIENT OMNIBUS
ACCOUNT OM 44(Standing agent: Hong
Kong and Shanghai
Banking Corporation
Limited, Tokyo Branch,
Custody Service
Department)

4.12%

Shinsho Corporation

2.66%

3.07%

HANWA CO., LTD.

2.37%

MUFG Bank, Ltd.

3.00%

Custody Bank of Japan,
Ltd. (Trust account)

2.28%

Nachi-Fujikoshi Corp.

(12)

Principal
Shareholders andShareholding Ratio

12

Custody Bank of Japan,
Ltd. (Trust account)

2.68%

Furusato Group
Employee Stock
Ownership Plan

2.20%

The Master Trust Bankof Japan, Ltd. (Trustaccount)

2.43%

SEIWA CHUOHOLDINGSCORPORATION

2.02%

Relationship(13)

between Parties to
the Share Transfer
Capital Relationship Not applicable.
Personnel

Not applicable.

Relationship
Business

Not applicable.

Relationship
Relationship withRelated Parties(14)

Not applicable.

Consolidated Results for the Latest Three Fiscal Years

Fiscal Year End

MarukaFurusato(consolidated)(consolidated)

NovemberNovemberNovember

March

March

March

2018

2019

2020

2019

2020

2021

21,07323,24823,15940,69042,30244,26149,012

51,52842,63066,98867,08366,512

2,428.89

2,676.84

2,692.84

2,806.90

2,908.60

3,036.29

64,511

69,19753,216

107,873

104,619

89,478

2,610

2,700

1,459

4,040

3,973

2,778

2,850

2,741

1,591

4,416

4,334

3,116

1,922

2,694

891

2,893

2,808

1,935

227.64318.94106.76199.57193.71133.53

Consolidated Net
Assets(JPY million)
Consolidated
Total Assets(JPY million)
Consolidated Net
Assets per Share(JPY)
Consolidated Net
Sales(JPY million)
Consolidated
Operating Income(JPY million)
Consolidated
Ordinary Income(JPY million)
Consolidated Net
Income(JPY million)
Consolidated Net
Income per Share

13

(JPY)
Dividend per
Share (JPY)
5.

45

44

60.00

58.50

40.50

Profile of Joint Holding Company to be Established through Share Transfer(1) Trade NameMARUKA FURUSATO Corporation(2) Location of Head Office

1-2-10 Minamishin-machi, Chuo-ku, Osaka
Chairman and Representative
Kunihiko Iida
Director
President and Representative
Ryohei Furusato
Director
Director
Toshiaki Takeshita(3) Representatives andDirectors (Scheduled)(4) Principal Business6.

52

Director

Katsuhiro Yamashita

Director

Tsunehisa Namba

Outside Director

Kazuaki Kotani

Outside Director

Hiroyuki Nakatsukasa

Outside Director

Junko Takechi

Standing Auditor

Satoshi Onishi

Outside Auditor

Kyoko Hikita

Outside Auditor

Yasuo Sasaki

Management of subsidiaries and any and all businesses incidental or
related thereto(5) Paid-in Capital

JPY 5,000 million(6) Fiscal Year End

December 31(7) Net Assets

Undetermined at present(8) Total Assets

Undetermined at present

Outline of Accounting Treatment
The Share Transfer will be treated as a “purchase” under the Accounting Standards for Business Combinations

and accordingly, the purchase method is expected to apply. As a result of the application of the purchase method,
goodwill (or negative goodwill) is expected to arise from the consolidated financial accounts of the Joint Holding
Company. The amount of goodwill has not been determined at present.
7.

Future Outlook
The management policy, business plan, performance forecasts and other matters of the Joint Holding Company

will be discussed by both companies and details will be announced once they are finalized.

14