May 11, 2016
D.A.Consortium Inc.
Hirotake Yajima, Representative Director & President
4-20-3, Ebisu, Shibuya-ku, Tokyo Japan
Securities Code: 4281 (JASDAQ)
Inquiries: Manager, Investor Relations
Strategic & Planning Headquarters
Phone: +81-3-5449-6300
IREP Co., Ltd.
Shunsuke Konno, Representative Director & President, CEO
2-11-1, Nagatacho, Chiyoda-ku, Tokyo Japan
Securities Code: 2132
(Second Section of Tokyo Stock Exchange)
Inquiries: Atsushi Nagai, Director & CFO
Phone: +81-33596-8700

Announcement of Management Integration through Establishment of a Joint
Holding Company (Joint Share Transfer) by D.A.Consortium Inc. and IREP Co.,Ltd.

Rule 802 Legend
This exchange offer or business combination is made for the securities of a foreign company. The offer is subject todisclosure requirements of a foreign country that are different from those of the United States. Financial statements
included in the document, if any, have been prepared in accordance with foreign accounting standards that may not becomparable to the financial statements of United States companies.
It may be difficult for you to enforce your rights and any claim you may have arising under the federal securities laws,
since the issuer is located in a foreign country, and some or all of its officers and directors may be residents of a foreigncountry. You may not be able to sue a foreign company or its officers or directors in a foreign court for violations of
the U.S. securities laws. It may be difficult to compel a foreign company and its affiliates to subject themselves to a
U.S. court's judgment.
You should be aware that the issuer may purchase securities otherwise than under the exchange offer, such as in open
market or privately negotiated purchases.

D.A.Consortium Inc. (hereinafter referred to as “DAC”) and IREP Co., Ltd. (hereinafter referred
to as “IREP”) agreed on the establishment of joint holding company, D.A.Consortium Holdings
Inc., (hereinafter referred to as “Joint Holding Company”) effective October 3, 2016 (scheduleddate), as wholly owning parent company, subject to approval at the annual shareholders
meeting scheduled on June 27, 2016 by DAC and the extraordinary shareholders meetingscheduled on July 7, 2016 by IREP, through a joint share transfer (hereinafter referred to as
the “Share Transfer”). Today, the board of directors meetings by DAC and IREP have jointly
approved the strategic plan for the Share Transfer. Details are shown as follows:
1. Objective of the Share Transfer
DAC Group is a corporate group comprising DAC and IREP as principal subsidiaries. DAC
Group provides leading services in the domain of internet business such as planning foradvertising transactions, advertising services mainly catering to stocking and selling,technologies related to internet advertising, advertising solutions such as creative andconsulting, and management services on applications for smartphones. Each group company
has been enhancing its specialties and competitiveness and expanding businesses at home
and abroad to create the enterprise value.
DAC has been maintaining close and effective relationships with a full range of internet media
and advertising companies, including the Hakuhodo DY Group as key clients. In so doing, DAC
holds prominent status in the industry catering to sponsors in the arena of both global andnational brands. In recent years, DAC has been cooperating with media companies for thedevelopment and standardization of innovative advertising formats to revitalize advertisingmarkets, focusing on smart device advertising and media display ad network advertising led
by mushrooming markets for animation advertisement, texting services and curation media tomaterialize the expansion and diversification of businesses. Further, DAC has been steppingup efforts to tap into new markets through providing data management platforms by in-housedevelopment to optimize the utilization of effective data for the distribution of advertisements.
In 2002, IREP made a debut billing a search advertising in Japan, formulating businesses in
the area of “supporting internet marketing”. As a strategy to ensure the edge, IREP embraces
the business concept of SEM integrator (specialized SEM agency), differentiating from otheragencies by employing a prominent display ad network to establish a management system forlasting growth. In April 2006, IREP engaged in a capital and business alliance with Hakuhodo
DY Media Partners to expand marketing into the promising national client market on top of
direct marketing. IREP became a consolidated subsidiary in December 2012 through thetender offer by DAC. During the period DAC and IREP cooperated with each other, integrating
the management of listing advertisements, headed by the search advertisement of DAC,
including the Hakuhodo DY Group, into IREP. Consequently, DAC Group and Hokuhodo DY
Group have greatly increased sales of “Performance-based Advertising”. Furthermore, thanks

