October 27, 2015
AEON DELIGHT CO., LTD.

Tender Offer for Hakuseisha CO., LTD.
Aims to Consolidate and Reorganize the Industry

At the Board of Directors Meeting held today, AEON DELIGHT CO., LTD. approved a resolution to conduct atender offer to purchase the stock of Hakuseisha CO., LTD., (hereafter “Hakuseisha”) which is an affiliate of J.
FRONT RETAILING Co., Ltd.
Hakuseisha started operations 60 years ago and is a pioneer in the provision of maintenance, security,
cleaning and other building services. Cleaning services for department stores, including the Tokyo store ofDaimaru Matsuzakaya Department Stores Co., Ltd., is the primary business. With decades of experience inthis market, Hakuseisha has the expertise needed to supply consistently high-quality services.
In 1979, trading of Hakuseisha stock started on the over-the-counter market. In the following years, thecompany worked even harder on compliance activities and on training programs for employees.
AEON delight is a comprehensive facility management services organization as a core company in the AEONGroup. The company provides cleaning, security, equipment management and many other services to insideand outside the AEON Group. AEON delight was the first in its industry to start overseas operations. Thereare currently operations in China, Malaysia and Vietnam.
A major change has been taking place in the nature of Japan’s cleaning services market, which is part of thelarger building maintenance sector where both AEON delight and Hakuseisha operate. Originally, cleaning
focused primarily on keeping buildings attractive. But the outbreak of new influenza strains and otherinfectious diseases as well as the issue of fine particle (PM 2.5) and other air contamination has alteredcustomers’ cleaning requirements. As a result, the cleaning market has expanded to become a market forhygiene and cleaning services. This includes disinfecting services and technologies to remove dust from theair. In this field, Hakuseisha has more than 20 years of experience in clean room cleaning services that
require keeping microscopic particles below prescribed levels.
AEON delight views the current business climate as an opportunity for growth. There have been substantial
investments in employee training facilities, research programs and other activities. In addition, there are moresales activities targeting hospitals and other medical facilities. Overseas, AEON delight has used knowledge
gained from providing high-quality services in Japan to establish alliances and joint ventures with prominentcompanies in order to build a business foundation. The aim is to grow even faster by strengthening regional
networks. AEON delight is also seeking opportunities to acquire companies in its industry or form alliances. Asa leading company in the building services industry, AEON delight is playing an active role in measures toconsolidate and realign the industry.
Japan’s building cleaning services industry is still has a large number of companies and is highly competitive.
To succeed during the changes taking place in the operating environment, AEON delight believes that it must
become a larger organization by having major companies work together across a diverse array of businessactivities. This is the thinking behind the decision to conduct the Hakuseisha tender offer.

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AEON delight plans to retain Hakuseisha’s autonomy and self-reliance in order to take full advantage of thecompany’s outstanding organization. In addition, the expertise and technologies of the two companies will beshared to build an even more powerful framework of operations. These actions are expected to allow
supplying customers with new forms of value while providing employees even more stimulating andrewarding career opportunities.
After the completion of this tender offer, the AEON delight Group plans to continue to take more actions for theconsolidation and realignment of the facility management services industry. To continue to create
environmental value for clients and communities, which is the AEON delight philosophy, group companies will
constantly innovate from within and become more competitive. The objective is to become the leading
comprehensive facility management organization in Asia.

(Inquiries regarding this release： Yoshiyuki Kyomoto, General Manager, Group Strategy Div.
+81-6-6260-5632)

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(Reference)
Overview of Hakuseisha(as of March 31, 2015)(1)

Company name

Hakuseisha CO., LTD.

(2)

Headquarter

1-3-9 Iwamoto-cho, Chiyoda-ku, Tokyo(3)

Representative

Takashi Uchida, President(4)

Business

Building maintenance, security and other businesses(5)

Capital450million yen(6)

Establishment

August 13, 1954

(7)

Number of employees

3,256 (Staff: 536 Part-timer: 2,720)(8) Consolidated business results and financial condition for the recent three years
Fiscal year

FY3/13

FY3/14

FY3/15

Net assets (consolidated)

6,169 million yen

6,501 million yen

6,636 million yen

Total assets (consolidated)

8,024 million yen

8,603 million yen

8,821 million yen

Net sales (consolidated)

9,722 million yen

10,036 million yen

9,838 million yen

Operating income (consolidated)

354 million yen

264 million yen

175 million yen

Ordinary income (consolidated)

454 million yen

448 million yen

275 million yen

Net income (consolidated)

296 million yen

289 million yen

172 million yen

Restructuring and globalization ofthe building maintenance business led by AEON delight
Changes in net sales of AEON delight(100 million yen)

Global expansion
3,300

Reorganization of domestic business

2,489 2,572

Reorganization of the Group

2,667

2,198

2,800

Made Hakuseisha
into subsidiary

1,709 Merged with

1,375 1,457 1,403
1,112

To be the No.1
Comprehensive FMS enterprise!

Tie-up
M&A

Made A to Z service
into subsidiary

CERTOMade DO SERVICE
into subsidiary

Established
AEON delight

Made KSK
into subsidiary2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source：AEON CO., LTD. Supplementary Materials of Financial Results, AEON delight CO., LTD. Annual Securities Report
all rights reserved

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2020

FY

How AEON delight plans to redefine the cleaning services business

PastFuture

Labor-intensive

Knowledge and capital-intensive• Place priority on securing human resources• The use of human resources will rely greatly on• Place priority on securing know-how and skills• Utilize soft assets (skills, patents, brand and license etc.)

their know-how, experience and motivation• Anyone can easily work at any time

Focus on local area

Expand globally• Many small and mid-sized companies in one area
• Less benefits that come with a larger size
resources, knowledge and skills• Humanare dispersed• Place priority on large companies• Pursue benefits that come with a larger size
• Share human resources, knowledge and skills

Order-taker operations

Operations with value-added ideas• Receive work orders from customers• Make promises about completing jobs• Negotiations are mainly about prices• Place priority on offering proposals from the standpoint of clients• Make promises about quality of services• Negotiations are mainly about added value of facilities

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Purpose of M&A
Pursue the benefits that come with a larger size

• Use centralized purchasing to become more cost competitive• Use larger size for recruiting and retaining people• Use larger size for a stronger negotiating position with clients

Consolidation andreorganization of the industry

Training and utilization of management personnel• Establish a global management infrastructure

Globally ranked
management structure• Utilize a training facility and add more programs
Research and develop cutting-edge technologies• IT investment• Research and develop business use materials

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