【Cover】【Submitted Document】

Opinion Representation Report【Place of Submission】

Director-General of Kanto Local Finance Bureau【Submission Date】

September 18, 2024

【Name of Reporting Party】

TRANCOM Co., Ltd.

【Address or Location of Reporting Party】 19-30, 1-chome Aoi, Higashi-ku, Nagoya【Nearest Point of Contract】

19-30, 1-chome Aoi, Higashi-ku, Nagoya【Telephone Number】+81-52-939-2011(Main phone number)【Name of Administrative Contract】

Ayumi Usuki, Executive Officer in Charge of Public
Relations and IR【Place of Public Inspection】

TRANCOM Co., Ltd., main office(19-30, 1-chome Aoi, Higashi-ku, Nagoya)Tokyo Stock Exchange, Inc.
(2-1 Nihonbashi, Kabutocho, Chuo-ku, Tokyo)
Nagoya Stock Exchange, Inc.
(8-20, Sakae 3-chome, Naka-ku, Nagoya)(Note 1) “Company” as used herein means TRANCOM Co., Ltd.
(Note 2) “Tender Offeror” as used herein means K.K. BCJ-86.
(Note 3) Where numerical figures herein have been rounded off or truncated, the amount indicatedas the total may not always coincide with the sum of the relevant numerical figures.
(Note 4) “Act” as used herein means the Financial Instruments and Exchange Act (Act No.25 of1948, as amended).
(Note 5) “Order” as used herein means the Financial Instruments and Exchange Act Enforcement
Order (Cabinet Order No.321 of 1965, as amended).
(Note 6) “Share Certificates, Etc.” as used herein means the rights pertaining to stock and stockacquisition rights.
(Note 7) “Business Day” as used herein means any day other than a day set out in any item of
Article 1, paragraph (1) of the Act on Holidays of Administrative Organs (Act No.91 of
1988, as amended).
(Note 8) Unless otherwise indicated, any reference in this Statement to a number of days or a date
and time means the number of days or the date and time in Japan.
1

(Note 9) The tender offer described herein (the “Tender Offer”) is for the common stock (the“Company Shares”) and the stock acquisition rights of the Company, which has been
incorporated in Japan. The Tender Offer shall be made in compliance with the procedures
and information disclosure standards established by the laws of Japan, and there
procedures and standards are not necessarily the same as the procedures and information
disclosure standards of the United States. In particular, the Section 13 (e) and Section 14(d) of the U.S. Security Exchange Act of 1934 (as amended; the same shall apply
hereinafter) and the rules thereunder do not apply to the Tender Offer, and the Tender
Offer does not conform to those procedures and standards. All of financial information
contained herein and in the reference materials hereof is not in accordance with thegenerally accepted accounting standards in the United States and may not be equivalentor comparable to financial information prepared in accordance with the generally
accepted accounting standards in the United States. In addition, the Tender Offeror is alegal entity established outside the United States and all or some of its officers are nonU.S. residents, it may be difficult to exercise any rights or make any demands under the
securities laws of the United States. It may be impossible to commence legal proceedings
against a corporation that is based outside of the United States or its officers in a court
outside of the United States. Furthermore, a United States court may not necessarily havejurisdiction over legal entities and their respective subsidiaries and affiliates outside theUnited States.
(Note 10) Unless otherwise specified, all procedures relating to the Tender Offer are to be
conducted entirely in Japanese. If all or any part of a document relating to the Tender
Offer is prepared in the English language and there is any inconsistency between the
English language documentation and the Japanese language documentation, the Japanese
language documentation will prevail.
(Note 11) This document and the reference materials hereof include statements that fall under the“forward-looking statement” defined in Section 27A of the U.S. Securities Act of 1933
(as amended; the same applies hereinafter) and Section 21E of the U.S. Securities
Exchange Act of 1934. Due to the known and unknown risks, uncertainties and otherfactors, the actual rights might differ significantly from the statements that are implicitly
or explicitly forward-looking. The Tender Offeror and its affiliates do not warrant thatsuch implicit and explicit forward-looking statements will be achieved. The “forwardlooking statements” herein and in the reference materials hereof were prepared based on
the information obtained by the Tender Offeror as of the date hereof and, unless requiredby law, the Tender Offeror and its affiliates are not obliged to amend or revise suchforward-looking statements to reflect future matters and circumstances.
(Note 12) There is the possibility that the Tender Offeror and its related parties (including theTargent Company) and their respective financial advisors and parties related to the Tender
Offeror’s agent will, to the extent of their ordinary business, within the scope of permitted
under the financial instruments and exchange related legislation of Japan, engage in the2

tendering of the Company Shares without reliance on the Tender Offer or engage in acts
therefor prior to the commencement of the Tender Offer or during the period for tendering,etc. of the Tender Offer (the “Tender Offer Period”) on its own or a customer’s account,pursuant to the requirements of Section 14e-5(b) of the U.S. Securities Exchange Act of1934 regulations. If information concerning such tendering, etc. is disclosed in Japan, theperson making such tender will disclose the information in English on its website.

