TRANSLATION FOR REFERENCE PURPOSE ONLYThis notice has been translated from the original Japanese text of the timely disclose statement and is for reference purpose only.
In the event of any discrepancy between the original Japanese and this translation, the Japanese text shall prevail.

February 29, 2024
Company Name:
Representative:

ARE Holdings, Inc.
Tomoya Higashiura, President & CEO(Code: 5857, Tokyo Stock Exchange - Prime Market)

Contact:

Yoko Yanagida, Head of Corporate Communications
Corporate Planning & Communications Department(Phone: +81-3-6270-1833)

Notice on Share Exchange between Japan Waste, Our Consolidated Subsidiary, and Renatus Co., Ltd., andChange of Status of a Specified Subsidiary

ARE Holdings, Inc. (hereinafter the “Company”) hereby announces that, as stated in the “Notice on Conclusion of Basic
Agreement on Share Exchange between Japan Waste, Our Consolidated Subsidiary, and Renatus Co., Ltd.” dated October
26, 2023, the Company concluded a basic agreement with Renatus Co., Ltd. (hereinafter “Renatus”) and J-STAR NO.5-A,
LP to conduct a share exchange (hereinafter the “Share Exchange”) in which Renatus would become the wholly owningparent company, and our consolidated subsidiary, Japan Waste Corporation (hereinafter “Japan Waste”), would become thewholly owned subsidiary company, as of the same day. We also announce that the Company concluded a basic contract on
the Share Exchange between Japan Waste and Renatus today. In addition, Japan Waste concluded a share exchange
agreement (hereinafter the “Share Exchange Agreement”) with Renatus.
Furthermore, as a result of the Share Exchange, Japan Waste will no longer be a specified subsidiary of the Company,
and Renatus will become an equity-method affiliate of the Company by the acquisition of 32% of the shares of Renatus by
the Company.
1. Purpose of the Share Exchange
Renatus was established for the purpose of balancing waste management business and global environmental measuresand is a holding company forming a group of companies owned by a fund for which J-STAR Co., Ltd. provides, by itself
or through its subsidiaries, investment-related services such as research and offering of investment opportunities anddevelopment of investees. This group of companies includes SINCERE HOLDINGS CO., LTD., SNK HOLDINGS CO.,LTD., Sanwa Group Corporation Co., Ltd., and Harita Metal Co., Ltd.
With the Share Exchange, Japan Waste’s large number of customers on a nationwide business network and Renatus’
large and efficient waste treatment facilities will be integrated to achieve significant synergies. Based on the collaboration
between the Company’s DX business in the environmental preservation area, and Renatus’ industrial waste treatment
business, we will enhance cooperation with major manufacturers to provide services that contribute to decarbonization of
the Japanese industries and society.
To further increase our corporate value, the Company will maintain the Environmental Preservation Business andstrive for its development through above stated initiatives.

12. Overview of the Share Exchange(1) Schedule of the Share Exchange(1)(2)

Date of Board’s resolution at the Company
Date of conclusion of Basic Contract on the Share
Exchange

February 29, 2024

(3)
(4)

Date of Board’s resolution at Japan Waste
Date of conclusion of Share Exchange Agreement

February 29, 2024
February 29, 2024

(5)

Date of approval of Share Exchange by General Meetingof Shareholders (Japan Waste)
Date of approval of Share Exchange by General Meetingof Shareholders (Renatus)
Effective date of Share Exchange

(6)
(7)

February 29, 2024

March 15, 2024 (subject to change)
March 25, 2024 (subject to change)
March 31, 2024 (subject to change)

Note: The schedule above is subject to change upon consultation and agreement among the parties concerned, if necessary,
due to the progress of the procedures for the Share Exchange or other reasons.
(2) Method of the Share Exchange
The Share Exchange will be carried out through a share exchange in which Renatus will become the wholly owningparent company resulting from a share exchange and Japan Waste will become the wholly owned subsidiary company
resulting from a share exchange.
(3) Allotment of shares in the Share Exchange

Share Exchange Ratio
Number of shares to be allottedthrough the Share Exchange

Renatus(Wholly owning parent company
resulting from a share exchange)

Japan Waste(Wholly owned subsidiary company
resulting from a share exchange)

1

0.090913243389537

Renatus’ common stocks: 3,296,000 shares (subject to change)(Note 1) 0.090913243389537 shares of the common stock of Renatus will be allotted to a share of the common stock ofJapan Waste.
(Note 2) 3,296,000 shares of common stock of Renatus to be disposed of through the Share Exchange will be allotted to
the Company.
(Note 3) In case fractional shares are included in the allotted to be delivered in the Share Exchange, Renatus shall process
them in accordance with the provisions of Article 234 of the Companies Act and other relevant laws andregulations.
(Note 4) Renatus is to conduct a 1-to-17 share split of its common stocks by the effective date of the Share Exchange. The
above-stated allotment of shares in the Share Exchange and the number of shares to be delivered through the
Share Exchange assumes the share split to become effective.
(4) Handling of share options and bonds with share options in connection with the Share ExchangeThis is not applicable to Japan Waste, which has not issued any share options or bonds with share options.