to the increasing business of direct marketing, IREP has been able to increase its market sharein terms of the volume of listing advertisements on Yahoo! and Google in Japan. On the other
hand, recent years have seen the sea change of business environments, highlighting display
ad network advertisement and going beyond search advertisement. Also advertisement
products on communication media such as Facebook, Twitter, and LINE have been diversified
dramatically. Under these backgrounds, it is a pressing mission for digital marketing agencies
to pursue prescriptions to bolster the line of products on top search advertisement and serve
as a professional group, realizing effective results for a wide range of customers.
The advertisement on the internet has been recording two-digit annual growth. Further, theevolution for digitalization of mass media would ensure the sustainable growth. Today, theglobal dissemination of smart device and the progress of IoT (Internet of Things) helps create
the ground where we come across information and advertisements anywhere 24/7 in our life.
Currently, smart-phone applications catering to multiple needs are available and new
businesses utilizing AI (artificial intelligence） to optimize the quality services for individuals,
have been popping up while global players have been diversifying scope into services in every
aspect of our life. Usage and time with smart devices by internet users has been on the rise,creating huge volume of contents and data. Meanwhile, the technology to assess such data to
be applied for marketing will increasingly evolve in the future. At the same time, the globalized
economy entails global perspectives for marketing activities. On top of that, relevant
technologies to meet with current needs will also be utilized for cross-border services. So wemight face the situation where the promotion of domestic digital marketing is not a viable
solution for survival. As noted above, we assume the market for internet advertisement will betransformed into cross-border competitions due to ongoing technological innovations.
DAC and IREP have been weighing game plans to enhance the enterprise value by effectively
utilizing corporate resources to ensure sustainable growth through nimble response to copewith expanding markets involving unprecedented changes in business environments. As aresult, we have realized that it would be reasonable to maintain rapport with respective
customers, and corporate culture and autonomy to keep competitiveness while integrating
existing technologies and new global areas by streamlining overlapped businesses as muchas practicable to materialize the management integration to play a role as the leader of theindustry. To achieve these objectives, we opted for the business integration by establishingjointly owned holding company rather than the merger to become perfect unitary organization
For successful business integration, it is inevitable for both companies to synchronize relevant
strengths to further share group principles to build up the system to quickly deal with thechanging business climate and to find out solutions for our challenges. For this reason, we
have wound up the plan for the integration through the establishment of joint holding company
to carry out the following: 1) reinforcement for the strategic function of the group, 2) efficient２employment with management resources of the group, and 3) maximization of the value forstakeholders.
1) Reinforcement for the strategic function of the group
We will clarify the business objectives of DAC group and roles of each member company sothat we can pursue the optimization of the group, Also, in doing so, we will reinforce thedecision making function and group strategy for the planning and operating function.
Specifically, Joint Holding Company will specialize in the management of integral businessstrategy to principally come up with business plans from comprehensive perspective while
each operating company promotes respective specialized business through the optimalorganizational structure, including effective integration and reorganization to achievesustainable growth and higher corporate values under collaboration to resolve issues andenhance the growth based on the strategy.
2) Efficient employment with management resources of the group
We will aim to enhance business efficiency by way of effective realignment of management
resources within the group. In other words, we will boost cost efficiency by integrating
corporate functions and administrative divisions into Joint Holding Company and ensure
reasonable allocation by funneling management resources into promising areas under group
strategy. Joint Holding Company will spearhead areas of R&D, global business, and operation
etc. as a common platform of the group so that we can perform rational business management
to improve the profitability of the whole group.
3) Maximization of the value for stakeholders
Under Joint Holding Company with the consolidated strategic function, DAC and IREP will
explore respective specialties. Specifically, while DAC will reinforce the partnership with themedia and advertising companies cultivated since the establishment of the company toprovide optimal services, IREP will strengthen the agency function to offer a variety services
to customers to help solve their challenges for the marketing, and both companies will stepup efforts to aim at further growth. Through this strategy, both companies will makecontributions to the growth of the whole group, creating the synergy effect as well as frontiers
for successful businesses, maximizing the corporate value for all of shareholders, customers,
employees, and local communities.
2. Outline of the Share Transfer(1) Timeline for the Share Transfer
Board of directors meeting to resolve the Share
Transfer (both companies)
３

Wednesday, May 11, 2016

Public announcement for record date ofThursday, May 12, 2016 (scheduled

extraordinary shareholders meeting (IREP)

date)

Record date of extraordinary shareholders

Thursday, May 26, 2016 (scheduled

meeting (IREP)

date)

Shareholders meeting to approve the ShareMonday, June 27, 2016 (scheduledTransfer (DAC)

date)

Extraordinary shareholders meeting to approve

Thursday, July 7, 2016 (scheduled

Share Transfer (IREP)

date)
Wednesday, September 28, 2016

Delisting date (both companies)(scheduled date)

