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.

October 26, 2023
ARE Holdings, Inc
Tomoya Higashiura, President & CEO(Code: 5857, Tokyo Stock Exchange - Prime Market)
Yoko Yanagida, Head of Corporate Communications(Phone: +81-3-6270-1833)

Company Name:
Representative:
Contact:

Notice on Conclusion of Basic Agreement on Share Exchange between
Japan Waste, Our Consolidated Subsidiary, and Renatus Co.,LtdWe hereby announce that, at a meeting of its Board of Directors held on October 26, 2023, ARE Holdings, Inc.
(hereinafter the "Company") resolved to enter into 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 owning parent company and Japan Waste Corporation (hereinafter “JapanWaste”) would become the wholly owned subsidiary company. The basic agreement was concluded as of thesame day.
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, byitself or through its subsidiaries, investment-related services such as research and offering of investment
opportunities and development 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.
Japan Waste, which was established after the reorganization in April this year, has a large number of public andprivate customers on a nationwide business network from Hokkaido to Okinawa, which, when integrated withRenatus’ large and efficient waste treatment facilities in the Tokyo, Chubu, Kinki and Hokuriku areas, will expect
to generate tremendous synergy. Furthermore, with the tag line of “Think Circular”, Japan Waste will deepen
cooperation between the Company’s precious metals recycling business and Renatus’ industrial waste treatment
business, thereby providing an advanced one-stop service to major waste generators as a key axis of veins in thecircular economy. Moreover, prior to the execution of the Share Exchange, the Company will establish a newwholly owned subsidiary, Waste System Japan Corporation (hereinafter “WSJ”), which will take over theEnvironmental Preservation Business of the Company. By having WSJ hold 32% of the shares of Renatus to beacquired after the execution of the Share Exchange, and at the same time, by categorizing DXE Corporation, asubsidiary engaged in the environmental DX business, under the umbrella of WSJ, the Company will have a planto expand sales of digital solutions for industrial waste treatment practices based on collaboration with Renatus,
one of the largest players in the industry. Through these efforts, the Company is committed to building an industrial
waste treatment business and related businesses with superior social value, with the aim of maximizing its
corporate value.
In order to achieve the purpose of the Share Exchange, Tomoya Higashiura, Representative Director, President
and CEO of the Company, will assume the position of the Chairman of Renatus, and Hiroyuki Nakanishi,
Representative Director and President of Japan Waste, will be assigned to a Director of Renatus. The parties willcontinue discussions toward the execution of a final share exchange agreement (hereinafter the “Share ExchangeAgreement”). For your reference, Renatus is planning to pursue an initial public offering. In the event the listingis achieved, the Company will continue to hold Renatus’ shares through WSJ and benefit from the value derived
by its growth, as a shareholder of the entity that forms a mutually supportive relationship with the Company.
12. Overview of the Share Exchange(1) Schedule of the Share Exchange(1)Date of Board’s resolution on theconclusion of basic agreement

October 26, 2023

(2)

Date of conclusion of basic agreement

October 26, 2023

(3)

Date of Board’s resolution on
conclusion of Share Exchange
Agreement
Date of conclusion of Share Exchange
Agreement
Date of approval of Share Exchange byGeneral Meeting of Shareholders
Effective date of Share Exchange

(4)
(5)
(6)

End of February 2024 (subject to change)
End of February 2024 (subject to change)
End of March 2024 (subject to change)
End of March 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 for 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
owning parent 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
The share exchange ratio will be determined in the Share Exchange Agreement upon consultation among therespective parties to the Share Exchange based on the results of due diligence and calculations by a third-partyappraiser.
(4) Handling of share options and bonds with share options in connection with the Share ExchangeThis column is not applicable to Japan Waste, which will become a wholly owned subsidiary through the ShareExchange, has not issued any share options or bonds with share options.
3. Overview of the parties to the Share Exchange(1) Overview of the wholly owning parent company resulting from the Share Exchange (Renatus)
(1)

Name

Renatus Co., Ltd(2)

Address

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

Job title and name ofrepresentative

Hideaki Sakurai, President and Representative Director(4)

Description of business(5)

Share capital

(6)
(7)

Date of establishment
Major shareholders andvoting right ratios

To hold domestic and foreign companies’ shares; support their businessactivities; and provide supervision and control over them by providing
management instructions
300,025,000 yen
August 18, 2023
Harmony LLP, 71%2

(8)Relationship between
the listed company andthe relevant company

Capital relationship

Not applicable

Personnel relationshipNot applicable

Business relationship

Not applicable

Related party relationship

Not applicable(2) Overview of wholly owned subsidiary resulting from a share exchange (Japan Waste)(1)

NameJapan Waste Corporation(2)

Address

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

Job title and name ofrepresentative
Description of business(5)

Share capital

4,480,817,500 yen(6)

Date of establishment

April 20, 1964

(7)

Major shareholders andholding ratios

ARE Holdings, Inc. 100%.

(3)

Hiroyuki Nakanishi, Representative Director, PresidentCollection, transportation, and intermediate treatment of industrial waste

Capital relationshipA wholly owned subsidiary of the Company

Directors and Corporate Officers of theCompany concurrently serve as officers of therelevant company.
(8)listing company and theThe Company and the relevant company haverelevant company
certain business relationships such as theBusiness relationshipconclusion of management guidance agreement
and real estate leasing.
(9) Consolidated operating results and consolidated financial position of the relevant company
for the past three years
As of/Fiscal year ended
March 2021
March 31, 2022
March 31, 2023
Relationship between the Personnel relationshipNet assets

24,559 million yen(30,396 million yen)

31,362 million yen(37,460 million yen)

41,473 million yen(47,904 million yen)

Total assets

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

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

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

677.42 yen

865.07 yen

1,143.95 yen

Net sales

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

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

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

Operating profit

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

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

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

Ordinary profit

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

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

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

Net income

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

445.82 yen

349.98 yen

Net assets per shareNet income per share*361.34 yen
416.50 yen
137.91 yen
Dividends per share
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 withsubsidiaries' figures are shown in the parentheses. Furthermore, effective as of April 1, 2023, the relevant
company transferred its rights and obligations associated with the precious metal recycling business,3

precious metal refining, manufacturing, and sales business to the Company’s wholly owned subsidiarythrough a company split. Therefore, the above shows non-consolidated management ratios before thecompany split.
4. Circumstances after the Share Exchange
Wholly owning parent company resulting from a share exchange
(1)

Name

Renatus Co.,Ltd(2)

Address

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
Not finalized yet(6)Fiscal year-end

December 31(7)Net assets

Not finalized yet(8)Total assets

Not finalized yet

5. Future outlook
Japan Waste will be excluded from our consolidated subsidiaries and Renatus will become an equity-method affiliate of
the company once executed the Share Exchange Agreement. The impact of the Share Exchange on the Company’s
consolidated financial performance is currently under examination. Where any matters to be disclosed arise,announcements shall be made in a swift manner.

- End of document -4