23. Grounds for details of allocation in the Share Exchange(1) Grounds and reasons for details of allocation
To ensure the fairness and appropriateness of the calculation of the share exchange ratio stated in above “2. (3) Allotmentof shares in the Share Exchange” used for the Share Exchange (hereinafter the “Share Exchange Ratio”), the Company and
Renatus requested calculation of the Share Exchange Ratio by a third-party appraiser independent from the Company,
Japan Waste, and Renatus. The Company selected KPMG FAS Co., Ltd. (Hereinafter “KPMG FAS”) as the third-party
appraiser.
The Company and Renatus referenced the results of the Share Exchange Ratio calculation submitted by their respective
third-party appraisers, carefully reviewed information including the results of mutual due diligence, and comprehensively
considered factors including the status of finances, assets, and future outlook of Japan Waste and Renatus, and engaged in
multiple careful discussions and negotiations. Consequently, the Company concluded that the Share Exchange Ratio iswithin the range calculated by KPMG FAS as stated in (2)(ii) below and is at a fair and appropriate level. Therefore, theCompany will apply the Share Exchange Ratio to the Share Exchange.
Provided, however, the Share Exchange Ratio may be revised subject to consultation and agreement among the parties
in accordance with the Share Exchange Agreement in case significant changes occur to various assumptions for the
calculation.
(2) Matters concerning the calculation(i) Name of the appraiser and relationship with the Company, etc.
The Company’s third-party appraiser, KPMG FAS, is an appraiser independent from the Company, Japan Waste, andRenatus, and does not have related party relationship with the Company, Japan Waste, or Renatus, and does not have any
material interest to be disclosed in respect of the Share Exchange.
(ii) Calculation
KPMG FAS analyzed the financial information of Japan Waste and Renatus and the terms and conditions of the Share
Exchange, and considering that Japan Waste and Renatus are non-listed companies and do not have market share prices,adopted the discounted cash flow method, which calculates value based on the future cash flow of the business (hereinafter
the “DCF Method”) and comparable companies analysis method (hereinafter the “CCA Method”) , which calculates value
by referencing the share price of comparable listed companies, for the calculation of the Share Exchange Ratio. The resultsof the ratio of allocation of Renatus common stocks to one share of Japan Waste common stock under each valuation
method are stated below.
Calculation Method

Share Exchange Ratio Calculation Result

DCF Method
CCA Method0.0391～0.10078
0.0563～0.1087

The underlying business plans of Japan Waste and Renatus used by KPMG FAS in the DCF method for calculating thevalue of shares do not expect a significant increase or decrease in profits in any of the business years. Furthermore, thebusiness plans do not assume the implementation of the Share Exchange.

34. Overview of the parties to the Share Exchange(1) Overview of the wholly owning parent company resulting from the Share Exchange (Renatus)
(1)
(2)
(3)
(4)
(5)
(6)

Name
Address

Renatus Co., Ltd.
6F, Shin Kokusai Building, 3-4-1 Marunouchi, Chiyoda-ku, Tokyo

Job title and name of
Hideaki Sakurai, President and Representative Director
representative
To hold domestic and foreign companies’ shares; support their business activities;
Description of business and provide supervision and control over them by providing management
instructions.
Share capital
100,000,000 yen
Date of establishment
Issued and outstanding
sharesAugust 18, 2023

(8)

As of/Fiscal year ended(9)

Number of employees(10)

Major business partners

December 31
1,392 (consolidated)(as of December 31, 2023)
Not applicable(11)

Core banks(12)

Major shareholders andholding ratios

(7)

(13)

Relationship between
the listed company andthe relevant company

906,000 (as of February 29, 2024)

Sumitomo Mitsui Banking Corporation, Kiraboshi Bank, Ltd., Aozora Bank, Ltd.,
Resona Bank, Limited
The Green Circle, LP: 24.45%
Flag Holdings, LP: 23.06%
Other shareholders: 52.49%
Capital relationship
Not applicable
Personnel relationship
Business relationship