3

1. 【Name or Designation and Address or Location of the Tender Offeror】
Name:
Location:

K.K. BCJ-86
5F Palace Building, 1-1-1 Marunouchi, Chiyoda-ku, Tokyo

2. 【Class of Share Certificates, Etc. to be Purchaed, Etc. by the Tender Offeror】(1)(2)

Common stock shares (The common stock shares of the Company are collectively referred
to as the “Company Shares” and )Stock acquisition rights (The stock acquisition rights of following sections (i) and (ii) arecollectively referred to as the “Stock Acquisition Rights,” and holders of the Stock
Acquisition Rights are collectively referred to as the “Holders of Stock Acquisition
Rights”):(i)
1st series of stock acquisition rights issued pursuant to a resolution adopted at a
meeting of the Company’s board of directors convened on May 26, 2014
(hereinafter, the “1st Series Stock Acquisition Rights”) (exercise period from June
10, 2014 through June 9, 2044) and,(ii)
2nd series of stock acquisition rights issued pursuant to a resolution adopted at a
meeting of the Company’s board of directors convened on April 27, 2015
(hereinafter, the “2nd Series Stock Acquisition Rights”) (exercise period from May
12, 2015 through May 11, 2045).

3. 【Content of, and Basis and Reasoning for Opinion on the Tender Offer】(1)

Content of Opinion
At a meeting of its board of directors convened on September 17, 2024, based on the basis
and reasoning set forth in Section “(2) Basis and Reasoning for Opinion” below, theCompany adopted a resolution expressing its opinion in favor of the Tender Offer, andrecommending that all of the Company’s shareholders tender their shares in the Tender
Offer, and leaving the decision on whether the Holders of Stock Acquisition Rights shouldor should not tender their Stock Acquisition Rights in the Tender Offer to the discretion of
all Holders of Stock Acquisition Rights.
Furthermore, the foregoing resolution of the board of directors was adopted under the
method stated in part “(vi) Unanimous Approval of Directors without Interests in the
Company (Including Directors who are Members of Audit and Other Committees)” ofSection “(6) Measures to Ensure Fairness of Tender Offer Purchase Price and Measures to
Avoid Conflicts of Interest, and Other Measures to Ensure Fairness of Tender Offer” below.

(2)

Basis and Reasoning for Opinion
Those statements in this Section “(2) Basis and Reasoning for Opinion” that are related to
the Tender Offeror are based on the explanation received from the Tender Offeror.
(i)
Overview of Tender Offer
4

The Tender Offeror is a wholly owned subsidiary of K.K. BCJ-85-2 hereinafter, the“Parent Company of Tender Offeror”) in which the investment funds advised by
Bain Capital Private Equity, LP as well as its group (hereinafter, individually andcollectively referred to as “Bain Capital”) indirectly hold all of the voting rights,
and is a kabushiki kaisha (joint stock company) established on September 6, 2024
for the main purpose of holding the Company Shares and controlling and managing
the Company’s business activities. As of the filing date of this document, Bain
Capital, the Parent Company of Tender Offeror and the Tender Offeror do not holdthe Company Shares or Stock Acquisition Rights.
Bain Capital is an international investment company holding approximately USD
185 billion in assets under management worldwide, and since the opening of its
Tokyo office in 2006, it has utilized more than 60 employees to advance efforts toenhance the corporate value of its portfolio companies in Japan. Its team consists
mainly of professionals with experience at business and consulting companies, andin addition to the capital and financial support generally provided by investmentcompanies, it has steadily implemented growth strategies through the support ofbusiness operations at the field level and has a track record in successfully
introducing value enhancing measures as set out below. In Japan, Bain Capital has
invested in 34 companies including Snow Peak Inc., OUTSOURCING Inc., T&K
Toka Co., Ltd., System Information Co., Ltd. (currently SI&C Co., Ltd.), IDAJ Co.,
Ltd., Evident Corporation (which succeeded to the former Olympus scientificoperations), Impact HD Inc., Mash Holdings, Co., Ltd. Hitachi Metals Industries,
Ltd. (currently Proterial, Ltd.), Tri-Stage Inc. (currently Street Holdings Inc.),
Linc’well Inc., Nihon Safety Co., Ltd., Ignis Ltd., Kirindo Holdings Co., Ltd., hey,
Inc. (currently “STORES, Inc.), Showa Aircraft Industry Co., Ltd., Cheetah DigitalCo., Ltd. (currently EmberPoint Co., Ltd.), Works Human Intelligence Co., Ltd.,
Toshiba Memory Corporation (currently Kioxia Corporation) and others, and on a
global basis, since its establishment in 1984, Bain Capital has invested inapproximately 400 companies, and in approximately 1,450 companies when
including additional investment.
Recently, the Tender Offeror decided to implement the Tender Offer as part of aseries of transactions (hereinafter, the “Transactions”) for a so-called managementbuyout (MBO) through the acquisition of all of the Company Shares listed on thePrime Market (hereinafter, the “TSE Prime Market”) of the Tokyo Stock Exchange,
Inc. (hereinafter, the “Tokyo Stock Exchange”) and the Premium Market(hereinafter, the “NSE Premium Market”) of the Nagoya Stock Exchange, Inc.
(hereinafter, the “Nagoya Stock Exchange”) (provided, however, that this includes
the Company Shares delivered upon the exercising of Stock Acquisition Rights, but
excludes the Non-tendered Shares (defined below) and the treasury shares held by
the Company) and all Stock Acquisition Rights.
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In the implementation of the Tender Offer, the Tender Offeror will enter into
individual Tender Offer Subscription Agreements (hereinafter, collectively, the“Tender Agreements”) dated September 17, 2024, with Mr. Atsunori Takebe(number of shares held: 179,200 shares; holding ratio (Note 1): 1.91%; hereinafter,“Mr. Takebe”), the chairperson of the Company’s board of directors and its 7thlargest shareholder (as of March 31, 2024), Masahisa Shimizu (number of shares
held: 30,600 shares; holding ratio: 0.33%; number of stock acquisition rights held:
200 units (target number of Company Shares: 20,000 shares; holding ratio: 0.21%);hereinafter, “Mr. Shimizu”), the Company’s director and chief advisor , as well as
the Company’s shareholders Nippon Active Value Fund PLC (number of shares
held: 465,500 shares; holding ratio: 4.96%; hereinafter, “NAVF”), NAVF SelectLLC (number of shares held: 50,000 shares; holding ratio: 0.53%; hereinafter,“NAVF LLC”), and the Company’s major shareholder Dalton Investments, Inc.
(number of shares held: 1,183,300 shares; holding ratio: 12.60%; hereinafter,“Dalton Inc.”) (hereinafter, NAVF, NAVF LLC and Dalton Inc. are collectively, the“Dalton Group” (number of shares held: 1,698,800 shares; holding ratio: 18.09%)
and Mr. Takebe, Mr. Shimizu and the Dalton Group are collectively referred to as
the “Tendering Shareholders”), (hereinafter, the Tender Agreements with therespective Tendering Shareholders are referred to as the “Tender Agreement (Mr.
Takebe),” “Tender Agreement (Mr. Shimizu)” and “Tender Agreement (DaltonGroup”), and the Tendering Shareholders agree to tender all of the Company Shares
they hold (total number of shares held: 1,908,600 shares; total holding ratio:
20.33%; hereinafter, the “Tendered Shares”) in the Tender Offer. In addition, theTender Offeror will enter into a Tender Offer Non-subscription Agreement(hereinafter, the “Non-tender Agreement”) dated September 17, 2024, with AICOH,
Ltd. (hereinafter, “AICOH”), the Company’s largest shareholder in which Mr.
Takebe holds all voting rights, and AICOH agrees to not tender any of the 2,694,000
Company Shares it holds (holding ratio: 28.69%; hereinafter, the “Non-tendered
Shares”) in the Tender Offer, to support a proposal on the Reverse Stock Split (hereand hereinafter, as defined in Section “(5) Policy on Reorganization, etc. after
Tender Offer (Matters Related to So-called Two-tier Takeover Strategy)” below)
with regard to all of the Company Shares it holds in the Extraordinary General
Shareholders Meeting (here and hereinafter, as defined in Section “(5) Policy on
Reorganization, etc. after Tender Offer (Matters Related to So-called Two-tierTakeover Strategy)” below), and to sell all of the Non-tendered Shares tendered in
the Acquisition of Treasury Stock (here and hereinafter, as defined below)
scheduled to be implemented by the Company after the Reverse Stock Split takes
effect. The Acquisition of Treasury Stock, taking into account the application of
the provision on the non-inclusion of deemed dividends in profits, shall be designed
6