Registration date for incorporation of Joint

Monday, October 3, 2016

Holding Company (effective date)(scheduled date)
Monday, October 3, 2016

Listing date of Joint Holding Company(scheduled date)

Schedule may be changed after consultation of both companies for necessary
procedures or other material issues during the course of the Share Transfer.
(2) Procedure of the Share Transfer
Joint share transfer whereby DAC and IREP become wholly-owned subsidiaries and the
newly incorporated Joint Holding Company becomes the wholly-owning parent company.
(3) Share Allocation Applied to the Share Transfer
Company Name

DAC

IREP

Share Transfer Ratio

1

0.83

Note 1 Details of share allocation applied to the Share Transfer
One common share of Joint Holding Company for one common share of DAC, and 0.83
common share of Joint Holding Company for one common share of IREP will beallocated. However, the above Share Transfer Ratio may be adjusted in case of materialchanges to the conditions for calculating the transfer ratio through the consultation ofboth companies.

The share unit number is scheduled to become 100 shares.
If there is a fraction of less than one share due to the Share Transfer, Joint Holding
Company will pay the relevant shareholder a cash amount corresponding to thefractional share pursuant to Article 234 of the Companies Act of Japan and otherrelevant laws and regulations.

４Note 2 Number of newly issued shares of Joint Holding Company to be delivered through the
Share Transfer (scheduled)
71,367,480 sharesThis number is based on the total number of issued and outstanding shares of DAC(53,442,300 shares as of March 31, 2016) and those of IREP (27,780,000 shares as ofMarch 31, 2016). However, DAC and IREP plan to retire all of their treasury shares, tothe extent practicable, as of the day immediately preceding the effective date of the
Share Transfer. Accordingly, 4,869,900 shares held by DAC as of March 31, 2016 and
316,047 shares held by IREP as of March 31, 2016, have been excluded in thecalculation for the Share Transfer. Because DAC and IREP plan to cancel treasury
shares they repurchase by the day preceding the date of the Share Transfer, to theextent practicable, the number of shares newly issued by Joint Holding Company may
change. The execution of share option for DAC and IREP by the date preceding thedate of the Share Transfer may change the number of shares to be delivered by Joint
Holding Company.

Note 3 Method for shares less than one unit
Newly issued shares by Joint Holding Company allocated to the shareholders of DAC
and IREP will be listed on the TSE. Once the listing is approved, the shares of Joint
Holding Company will be tradable on the TSE. Therefore, shareholders with more than
100 shares of DAC or 121 shares of IREP equivalent to more than 100 shares (shareunit number) are offered liquidity for the shares of Joint Holding Company.
Further, in case the shareholders of DAC and IREP are allocated shares in an amountless than 100 units of Joint Holding Company, shareholders will not be able to sell thesaid shares on TSE or other financial exchanges. Such shareholders may request Joint
Holding Company purchase less-than-share-unit shares or may purchase additional
shares to make share units from Joint Holding Company.

(4) Method of Share Options and Bond with Share Options
With regard to share options issued by DAC and IREP, share options of Joint Holding
Company will be allocated reflecting the contents of the share options and the Share
Transfer Ratio. Both DAC and IREP have not issued bonds with share options.
(5) Dividend of Joint Holding Company
Annual dividend of Joint Holding Company will be determined from comprehensive
viewpoint, including existing dividend policy, dividend scale, and the prospective
performance of Joint Holding Company.

５(6) Dividend of DAC and IREP on the Record Date prior to the establishment of Joint Holding
Company
DAC plans to pay out the dividend of surplus, JPY 12 yen per share, for the year ending
March 31, 2016 and IREP plans to pay out the dividend of surplus, JPY 1.5 yen per share,
for the year ending September 30, 2016, respectively.
(7) Treasury shares and shares of Joint Holding Company allocated to DAC and IREP
DAC and IREP plan to retire shares they hold at present or will purchase prior to theeffective date of the Share Transfer to the extent practicable. Upon the Share Transfer, theshares of Joint Holding Company will be allocated DAC for shares of IREP held by DAC(as of March 31, 2016, 15,823,000 shares) based on the Share Transfer Ratio.
Consequently, DAC will hold shares of Joint Holding Company as wholly-owning company.
As such, relevant shares of Joint Holding Company, including dividend in kind to Joint
Holding Company, will be disposed immediately after the effective date of the Share
Transfer day pursuant to the provisions of the Companies Act of Japan within a reasonable
period.
3. Basis for Calculation of the Share Transfer Ratio(1) Basis for Valuation
To ensure the fairness of the calculation of the Share Transfer Ratio applicable for the Share
Transfer, DAC and IREP decided to request third parties provide opinions respectively. DAC
has appointed Daiwa Securities Co., Ltd. (hereinafter referred to as “Daiwa Securities”) and
IREP has appointed Yamada FAS Co., Ltd. (hereinafter referred to as “Yamada FAS”) to
conduct calculation of the Share Transfer Ratio and received valuation reports.
Daiwa Securities adopted a market valuation method as both DAC and IREP have been
listed on TSE and thus market prices of shares are available while employing a discounted
cash flow method ( hereinafter referred to as “DCF Method“) to integrate the forthcoming
corporate activities into the calculation factors. The results provided by each method areshown below. The ranges of the Share Transfer Ratio indicate the calculation range of IREP
common shares against one DAC common share.
Valuation Method

