June 26, 2023
Company name: PHC HOLDINGS CORPORATIONName of representative: Shoji Miyazaki, President, Representative Director and CEO(Securities code: 6523; PRIME Section of the Tokyo Stock Exchange)
Inquiries: Masashi Kimura, Executive General Manager of Corporate Administration Department(Telephone: +81-3-5408-7280)
Notice Regarding the Restructure of PHC Group Businesses
Through Internal Integrations and Transfer of Shares
Transfer of LSI Medience Diagnostic Reagents & Instruments Business to PHC,
Transfer of LSI Medience Clinical Trial Services Business to LSIM Safety Institute, andChange of LSIM Safety Institute to Wholly Owned Subsidiary of PHC Holdings

PHC Holdings Corporation (hereafter PHCHD) announces that its Board of Directors Meeting
held on June 23, 2023 resolved the following internal restructures: 1) integrating the Diagnostic
Reagents & Instruments business of LSI Medience Corporation (hereafter LSIM) under the In
Vitro Diagnostics Division of PHC Corporation (hereafter PHC IVD) through an absorption-typesplit, 2) integrating the Clinical Trial business of LSIM under LSIM Safety Institute Corporation(hereafter LSSI) through an absorption-type split, and 3) transferring all shares of LSSI toPHCHD and making LSSI a wholly owned subsidiary of PHCHD. All of the above companies
are wholly owned subsidiaries of PHCHD and the effective date of the restructure is scheduledfor November 1, 2023.
1. Background and purpose(1) Integration of LSIM’s Diagnostic Reagents & Instruments business under PHC IVD
through absorption-type split
Since developing Japan’s first clinical diagnostic reagent in 1962, the Diagnostic Reagents &Instruments Division of LSIM has supported and advanced healthcare by providing globallycompliant, high-speed, and high-precision in vitro diagnostic testing instruments andreagents, including point of care testing (POCT) technology and latex reagents used in clinicallaboratory testing and research.
PHC IVD launched the diagnostics industry’s first blood glucose monitoring (BGM) system in
1991. In addition to the development and manufacturing of BGM products, PHC IVD provides
various medical devices that support early detection and effective treatment of diseases, suchas motorized drug delivery devices and POCT technology, by leveraging its strength in1

manufacturing excellence.
PHCHD will integrate the diagnostics businesses of LSIM and PHC IVD, which have beencollaborating since LSIM joined PHCHD in 2019, to ensure the further growth of diagnostics
centered on POCT technology, which PHCHD has defined as one of the growth areas in its
mid-term plan or “Value Creation Plan.” Through this integration, PHCHD will pursue thefollowing initiatives to achieve business growth:Drive improvement in product quality and cost reduction by maximizing PHC IVD’s
strengths in manufacturing excellenceDevelop devices and reagents that meet customers’ unmet needs

Accelerate and expand sales outside of JapanEnhance offerings to key customers of both companies(2) Integration of LSIM’s Clinical Trial business under LSSI through absorption-type split,
and change of LSSI to a wholly owned subsidiary of PHCHD
The Clinical Trial business at LSIM supports drug development by providing bioanalysis
services with advanced analytical technologies, such as biomarkers and drug concentration
measurement in the clinical development stage. The business also advances drug developmentwith its Central Laboratory Service providing a series of testing processes, from the preparationof kits for collecting samples to actual sample collection, measurement, and reporting of results.
LSSI, a subsidiary of LSIM since 2021, provides non-clinical testing services, including
pharmacology, pharmacokinetics, and safety testing required mainly in the development andmarketing of pharmaceuticals and products related to regenerative medicine, as well as in theareas of agrochemicals, chemicals, and cosmetics. The business offers testing facilities thatcomply with Good Laboratory Practice (GLP), a standard to ensure the reliability of test results,
plus technical capabilities acquired through approximately 60,000 contract testing projects andexpertise accumulated over 45 years of experience.
LSSI already collaborates with LSIM as part of the LSIM Drug Development Supportbusiness. Together, the Non-Clinical Testing business of LSSI and the Clinical Trial businessof LSIM have growth opportunities in areas where PHCHD is focused, such as developmentof advanced therapeutic methods (new modalities) and global clinical trials. To capture thesebusiness opportunities and achieve further growth, PHCHD will acquire all shares of LSSI
from LSIM, making LSSI a wholly owned subsidiary of PHCHD. This integration will drive thefollowing initiatives:
Advance analytical technology, especially for emerging therapeutic methods2Enhance capabilities of the Japan-based clinical trial business to respond to needs ofoverseas pharmaceutical companies and analytical laboratories

Enhance partnerships with pharmaceutical companies, venture companies and academia
to provide advanced analysis

PHCHD expects the following effects from the integrations of (1) and (2) mentioned above:
Accelerate strategic decision-making and execution as a group by integrating businesses
with clear synergy opportunitiesImprove efficiency in resource allocation through intensive investment in priority areas
and organizational restructuring efforts