to maximize the tender offer price and maintain fairness among shareholders by
establishing the Treasury Stock Acquisition Price (here and hereinafter, as defined
below) as an amount equal to the after-tax proceeds if AICOH were to tender its
shares in the Tender Offer and the after-tax proceeds if AICOH were to tender its
shares in the Acquisition of Treasury Stock. Please see Section “(7) Matters on
Important Agreements Related to Tender Offer between the Tender Offeror andShareholders of the Company” below regarding the details of the above Tender
Agreements and Non-tendered Shares.
(Note 1) “Holding ratio” means the ratio (here and hereinafter in the calculation of
the holding ratio, rounded to the nearest second decimal place) of thenumber of shares (9,388,841 shares, hereinafter, the “Standard Number of
Shares”) calculated by deducting the number of treasury shares (959,409
shares) held by the Company as of June 30, 2024, as stated in the “FYE
March 2025 Summary of 1st Quarter Financial Results [Japan GAAP](Consolidated)” released by the Company on July 29, 2024 (hereinafter the“Summary of Company’s 1st Quarter Financial Results”) (furthermore, here
and hereinafter, with regard to the number of treasury shares held by theCompany, this number of treasury shares does not include the number of theCompany Shares (120,632 shares) held by Custody Bank of Japan, Ltd.
(Trust E Account) as trust assets under the Company’s “Stock Benefit Trust(J-ESOP)” and “Stock Benefit Trust (BBT)” plans (hereinafter, theCompany Shares held by Custody Bank of Japan, Ltd. (Trust E Account) as
trust assets under the Company’s “Stock Benefit Trust (J-ESOP)” plan arereferred to as the “J-ESOP Held Shares,” and the Company Shares held by
Custody Bank of Japan, Ltd. (Trust E Account) as trust assets under theCompany’s “Stock Benefit Trust (BBT)” plan are referred to as the “BBT
Held Shares”)) from the number of shares (10,348,250 shares) calculated
by adding the number of the Company Shares (24,100 shares) subject to the
Stock Acquisition Rights that are outstanding and exercisable as of June 30,2024 (143 units of 1st Series Stock Acquisition Rights and 98 units of 2nd
Series Stock Acquisition Rights) to the total number of issued andoutstanding shares as of June 30, 2024 (10,324,150 shares) stated in theSummary of Company’s 1st Quarter Financial Results.
The Tender Offeror has established 3,508,200 shares (holding ratio: 37.37%) as theminimum limit for the number of the shares scheduled to be purchased in the Tender
Offer, and will not engage in the purchase or the like of any of the tendered sharecertificates or the like if the total number of share certificates or the like tenderedin the Tender Offer (hereinafter, the “Tendered Share Certificates, etc.”) fails tomeet the minimum number of the shares scheduled to be purchased (3,508,200
7shares). On the other hand, a maximum limit has not been established for thenumber of shares scheduled to be purchased since, as stated above, the Tender
Offeror plans on taking the Company Shares private through the acquisition of allof the Company Shares (provided, however, that this shall include the Company
Shares delivered upon the exercising of Stock Acquisition Rights, but excludes the
Non-tendered Shares and the treasury shares held by the Company) and the Stock
Acquisition Rights, and if the total of the Number of Tendered Share Certificates,etc. exceeds the minimum number of the shares scheduled to be purchased(3,508,200 shares), the Tender Offeror will engage in the purchase or the like of all
the Tendered Share Certificates, etc. Furthermore, the minimum number of theshares scheduled to be purchased (3,508,200 shares) has been set as the number ofshares (3,508,200 shares) calculated by taking the number of voting rights (35,082
rights) that deducts the number of voting rights (26,940 rights) associated with the
Non-tendered Shares (2,694,000 shares) from the number of rights (62,022 rights(rounded up to the nearest whole number)) calculated by multiplying the numberof voting rights (93,032 rights) associated with the number of shares (9,303,209
shares) that deducts the number of treasury shares (959,409 shares) held by theCompany as of June 30, 2024 and the BBT Held Shares as of that same date (61,532
shares) from the total number of issued and outstanding shares as of June 30, 2024
(10,324,150 shares) stated in the Summary of Company’s 1st Quarter Financial
Results, by two-thirds (2/3), and then multiplying this by the Company’s numberof shares per unit (100 shares). The purpose of this is for the Tender Offeror toacquire all of the Company Shares (excluding, however, the Non-tendered Shares,
BBT Held Shares and treasury shares held by the Company) and Stock Acquisition
Rights to take the Company Shares private, and based on the fact that a special
shareholder resolution as prescribed in Article 309, Paragraph 2 of the Companies
Act (Act No. 86 of 2005, including subsequent revisions; hereinafter, the“Companies Act”) is required in the implementation of the procedures of theReverse Stock Split stated in Section “(5) Policy on Reorganization, etc. after
Tender Offer (Matters Related to So-called Two-tier Takeover Strategy)” below,
and on the fact that the BBT Held Shares are not expected to be tendered in theTender Offer, and the Stock Benefit Trust Agreement executed by and between the
Company and Mizuho Trust & Banking Co., Ltd. (including the Trust Manager
Guidelines slated to be complied with by the trust manager of the corresponding
trust, hereinafter, the “Stock Benefit Trust (BBT) Agreement”) stipulates that thetrustee will uniformly not exercise the voting rights for the corresponding Company
Shares based on the instructions of the trust manager, and this has been establishedto make it possible to satisfy the corresponding requirement by having the Tender
Offeror and AICOH to hold two-thirds (2/3) or more of the total voting rights for8