Valuation range of Share Transfer Ratio

1Market Valuation Method

0.71～0.87

2

DCF method

0.62～0.86

For the market valuation method, the valuation date of May 10, 2016 was adopted and theaverage closing prices of stocks of both companies were analyzed for one-month, threemonth, and six-month periods prior to the valuation date.
６

Further, the profit plan for DAC adopted for the DCF Method by Daiwa Securities isformulated based on the current organization and assumes a large increase in profit overthe previous fiscal year ---during the period from March 2015 through March 2016,
operating profit is expected to increase by around 125% due to the contribution of internetrelated businesses and investment businesses etc. The profit plan for IREP adopted for the
DCF Method by Daiwa Securities is formulated based on the current organization andassumes a large increase in profit over the previous year ---during the period from
December 2017 through December 2018, operating profit is expected to increase by about
31% due to the current improvement of the profit ratio and initiatives for operational
efficiency.
Daiwa Securities, upon the calculation of Stock Transfer Ratio, primarily employed
information furnished by both companies and the information disclosed to the public. For
the utilization of respective information, Daiwa Securities assumed the accuracy andcompleteness of all such information and materials, and did not independently verify suchaccuracy and completeness. Daiwa Securities did not independently value, appraise orassess the assets and liabilities, including any off-balance-sheet assets and liabilities andother contingent liabilities, of both companies and their affiliated companies and did not
engage any third party institution for valuation, appraisal or assessment. The calculation of
Stock Transfer Ratio reflects the information and economic fundamentals as of May 10,
2016. Likewise, Daiwa Securities assumed that the information for the financial projection,
including the profit plan and other relevant information, provided by both companies was
reasonably prepared based on the best estimate and judgment by the management of bothcompanies at the time the relevant information was submitted.
The calculation results of the Share Transfer Ratio submitted by Daiwa Securities do not
express an opinion about the fairness of the Share Transfer.
Yamada FAS adopted a market valuation method as both DAC and IREP have been listed
on TSE and thus market prices of shares are available while employing a DCF Method tointegrate the forthcoming corporate activities into the calculation factors.
Daiwa Securities conducted the calculation of the Share Transfer Ratio, employing themarket valuation method and the DCF Method. The results provided by each method areshown below. The ranges of the Share Transfer Ratio indicate that the calculation range of
IREP common share against one share of DAC common share.

７

Valuation Method

Valuation range of Share Transfer Ratio

1Market Valuation Method

0.71～0.87

2

DCF Method

0.61～0.89

For the market valuation method, the valuation date of May 10, 2016 was adopted and theaverage closing prices of stocks of both companies were analyzed for one-month, threemonth, and six-month periods prior to the valuation date.
The DCF Method determines the enterprise value of DAC by discounting the free cash flow
based on financial forecasts provided by DAC, at a fixed discount rate. The discount rate
ranges from 6.71 percent to 8.21 percent, estimating the debt equity ratio of 1.0 to 6.5 andthe calculation of ongoing value adopted the perpetual growth method with the relevant
growth rate as zero percent. Further, for IREP, the DCF Method determines the enterprisevalue of IREP by discounting the free cash flow based on financial forecasts provided by
IREP, at a fixed discount rate. The discount rate ranges from 7.18 percent to 8.78 percent,estimating the debt equity ratio of 1.0 to 18.4 and the calculation of ongoing value adopted
the perpetual growth method with the relevant growth rate as zero percent.
Further, the profit plan for DAC adopted for the DCF Method by Yamada FAS is formulated
based on the current organization and assumes a large increase in profit over the previous
fiscal year ---during the period from March 2015 through March 2016, operating profit isexpected to increase by around 125% due to the contribution of internet-related businesses
and investment businesses etc. The profit plan for IREP adopted for the DCF Method by
Yamada FAS is formulated based on the current organization and assumes a large increasein profit over the previous fiscal year ---during the period from December 2017 throughDecember 2018, operating profit is expected to increase by around 31% due to theimprovement of the profit ratio and initiatives for operational efficiency.
Moreover, profit plans of both companies factored into the DCF Method are based on thecurrent organizational structures.
Yamada FAS, upon the calculation of the Stock Transfer Ratio, primarily employed
information furnished by both companies (including financial forecasts provided its businessplans) and the information disclosed to the public. For the utilization of respective
information, Yamada FAS assumed the accuracy and completeness of all such informationand materials, and did not independently verify such accuracy and completeness. Yamada
FAS did not independently value, appraise or assess the assets and liabilities, including any
off-balance-sheet assets and liabilities and other contingent liabilities, of both companies
and their affiliated companies and did not did not engage any third party institution forvaluation, appraisal or assessment. Likewise, Yamada FAS assumed that the information
for the financial projection, including the profit plan and other relevant information, provided
８