2. Outline of the integration involving the In Vitro Diagnostics business(1) Method: absorption-type split
LSIM is the origin company and PHC Corporation is the destination company. The rights
and obligations of the Diagnostic Reagents & Instruments business of LSIM will betransitioned to PHC Corporation through the absorption-type split.
(2) Schedule
Approval at the Board of Directors Meeting

June 23, 2023

Approval of the absorption-type split

Mid-August 2023 (TBD)

agreement at the Board of Directors Meeting
Approval of the absorption-type split at theMid-September 2023 (TBD)

Extraordinary Board of Directors Meeting
Effective date of the absorption-type split

November 1, 2023 (TBD)(3) Outline of the companies involved in the integration (as of March 31, 2023)(i) The destination company in the absorption-type split
Company name

PHC Corporation
Development, manufacturing and sales of healthcare

Business

products and services in Diabetes Management andDiagnostics & Life Sciences

Establishment

November 21, 1969

Headquarters

2131-1, Minamigata, Toon-shi, EhimeRepresentative

President, Representative Director
Nobuaki Nakamura
3Accounting period

MarchCapital

7,907 million JPY

Major shareholder andratio

PHC Holdings Corporation 100％(ii) The origin company in the absorption-type split
Company NameBusiness

LSI Medience Corporation
Clinical testing, diagnostic reagents and instruments, drug
development services, anti-doping testing, etc.

Establishment

April 15, 1975

Headquarters

1-2-3 Shibaura, Minato-ku, Tokyo

Representative

President and CEO, Representative Director,
Haruo Watanabe

Accounting Period

MarchCapital

3,000 million JPY

Major shareholder andratio

PHC Holdings Corporation 100％

3. Outline of the integration involving the Clinical Trial business(1) Method: subsidiarization and absorption-type split(i)

PHCHD will acquire all shares of LSSI from LSIM through a share transfer.

(ii) LSIM is the origin company and LSSI is the destination. The rights and obligations ofLSIM with respect to the Clinical Trial business will be succeeded by LSSI in anabsorption-type split.
(2) Schedule
Approval by the Board of Directors Meeting

June 23, 2023

Approval of the share transfer

Mid-August 2023 (TBD)

agreement/absorption-type split agreement atthe Board of Directors Meeting
Approval of the share transfer/ absorption-Mid-September 2023 (TBD)

type split at the Extraordinary Board ofDirectors Meeting (excluding LSSI)
Effective date of the share

November 1, 2023 (TBD)

transfer/absorption-type split4(3) Outline of the companies involved in the integration (as of March 31, 2023)(i) Share acquisition company
Company name

PHC Holdings Corporation
Development, manufacturing and sales of healthcare

Business

products and services in Diabetes Management, HealthcareSolutions, and Diagnostics & Life Sciences

Establishment

August 2013

Headquarters

2-38-5 Nishishimbashi, Minato-ku, Tokyo

Representative

President, Representative Director and CEO
Shoji Miyazaki

Accounting period

MarchCapital

47,946 million JPY
KKR PHC Investment L.P. 38.30%

Major shareholders
and ratio*

MITSUI & CO., LTD. 17.45%
Life Science Institute, Inc. 9.81%
Panasonic Holdings Corporation 8.99%

LCA 3 Moonshot LP 4.56%*The ratio indicates the number of shares held as a percentage of the total number ofshares issued (excluding treasury stock).
(ii) Share transferring company
Company nameBusiness

LSI Medience Corporation
Clinical testing, diagnostic reagents and instruments, drug
development services, anti-doping testing, etc.

Establishment

April 15, 1975

Headquarters

1-2-3 Shibaura, Minato-ku, Tokyo

Representative

President and CEO, Representative Director,
Haruo Watanabe

Accounting period

March

Capital3,000 million JPY

Major shareholder andratio

PHC Holdings Corporation 100％(iii) Destination company (absorption-type split)
Company name

LSIM Safety Institute Corporation
5

(Trade name to be changed)
Non-clinical testing business for pharmaceuticals, products
Businessfor regenerative treatments, medical devices, agriculturalchemicals, chemical substances, cosmetics, etc.

Establishment

June 23, 2020

Headquarters

1-2-3 Shibaura, Minato-ku, Tokyo

Representative

President, Kaname Takahashi

Accounting period

MarchCapital

10 million JPY

Major shareholder andratio

LSI Medience Corporation 100％(iv) Origin company (absorption-type split)
Company nameBusiness

LSI Medience Corporation
Clinical testing, diagnostic reagents and instruments, drug
development services, anti-doping testing, etc.

Establishment

April 15, 1975

Headquarters

1-2-3 Shibaura, Minato-ku, Tokyo

Representative

President and CEO, Representative Director,Haruo Watanabe

Accounting period

MarchCapital

3,000 million JPY

Major shareholder andratio

PHC Holdings Corporation 100％

4. Others
This restructure will not impact the consolidated business performance since all of thecompanies that will succeed the businesses are wholly-owned-subsidiaries of PHCHD.
Temporary expenses are expected from this restructure, and PHCHD is currently
reviewing the financial impact. If any event that needs to be disclosed arises, PHCHD will
disclose such information accordingly.
End of document

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