all of the Company’s shareholders (excluding, however, the voting rights associatedwith the BBT Held Shares).
Furthermore, 241 Stock Acquisition Rights are outstanding as of the filing date ofthis document, and the number of shares subject thereto is 24,100 Company Shares,
but in principle, these Stock Acquisition Rights can only be exercised within theexercise period for Stock Acquisition Rights, for a period of up to ten (10) days as
reckoned from the date following the date on which any of the Holders of Stock
Acquisition Rights forfeit their status as an officer of the like of the Company or its
subsidiaries, and of the three (3) current directors and two (2) current executive
officers and the like who are Holders of Stock Acquisition Rights none arescheduled to exercise Stock Acquisition Rights through the fulfillment of theexercising condition associated with the aforementioned forfeiture of status, and as
stated in Section “(5) Policy on Reorganization, etc. after Tender Offer (Matters
Related to So-called Two-tier Takeover Strategy)” below, the Tender Offeror, in theevent the Tender Offer is completed, will request the Company to, or is scheduled
to acquire and cancel the Stock Acquisition Rights, or recommend that the Holdersof Stock Acquisition Rights waive their Stock Acquisition Rights, or the like, andwhen receiving such a request, the Company intends to cooperate, and as such in
the establishment of the minimum number of the shares scheduled to be purchased,
the Company has not taken into account the number of the Company Shares subject
to the Stock Acquisition Rights (24,100 shares).
In addition, in the event the Tender Offeror is unable to acquire all of the Company
Shares (provided, however, that this includes the Company Shares delivered upon
the exercising of Stock Acquisition Rights, but excludes the Non-tendered Shares,
BBT Held Shares and the treasury shares held by the Company) and the Stock
Acquisition Rights in the Tender Offer, once the Tender Offer is completed, as
stated in Section “(5) Policy on Reorganization, etc. after Tender Offer (Matters
Related to So-called Two-tier Takeover Strategy)” below, the Company’s only
shareholders will be the Tender Offeror and AICOH, and the plan is to implementa series of procedures for the privatization of the Company Shares (hereinafter,“Squeeze Out Procedures”).
Once the Tender Offer is completed, the Tender Offeror is scheduled to receive
investment up to JPY 25.8 billion from the Parent Company of Tender Offeror by
two (2) business days prior to the commencement date of the settlement of accounts
associated with the Tender Offer, and to receive financing up to up to approximately
JPY 43.7 billion from MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui
Banking Corporation, and Aozora Bank, Ltd. by two (2) business days prior to thecommencement date of the settlement of accounts associated with the Tender Offer(hereinafter, “Bank Financing”), and this funding is scheduled to be appropriatedto settlement funds for the Tender Offer.. The details of the lending terms for the
9