by both companies was reasonably prepared based on the best estimate and judgment by
the management of both companies at the time the relevant information was submitted.
The calculation result for the Share Transfer Ratio does not express an opinion about thefairness of the Share Transfer.
(2) Details of calculation procedure
As stated above, DAC and IREP requested Daiwa Securities and Yamada FAS,
respectively to conduct the calculation of the Share Transfer Ratio applied to this Share
Transfer and reviewed the result from the relevant third-party institutions. Consequently,
both companies refer to the calculation result and advice, coupled with factors such as
financial condition, status, and projection during the course of discussion for the Share
Transfer Ratio and concluded that the Share Transfer Ratio is fair and beneficial to theshareholders of both companies. As such, today, the Share Transfer Ratio has been
determined and agreed at the board of directors meetings of both companies.
If there is a significant change in the conditions for the calculation, both companies maychange the Share Transfer Ratio through consultation.
(3) Relationship with appraisers
Neither Daiwa Securities, financial adviser for DAC nor Yamada FAS, financial adviser for
IREP are the related parties of DAC and IREP, and have no material interest in the Share
Transfer.
(4) Applications for the listing of Joint Holding Company
DAC and IREP plan to have the new company listed on the TSE. The listing date will be
October 3, 2016. As DAC and IREP will be wholly-owned subsidiaries of Joint Holding
Company through the scheduled Share Transfer, both companies will be delisted from theTSE on September 28, 2016 preceding the listing date of Joint Holding Company.
The date of delisting will be determined by the regulations of the TSE.
(5) Measures to ensure fairness
Since DAC falls under the parent company of IREP, both companies, as noted above (1),(2), and (3), employed an independent third-party appraiser to estimate the Share Transfer.
Ratio and received the calculation result. Both companies discreetly engaged innegotiations and consultations, referring to the results and agreed on Share Transfer Ratio.
Finally each board of directors meeting has resolved the management integration throughthe Share Transfer.
Neither company obtained a written opinion (fairness opinion) to assure the Transfer Ratio
is fair to respective shareholders from financial point of views.
９DAC and IREP appointed the law offices of Mori Hamada & Matsumoto and Nakamura,Tsunoda & Matsumoto, respectively to obtain advice on the process of decision making andother procedures related to the Share Transfer.
(6) Measures to prevent conflict of interests
For IREP, as DAC is a parent company holding 56.97 per cent of IREP shares outstanding
as of September 30, 2015 and Hakuhodo DY Holdings Inc. is also holding 64.81 percent
of IREP shares outstanding as of September 30, 2015 through its subsidiaries Hakuhodo
DY Media Partners Inc. and DAC, from the perspective to prevent conflict of interests, IREP
takes measures as follows in addition to the matters noted above (5).
1 Unanimous approval by directors and opinion of no objection by auditors except directors○

and auditors with special interests
Among the directors of IREP, Mr. Hirotake Yajima, Mr. Masaya Shimada, Mr. Shuichi
Takanashi, and Mr. Masaki Mikami who also assumes directorship of DAC, and Mr. Hiroaki
Kitazume who worked for Hakuhodo, a subsidiary of Hakuhodo DY Holdings, which is theparent company of DAC and IREP, at the time when the negotiations for the Share Transfer
started, have recused themselves from deliberation and resolution of the Share Transfer atthe board of directors meeting of IREP and were not involved in consultations andnegotiations with DAC as a member of IREP to prevent conflict of interests.
At the board of directors meeting of IREP held today, the board of directors, excluding Mr.
Hirotake Yajima, Mr. Masaya Shimada, Mr. Shuichi Takanashi, and Mr. Masaki Mikami to
avoid conflict of interest, unanimously resolved this Share Transfer Plan. Further, amongauditors of IREP, Mr. Tatsuya Daito, who also assumes the directorship of DAC, was not
involved in the deliberation on the Share Transfer to prevent conflict of interests. More, atthe above board of directors meeting, all auditors except Mr. Tatsuya Daito had noobjections with regard to the formulation of the Share Transfer Plan.
2 Receipt of the report from the third-party panel independent from IREP○