Not applicableNot applicable

Related party relationship

Not applicable

Consolidated operating
results and consolidated(14) financial position of the Not applicablerelevant company forthe latest business year
(Note 1) Renatus is to conduct a 1-to-17 share split of its common stocks by the effective date of the Share Exchange.
(Note 2) As Renatus was established on August 18, 2023, business performance and financial status of its first fiscal year
have not confirmed yet.
(2) Overview of the wholly owned subsidiary resulting from the Share Exchange (Japan Waste)
(1)
(2)

Name
Address

Japan Waste Corporation
21, Uozakihama-machi, Higashinada-ku, Kobe-shi, Hyogo Prefecture(4)

Job title and name ofrepresentative
Description of businessCollection, transportation, and intermediate treatment of industrial waste(5)

Share capital

4,480,817,500 yen(3)Hiroyuki Nakanishi, Representative Director, President

4

(6)

(8)

Date of establishment
Issued and outstanding
shares
As of/Fiscal year ended(9)

Number of employees(10)

Major business partners(11)Core banks
Major shareholders andholding ratios

(7)

(12)

April 20, 1964
36,254,344
March 311,094 (consolidated)(As of March 31, 2023)
Government agencies, schools, hospitals, research institutions, corporations, etc.
Not applicable
ARE Holdings, Inc.: 100%
Capital relationship

(13)

(14)

A wholly owned subsidiary of the Company
Directors and Corporate Officers of the Company
Personnel relationshipconcurrently serve as officers of the relevant
company.
Relationship between the
The Company and the relevant company havelisting company and thecertain business relationships such as therelevant company
Business relationshipconclusion of management guidance agreement
and real estate leasing.
Japan Waste is a consolidated subsidiary of theCompany. The Company and Japan Waste have a
Related party relationshiprelated party relationship.
Consolidated operating results and consolidated financial position of the relevant company for the past three years
As of/Fiscal year ended

Net assets
Total assets
Net assets per share
Net sales
Operating profit
Ordinary profit
Net income
Net income per share
Dividends per share∗

March 2021
24,559 million yen(30,396 million yen)March 2022
31,362 million yen(37,460 million yen)March 2023
41,473 million yen(47,904 million yen)

109,710 million yen(116,193 million yen)
677.42 yen

116,591 million yen(123,106 million yen)865.07 yen

109,183 million yen(116,161 million yen)
1,143.95 yen

141,168 million yen(144,533 million yen)

174,787 million yen(178,094 million yen)

276,541 million yen(280,400 million yen)

19,414 million yen(20,004 million yen)
19,658 million yen(20,218 million yen)

22,169 million yen(22,594 million yen)
22,018 million yen(22,412 million yen)

17,433 million yen(17,972 million yen)
17,448 million yen(17,954 million yen)

13,373 million yen(13,734 million yen)

16,162 million yen(16,424 million yen)

12,688 million yen(13,021 million yen)

368.88 yen
361.34 yen

445.82 yen
416.50 yen

349.98 yen
137.91 yen

While the relevant company has subsidiaries, it does not provide consolidated management indicators. Accordingly,
the above shows non-consolidated management indicators, and simple totals combined with subsidiaries’ figures areshown in parentheses. Furthermore, effective as of April 1, 2023, the relevant company transferred its rights andobligations associated with the precious metal recycling business, precious metal refining, manufacturing, and sales
business to the Company’s wholly-owned subsidiary through a company split. Therefore, the above shows nonconsolidated management indicators before the company split.

55. Circumstances after the Share Exchange
Wholly owning parent company resulting from the Share Exchange
(1)
(2)

Name
Address

Renatus Co., Ltd.
6F, Shin Kokusai Building, 3-4-1 Marunouchi, Chiyoda-ku, Tokyo(3)

Job title and name ofrepresentative

President and Representative Director, Hideaki Sakurai(4)

Description of business(5)

Share capital

To hold domestic and foreign companies’ shares; support their businessactivities; and provide supervision and control over them by providing
management instructions
100,000,000 yen

(6)
(7)

As of/Fiscal year ended
Net assets

December 31
Not finalized yet(8)

Total assets

Not finalized yet

6. Future outlook
Due to the Share Exchange, Japan Waste will be classified as discontinued operations from the fourth quarter of the fiscal
year ending March 2024. The impact of the Share Exchange on the Company’s consolidated financial performance for the
fiscal year ending in March 2024 is expected to be the decreases in revenue and operating profit from continued operations
by approximately 16,500 million yen and 3,200 million yen, respectively. Share of profit (loss) of investments accounted
for using equity method of Renatus Co., Ltd. will be reported as part of operating profit (loss) from the fiscal year ending
March 31, 2025. There is no change in business segments from the Share Exchange.
Please refer to the “Notice of Revision to Financial Forecast for the Year Ending March 31, 2024” released today.
- End of document -6