Bank Financing are slated to be prescribed in the loan agreement associated with
the Bank Financing upon separate mutual consultation with the MUFG Bank, Ltd.,
Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, and Aozora Bank, Ltd.,but under the loan agreement associated with the Bank Financing, the shares of theTender Offeror held by the Parent Company of Tender Offeror and the Company
Shares acquired by the Tender Offeror through the Tender Offer are scheduled to
be provided as security.
In addition, following the Squeeze Out Procedures, the Tender Offeror is scheduled
to implement an acquisition of the Non-tendered Shares by the Company(hereinafter, the “Acquisition of Treasury Stock,” and the price for the acquisitionof treasury shares associated with the Acquisition of Treasury Stock is referred toas the “Treasury Stock Acquisition Price”). It will be possible to implement theAcquisition of Treasury Stock after the Reverse Stock Split and prior to theapproval of exemption from the obligation to file securities reports, but this will beafter the Company Shares are delisted, and since the delisted shares do not fallunder the “listed share certificates, etc.” (FIEA Article 24-6, Paragraph 1, andCabinet Order Article 4-3) subject to a tender offer for one’s own shares (here andhereinafter meaning the tender offer set forth in FIEA Article 27-22-2), and as such
the Tender Offeror does not plan on conducting a tender offer for its own shares.
In addition, the Treasury Stock Acquisition Price, taking into account theapplication of the provision on the non-inclusion of deemed dividends in profits, isscheduled to be JPY 8,158 per share for the Company Shares prior to the Reverse
Stock Split, as an amount equal to the after-tax proceeds if AICOH were to tender
its shares in the Tender Offer and the after-tax proceeds if AICOH were to tender
its shares in the Acquisition of Treasury Stock. The Acquisition of Treasury Stockwas proposed by Bain Capital to AICOH from the viewpoint of maximizing thetender offer price and maintaining fairness among shareholders.
Additionally, following the Acquisition of Treasury Stock, Mr. Takebe and the asset
management company of a relative of Mr. Takebe which is scheduled to beestablished as a company in which Mr. Takebe holds all the voting rights by thetime of the implementation of the Reinvestment (Founding Family) (defined below)(hereinafter, the “Takebe Family Asset Management Company”) plan on a shareinvestment of 30.7%, as a total for Mr. Takebe and the Takebe Family AssetManagement Company, in K.K. BCJ-85-1 (hereinafter, “BCJ-85-1)”) the wholly
owning parent company of the Tender Offeror (hereinafter, “Reinvestment(Founding Family)”) (Note 2), and AICOH plans on subscribing to the class A
preferred stock issued by BCJ-85-1 (hereinafter, the “Class A Preferred Stock”)(hereinafter, the “Preferred Stock Subscription”) (Note 3). While the specificschedule and other details of the Reinvestment (Founding Family) and the Preferred
Stock Subscription have yet to be determined as of the filing date of this document,10the Class A Preferred Stock is scheduled to stipulate respectively (i) that dividends
be paid to the shareholders of the Class A Preferred Stock prior to the shareholdersof common stock in the event BCJ-85-1 pays dividends on surpluses, (ii) that theClass A Preferred Stock have no voting rights in the general meetings ofshareholders at BCJ-85-1 , and (iii) that if BCJ-85-1 lists its common stock(hereinafter, the “Shares of BCJ-85-1”), BCJ-85-1, by means of the corresponding
listing, shall be entitled to acquire all of the Class A Preferred Stock as consideration
for the corporate bonds issued by BCJ-85-1 or the subordinate loan claims underwhich BCJ-85-1 is the borrower.
In addition, after the Reverse Stock Split takes effect, the Dalton Group is scheduled
to engage in an equity investment totaling 14.40% (hereinafter, the “Reinvestment(Dalton Group)”) in BCPE Nexus Caymon L.P. (hereinafter, the “BCPE Nexus”),
the parent company of the BCJ-85-1 (Note 4).
(Note 2) The valuation of the Company Shares serving as the premise fordetermining the payment amount per share of the stock of BCJ-85-1 in the
Reinvestment (Founding Family) is scheduled to be JPY 10,300, the same
price as the purchase price for a single Company Share in the Tender Offer(hereinafter, the “Tender Offer Price”), so as not to conflict with purport of
the uniformity regulations for tender offer prices (FIEA Article 27-2,
Paragraph 3) (provided, however, that this is scheduled to be formally
adjusted based on the ratio of the reverse stock split for the Company Sharesin the Reverse Stock Split which will be implemented as a Squeeze Out
Procedure). Furthermore, the reasons for receiving the Reinvestment(Founding Family) from Mr. Takebe and the Takebe Family AssetManagement Company are as set out in part “ii) Management Policy after
Tender Offer” of Section “(ii) Background, Purpose and Decision Making
Process Leading up to Decision to Implement Tender Offer, andManagement Policy after Tender Offer” below, and Mr. Takebe, based on
his wealth of experience to date, is scheduled to be involved in the formation,
advancement and the like of the Company’s management policy, capital
policy and overseas strategy, from a medium to long-term and broad
perspective, and to continue to be involved in overall management of theCompany’s business growth as chairperson of the board of directors after
the completion of the Tender Offer, while also playing a responsible role incultivation of collaborations and business relations with important business
partners, and with this the plan is to provide Mr. Takebe with a shared
incentive to improve the Company’s corporate value. As such, Bain Capitalbelieves that since the Reinvestment (Founding Family) by Mr. Takebe andthe Takebe Family Asset Management Company has been considered
independently from Mr. Takebe’s decision to tender shares in the Tender11Offer, there will be no conflict with the purport of the uniformity regulations
for tender offer prices (FIEA Article 27-2, Paragraph 3).
(Note 3) Since the Class A Preferred Stock will grant preferred dividend rights but
not grant voting rights, the plan is to valuate these at the same the market
value for the stock of BCJ-85-1, and issue the Class A Preferred Stock. In
addition, the plan is to value the Company Shares serving as the premise forthe valuation of the stock of BCJ-85-1 at the same amount as the Tender
Offer Price. As such, Bain Capital believes that the Preferred Stock
Subscription does not thought to conflict with the purport of the uniformity
regulations for tender offer prices (FIEA Article 27-2, Paragraph 3).
Furthermore, the reasoning for AICOH’s Preferred Stock Subscription, inview of the listing of the Shares of BCJ-85-1, is, as set out in (Note 2) above
and part “ii) Management Policy after Tender Offer” of Section “(ii)Background, Purpose and Decision Making Process Leading up to Decision
to Implement Tender Offer, and Management Policy after Tender Offer”
below, for the intent of providing Mr. Takebe with a shared incentive toimprove the Company’s corporate value even after the Transactions,
utilizing class shares that can be converted to a set debt as risk control in
the event investment is only carried out by common stock.
(Note 4) With regard to the interest in BCPE Nexus scheduled to be acquired by
the Dalton Group, the valuation of the Company Shares premised on thedetermination of the investment amount in the BCPE Nexus is scheduled to
be JPY 10,300, the same price as the Tender Offer Price, so as not to conflictwith purport of the uniformity regulations for tender offer prices (FIEA
Article 27-2, Paragraph 3) (provided, however, that this is scheduled to beformally adjusted based on the ratio of the reverse stock split for theCompany Shares in the Reverse Stock Split which will be implemented asa Squeeze Out Procedure), and the BCPE Nexus interest is scheduled to beissued at this corresponding valuation. Furthermore, the reasoning for thereceipt of the Reinvestment (Dalton Group) from the Dalton Group is, as
set out in part “i) Background, Purpose and Decision Making Process
Leading up to Decision to Implement Tender Offer by the Tender Offeror”
of Section “(ii) Background, Purpose and Decision Making Process Leading
up to Decision to Implement Tender Offer, and Management Policy after
Tender Offer” below, because the Dalton Group will be holding theCompany Shares in the medium to long-term, and Bain Capital considers
that it will share knowledge with them. As such, Bain Capital believes thatsince the Reinvestment (Dalton Group) by the Dalton Group is being
considered independently from whether the Dalton Group tenders shares in
the Tender Offer, it will not conflict with purport of the uniformity
12