Moreover, the board of directors meeting at IREP established a third-party panel to consider
the interests of the minor shareholders of IREP. The third-party panel comprises threecommittee members: Mr. Masanori Sugiyama, outside director of IREP and independent
director stipulated by Article 436, item 2 of Securities Listing Regulations of TSE, without
interest in DAC and the parent companies of DAC, Hakuhodo DY Holdings and its affiliates,
including Hakuhodo DY Media Partners and Hakuhodo, and Mr. Shigeru Nishiyama,
Professor of Waseda Business School and Certified Financial Accountant, and Mr. Naokuni
Naruse, lawyer, Sato Sogo Law Office, likewise without interest in DAC and the parent
companies of DAC, Hakuhodo DY Holdings and its affiliates, including Hakuhodo DY Media
Partners and Hakuhodo. The board of IREP consulted with the third-party panel concerning
the resolution for the Share Transfer in terms of i) purpose of management integration, ii)
１０procedures for the negotiation process, and iii) the fairness of the Share Transfer Ratio etc.
pertinent to the disadvantage of the minority shareholders of IREP, excluding the parent
company （hereinafter referred to as “Minority Shareholders”）.
The third-party panel held five meetings from March 22, 2016 through May 10, 2016,
discreetly deliberating the above agenda. During the course of consideration, the third-party
panel obtained the calculation of the Share Transfer Ratio from Yamada FAS, independent
financial adviser, while being furnished the information from IREP about the backgrounds
and objective for the Share Transfer, the organizational system to consider and negotiate
the Share Transfer Ratio, the transition of negotiations and decision making processes, ona series of conditions for the Share Transfer, including the Share Transfer Ratio, and thecontents of the advice from the legal adviser Nakamura, Tsunoda & Matsumoto Law Office.
Further, the third-party panel conducted a question-and-answer session with DAC about
the backgrounds and objective for the Share Transfer, the organizational system to consider
and negotiate the Share Transfer Ratio etc. Under such circumstances, on May 10, 2016
the third-party panel submitted a report to the board of directors of IREP. The content of thereport includes (a) about i) noted above, there are no special circumstances to deem that
the Share Transfer does not contribute to an increase of its corporate value or that theobjective for the Share Transfer is not legitimate for the minority shareholders of IREP, (b)about ii) noted above, as measures adopted by the board of directors meeting to ensure
the fairness of decision making and prevention of conflict of interests concerning the Share
Transfer, there are no special circumstances to deem that procedures taken throughnegotiations are not legitimate, (c) about iii) noted above, the third-party panel reviewed theallocation ratio applied to the Share Transfer based upon the calculation result of the Share
Transfer Ratio by Yamada FAS and relevant information and found no special
circumstances to deem that the share transfer ratio (1 to 0.83) is not reasonable for theminority shareholders of IREP, and (d) in the light of items (a) through (c), the third-party
panel considered the impact on minority shareholders by the Share Transfer and concluded
that the resolution by the board of directors to implement the Share Transfer does not goagainst the interests of minority shareholders of IREP.
4. Profile of Relevant Parties to Share Transfer(1)(2)

Company

D.A.Consortium Inc.

IREP Co., Ltd.

Location of

4-20-3, Ebisu, Shibuya-ku, Tokyo,

2-11-1, Nagatacho, Chiyoda-ku,

RegisteredJapan

Tokyo, Japan

Hirotake Yajima, Representative

Shunsuke Konno, Representative

Director & President

Director & President, CEO

Head Office
Name and Title(3)

ofRepresentative

１１

(4)

(5)
(6)

(7)

(8)

(9)

(10)
(11)

Principal
Business

Paid-in Capital
Date of
Incorporation
SharesOutstanding
Fiscal YearEnd

Providing services for listing

as of March 31, 2016as of September 30, 1015

December 2, 1996

November 17, 1997

53,442,300 shares (including

27,770,000 shares (including

treasury share)treasury share)

as of March 31, 2016as of September 30, 1015

March

September

Number of

1,880

Employees(including IREP employees)(consolidated)

as of March 31, 2016

Major
Customers
Major Banks

Major
Shareholders(12)

Purchase and sales ofadvertisement space for digital
network space such as the internet
etc.
JPY 4,031 million

and Share
Holding Ratio(excepting
treasury share)

Hakuhodo DY Media Partners Inc.

advertisement, SEO and otherperipheral services etc.
JPY 550 million

523 as of September 30, 1015
D.A.Consortium Inc.
Recruit Holdings Co,. Ltd.

The Bank of Tokyo-Mitsubishi UFJ,Ltd.

The Bank of Tokyo-Mitsubishi
UFJ, Ltd.

Hakuhodo DY Media Partners Inc.
43.54%
Hakuhodo Inc.
8.42%
Japan Trustee Services Bank, Ltd.
(trust account)
2.11%
Tokyu Agency Inc.
1.87%
MSCO CUSTOMER SECURITIES
1.46%
The Master Trust Bank of Japan,
Ltd. (trust account)
1.44%
Morgan Stanley MUFG Securities
Co., Ltd.
1.18%
Goldman Sachs International
0.89%
BNYM SA/NV FOR BNYM FOR
BNYM GCM CLIENT ACCTS M
ILM FE
0.80%
Rakuten Securities, Inc.
0.61%

D.A.Consortium Inc.

56.97%

Masayuki Takayama

11.30%

as of March 31, 2016

１２

Hakuhodo DY Media Partners Inc.
7.83%
Toshi Ishuin
1.67%
The Master Trust Bank of Japan,
Ltd. (trust account)
0.99%
Osamu Fujiwara
0.75%
SBI Securities Co., Ltd.

0.38%

Kenji Aida

0.28%

Taketeru Nihon

0.25%

Mayumi Hirota

0.22%

as of September 30, 2015

(13)Relationship between Relevant Parties
Capital

DAC owns 56.97 % of IREP shares outstanding.

Personnel

Four directors have concurrent positions for both companies and one

Relationshipdirector at DAC has a concurrent position as auditor for IREP.

Transactional

Transactions between DAC and IREP involve the sales and purchase ofRelationshipinternet advertisements.

Status ofrelationshipwith related

DAC is a parent company of IREP, thus falls under the related party.

parties(14)

Operating Results and Financial Condition for Latest Three Fiscal Year End(Unit: JPY million, except ones in yen)
DAC

Consolidated Net
AssetsConsolidated Total
Assets

IREP

March

March

March

September

September

September

2014

2015

2016

2013

2014

2015

20,04522,99825,437

3,510

3,940

4,237

37,49943,89754,252

11,63812,501

14,820275.98313.35343.95127.94138.86

149.61

105,335

117,463

144,980

47,39053,61558,023

1,980

2,246

5,062

950

512

714

2,017

2,518

4,974

967

509

737

2,022

1,050

2,026

584

314

319

41.66

21.64

41.73

21.35

11.47

11.63

6

8

12(*)

3

1.5

1.5

Consolidated Net
Asset per share(yen)Consolidated Net
Sales
Consolidated
Operating Income
Consolidated Ordinary
IncomeConsolidated Net
IncomeConsolidated Net
Income per share(yen)
Annual Dividend pershare (yen)* Annual dividend as of March 2016 is planned to be paid and it is finally decided at general shareholders
meeting to be held on 27 June 2016.

１３

5. Profile of Joint Holding Company to be established by the Share Transfer(1)Company

D.A.Consortium Holdings Inc.

Location of(2)

Registered Head

4-20-3, Ebisu, Shibuya-ku, Tokyo Japan

OfficeHirotake Yajima, Representative Director and President
Shunsuke Konno, Director, Executive Vice President
Akihiko Tokuhisa, Director
Tatsuya Daito, Director
Masaya Shimada, Director
Atsushi Nagai, Director
Prospective List
(3)

of Representativeand Directors

Masaki Mikami, Director
Masato Igarashi, Director
Naoki Nozawa, Director
Michinari Nishimura, Outside Director
Iwao Aso, Outside Director
Hisaharu Terai, Corporate Auditor
Shiro Morishima, Outside Corporate Auditor
Masanori Nishioka, Corporate Auditor
Hiroshi Mizukami, Outside Corporate Auditor
Akira Otsuka, Outside Corporate Auditor(4)

Principal
Business

Management of subsidiaries and all linked or related businesses(5)Paid-in Capital

JPY 4,000 million(6)

Fiscal Year End

March

(7)

Net Assets

Yet to be determined(8)