regulations for tender offer prices (FIEA Article 27-2, Paragraph 3).
Furthermore, Bain Capital’s equity investment rate in BCPE Nexus isscheduled to reach 85.60% after the Reinvestment (Dalton Group).
At present, an outline of the series of contemplated transactions may be illustrated
as follows.
I.

Prior to Implementation of Tender Offer

BCPE Nexus

BCJ-85-1

Parent Company ofTender Offeror

Tender Offeror

Mr. Takebe

28.69%

Mr. Shimizu

0.54%

1.91%

Dalton Group18.09%

Other Subject Shareholders
and Holders of Stock
Acquisition Rights

50.77%

TargetII.

After Implementation of Tender Offer (as of November 1, 2024)
BCPE Nexus

BCJ-85-1

Parent Company ofTender Offeror

Tender Offeror

37.37%or moreMr. Takebe

Mr. Shimizu

Dalton Group

28.69%

33.94% or lessTargetIII.

Other Subject Shareholders
and Holders of Stock
Acquisition Rights

After Squeeze Out Procedures (around Mid-January 2025)
13

BCPE Nexus

BCJ-85-1

Parent Company ofTender Offeror

Other Subject Shareholders
and Holders of Stock
Acquisition Rights

Tender Offeror

TargetIV.

Acquisition of Treasury Stock (around late January 2025)

BCPE Nexus

BCJ-85-1

Parent Company ofTender Offeror

Tender Offeror

TargetV.

Acquisition ofTreasury Stock

Reinvestment (Dalton Group), Reinvestment (Founding Family) and Preferred
Stock Subscription (around late January 2025)

14

Dalton Group
Reinvestment (total 14.40]%)

BCPE Nexus

Takebe Family AssetManagement
Company

Mr. Takebe

Reinvestment (total (30.7)%)
69.3%

Issuance of Preferred Stock
BCJ-85-1

Parent Company ofTender Offeror

Tender Offeror

TargetVI.