Total Assets

Yet to be determined

6. Overview of Accounting Treatment
This Share Transfer will fall under “common control transaction etc.” pursuant to “AccountingStandard for Business Combination”: Corporate Accounting Standard No. 21 issued by
Accounting Standards Board of Japan on September 13, 2013. As detailed accounting
procedure has not been determined, we are unable to estimate the relevant amount at present.
We give notice of the amount as soon as it is fixed.
7. Prospects
This Share Transfer constitutes the transfer establishing Joint Holding Company as wholly
owning parent company of DAC and IREP as wholly owned subsidiaries. As such, shares of
Joint Holding Company will be listed on the Standard Section 2 of the TSE on October 3, 2016,
the effective date for the Share Transfer through the so-called technical listing. About the listing,
１４

there is a possibility that the TSE will announce that common shares of IREP will be designatedas an issue in a grace period for ceasing to be a substantial surviving company due to a merger,
etc. from the effective date of the Share Transfer. In such cases, we will notify the facts without
delay.
During the grace period, listing of shares of Joint Holding Company will be maintained. If Joint
Holding Company meets the standard for the new listing within three years, starting from thelisting date, October 3, 2016 through March 31, 2020, the grace period related to the delisting
will be removed. Furthermore, if within three-year grace period, Joint Holding Company isunable to meet the listing standard of TSE, there is a possibility that shares of Joint Holding
Company will be listed on the JASDAQ Securities Exchange.
Joint Holding Company plans to go through the initial listing examination by the TSE to become
eligible for listing. Prior to the effective date of the Share Transfer, Joint Holding Company aims
to meet the relevant standards, so we will enhance efforts to be qualified to be able to avoid
the grace period.
As IREP has been a consolidated subsidiary of DAC, we estimate the impacts on theperformance of DAC and IREP by the Share Transfer would be insignificant.
8. Matters related to Transactions with Controlling Shareholders(1) Compliance with the status under the “Guideline for the Policies for the Protection of
Minority Shareholder in Cases of Transactions with the Controlling Shareholder”
As DAC is controlling shareholder holding 56.97% of IREP shares outstanding, this Share
Transfer falls under the category of transaction with the controlling shareholder.
IREP made public a corporate governance report on January 19, 2016. The report includes
the “Guideline for the Policies for the Protection of Minority Shareholder in Cases ofTransactions with the Controlling Shareholder”, which stipulates in case of transactions withthe parent company, terms and conditions principally shall be correspond to market levels.
As for internet advertisements, IREP negotiated conditions with the parent company,
presenting an estimate reflecting market price and the cost of sales ratio, in order to makereasonable judgements for fair and clear transactions.
In fact, we recognize that IREP has been under circumstances whereby IREP has beenable to maintain autonomy to do businesses with the parent company. For the preventionof conflict of interests, relevant transactions have been approved by the board of directors
excluding the board members from DAC who hold special interests.

１５

As for the Share Transfer, IREP has been keeping the independency of management from
DAC and as noted above 3. (5) and (6), taking measures to ensure fairness and protection
against conflict of interests, IREP has determined the Share Transfer Ratio, planning tocomplete the Share Transfer.
Finally, through above measures, we believe that the Share Transfer by IREP complies withthe “Guideline for the Policies for the Protection of Minority Shareholder in Cases ofTransactions with the Controlling Shareholder”(2) Matters to ensure measures for fairness and protection against conflict of interests
As noted (1) Compliance with the status under the “Guideline for the Policies for theProtection of Minority Shareholder in Cases of Transactions with the Controlling
Shareholder”, this Share Transfer falls under the category of transaction with the controllingshareholder. As such, IREP concluded that it shall take measures to ensure fairness andprotection against conflict of interests and at the board of directors meeting discreetly
discuss and consider the various conditions of the Share Transfer. Furthermore, IREP madethe decision, taking measures noted above 3. (5) and (6) to ensure fairness and protection
against conflict of interests.
(3) Summary of the opinion by the party independent from controlling shareholder
2 Receipt
For details, please refer to above 3. (6) Measures to prevent conflict of interest ○of the report from the third-party panel independent from IREP.

(Reference)
Consolidated Financial Forecast released on May 11, 2016 and Financial Result of DAC(Unit: JPY million)
Consolidated

Consolidated

Consolidated

Net Income

Sales

Operating

Ordinary Profit

Attributable toProfitParentCompany

Financial Forecast
March 2017
Financial Result
March 2016

170,000

5,100

5,000

2,100

144,980

5,062

4,974

2,026

１６

Consolidated Financial Forecast released on March 30, 2016 and Financial Result of IREP
(Unit: JPY million)
Consolidated

Consolidated

Consolidated

Net Income

Sales

Operating

Ordinary Profit

Attributable toProfitParentCompany

Financial Forecast

76,0001,600

September 2016

～77,000～1,70058,023

714

Financial Result
September 2015

１７

－
737

900
～1,000319