After Reinvestment (Dalton Group), Reinvestment (Founding Family) andPreferred Stock Subscription (around late January 2025)
Bain Capital

85.60%

Dalton Group
14.40%

BCPE Nexus

69.3%

Mr. Takebe

Takebe Family AssetManagement
Company
Preferred

30.7%

BCJ-85-1

Parent Company ofTender Offeror

Tender Offeror

Target(ii)
i)

Background, Purpose and Decision Making Process Leading up to Decision to
Implement Tender Offer, and Management Policy after Tender Offer
Background, Purpose and Decision Making Process Leading up to Decision to
Implement Tender Offer by the Tender Offeror.
The Company was established in June 1959 as Nagoya Transport Center Co., Ltd.,for the purpose of handling the transportation of automobiles, from our predecessor
15

Kabushiki Kaisha Aichi Kogata Unyu, whose shares were acquired by our founder,
Junzo Takebe, in March 1955, and subsequently it changed its trade name to thecurrent TRANCOM Co., Ltd. in June 1989. Subsequently, the Company registered
its shares as over-the-counter shares with the Japan Securities Dealers Associationin April 1995, then listed its shares on the Second Section of the Tokyo Stock
Exchange and the Second Section of the Nagoya Stock Exchange in February 2002,
was then designated to the First Section of the Tokyo Stock Exchange and the First
Section of the Nagoya Stock Exchange in December 2012, and had its market
classifications reviewed by the Tokyo Stock Exchange and the Nagoya Stock
Exchange in April 2022, and as of the filing date of this document is listed on the
TSE Prime Market and NSE Premium Market.
The Company’s Group (referring to its group consisting of the Company, 18
consolidated subsidiaries, and 1 affiliated company accounted for using the equity
method (as of the filing date of this document)) is primarily engaged in the bulk
contracting business for the logistics functions of client companies, and is mainly
engaged in the business of matching freight with trucks in long-haul principal route
areas.
The Group aims for a corporate image where “we hope to be the one who is counted
on,” and provides services that meet expectations of its business partners as alogistics company that plays an important role in social infrastructure.
The content of the Group businesses is as follows.
(a)

Logistics management businessIn this business, the Company proposes overall optimal logistics in the
supply chains of its customers, and engages in the bulk delegated services
for the logistics functions at customers who build and operate logistics
centers.

(b)

Logistics information services businessThis business matches the cargo needs of shippers with information on
available trucks at transportation partners, mainly for long-haul principle
routes.

(c)

Industrial support businessThis business is mainly engaged in contracted manufacturing and thetemporary staffing in the manufacturing industry.

(d)Other business
Other business includes vehicle repair and maintenance services, casualty
insurance agency services and information system development services in
16

Japan. Overseas, the Company is engaged in logistics services in China,
Thailand, Singapore and Malaysia, and is engaged in building cleaning
services in Singapore.
In addition, the Group formulated a medium term management plan called“TRANCOM VISION 2025” (hereinafter, the “Company’s Medium Term BusinessPlan”) in April 2021, enumerating “creating ‘transport’” as its medium to long term
vision, and has promoted the building of “transport” platforms that can be utilized
by a wide array of enterprises. It has made efforts to advance nine key strategies:(i) expanding and improving transportation and delivery capabilities / enhancing awide variety of transportation and delivery modes; (ii) increasing the volume oftransportation handled domestically; (iii) business advancements in the freight andtruck matching services (Note 5); (iv) strengthening innovation throughcollaborations with other companies; (v) system development for progression
towards digitization / building data integration with other companies; (vi) building
a solid business foundation for the logistics management business; (vii)
strengthening growth in the ASEAN region; (viii) further strengthening /diversifying human resources and organization; and (ix) progression of ESG /SDGs management.
(Note 5) Freight and truck matching services: Services that match the freighttransportation needs of shippers with available trucks attransportation companies.
In terms of the business environment surrounding the Group, although there are
expectations for the recovery of economic activity due to the transition of novel
coronavirus infections to category 5, the future remains uncertain due to the soaring
costs of raw materials and fuel, rising prices against a backdrop of a weak yen, andother factors. In addition, the cap on overtime labor by truck drivers that went into
effect in April 2024, the aging truck driver population and other factors are expectedto spur a shortage of human resources and increase labor costs, resulting in lack oftransportation capacity, higher transportation costs and other negative impacts.
Additionally, shippers have begun to reconsider their supply chains, and the entire
logistics industry is expected to undergo major changes. In this era where rapidchanges are occurring to the business environment for logistics companies, as agroup we have come to the conclusion that it will be necessary to address thefollowing management issues, including the key strategies in the Company’s
Medium Term Management Plan stated above.

17

(a)

Implementation of proactive logistics proposals based on an accurate
understanding of changes to the supply chain
The logistics management business which proposes the overall optimizationof customer logistics and operates logistics centers has worked closely withcustomers to propose and put in place tailor-made logistics and to improvelogistics on a daily basis.
In the future, as logistics professionals, we will need to propose drastic
logistics efficiency improvements and undertake actual operations toaddress the changes that may occur at our business partners and in theindustry as a whole.

(b)Enhancement of logistics information services business
The logistics information services business was launched to cover chartertransportation in long-haul transportation areas, but then undertook medium
lot mixed transportation and expanded the its cargo volume and the freight
handled in response to market needs and customer requests. In the future,long-haul transportation will become increasingly difficult the 2024 issue,
and the need for medium-haul transportation is expected to expand as
shippers streamline their logistics operations, and as such the Company willneed to respond by changing the structure of shippers through the expansionof transactions with direct shippers, further improving the quality ofservices by expanding medium-lot transportation, and reconfiguring
information centers.

(c)

Building of logistics platforms for individual industries
In order to accelerate the construction of industry-specific logistics
platforms for the daily necessities industry, food industry, automobile partsindustry and other industries where the Group focuses its efforts, theCompany will need to build shared distribution networks in C-AREA (Note6), operate logistics centers to accommodate shared distribution, automatedoperations, development IT systems, and strengthen reverse logistics (pallet
collection) services.

(d)

Expansion of business in ASEAN region
While there is still room for improvement to Japan’s logistics market andthe potential for generating significant revenues, we recognize that our
growth will be limited if we limit ourselves to the market in Japan where
there is a declining birthrate and an aging population, and based thereon we
have been strengthening our overseas business development through M&A
and other activities. In the future, we will seek to enter and expand business18

in Indonesia, Vietnam and other ASEAN countries where further expansionof the consumer market is expected due to economic growth, and we believethat it will be necessary to strengthen our understanding of local markets
and business practices, enhance partnerships and M&A with local
enterprises, and strengthen our knowhow and the like regarding thegovernance of and creation of synergy with acquired enterprises.
(e)Collaboration with other companies
The promotion of collaborations both in our industry and in other industries
will be necessary in the advancement of the content set out above. The
Company believes that it will be necessary to enhance partnerships and
M&A not only overseas but in Japan as well, and to strengthen our
knowhow and the like regarding the governance of and creation of synergy
with acquired enterprises.

(f)Advancement of digital transformation (DX)In Japan where the working population is declining, it will be necessary toreplace the traditional analog way of doing things with a digital means, andthe business flow itself needs to undergo digital transformation.

(g)Strengthening of human resources and organization“Human resources” are the most important source of for the enhancementof corporate value at the Group, and the growth of each and every one of
our employees is indispensable for the implementation of theabovementioned measures and in the further cultivation of relationships oftrust with our customers and partners. The Company will endeavor to findand recruit human resources, create opportunities for individual growth,develop next-generation leaders, hire personnel with expertise, andotherwise hire and develop human resources.
(Note 6) C-AREA: A generic term referring to the Company’s value-added,
large-scale, multifunctional locations.

The Company taken a variety of growth measures into consideration to date, but
amid the major issues faced by the logistics industry as a whole, the Company cameto the realization that it will have to look into drastic measures to resolve theabovementioned management issues in order to realize further growth and theimprovement of its corporate value, and from around September 2023, theCompany began to examine its capital policy, including the formation of allianceswith operating companies and taking its shares private. Subsequently, when the
19Company implemented the drastic measures enumerated above, although there
were expectations for the improvement of the Company’s corporate value in themedium to long term, in addition to the need for large initial investment andongoing investment, because there was also a risk of uncertainty in the executionof business in that the business development would not go as planned in the creationof new business, the Company came to the conclusion that there could be a negative
impact on the Group’s earnings and cash flow. If these measures were implemented
while the Company maintained its listing, the Company would not have been
sufficiently valued in the capital markets in the short term, and undeniably this
could have a negative impact on the Company’s stock price and put the minority
shareholders at a disadvantage, and as such we believed that a viable option would
be to take the Company private to address the aforementioned management issues.
This consideration by the Company was advance through mutual consultations with
Mr. Takebe, the Company’s founder, largest shareholder (here and hereinafter,
including the indirect holdings through AICOH in which Mr. Takebe holds all of
the shares), and the chairperson of the Company’s board of directors. Additionally,in order to leverage the Company’s strengths to maximize growth, it would be
essential for the Company to engage in management while maintaining its
independence as an enterprise by utilizing its current management team which has
a good understanding of the uniqueness and corporate culture of the logistics
information service business which is recognized by the Company to be the sourceof its strength, and it was concluded that a management buyout (MBO) in which
Mr. Takebe, from the Company’s founding family and largest shareholder, would
continue to be a major shareholder even after the Company was taken private,
would be best way to take the Company private. Also, in order for the Group to
respond to major changes in the business environment in the future, the Company
and Mr. Takebe came to the conclusion that it would be appropriate for Mr. Takebe,as the chairperson of the Company’s board of directors, to be involved in theformulation, advancement and the like of the Company’s management policy,
capital policy and overseas strategy from a medium to long-term and broad-based
perspective, and for him to also be involved in the overall management of ourbusiness growth while taking a responsible role also in deepening alliances andbusiness relationships with our important business partners. Furthermore, in orderto implement drastic measures to resolve the aforementioned management issues,
the Group’s management resources on their own have certain limitations in termsof human resources and knowhow, and because it was felt that it would be
beneficial to utilize outside management resources in addition to the Company’s
own independent management efforts, from February through late May 2024 theCompany and Mr. Takebe had numerous contacts with private equity funds, andexchanged opinions and engaged discussions regarding the Company’s
20management strategy, policies and the like based on a medium to long-term
management environment outlook. Subsequently, in late May 2024, the Company
made contact with Bain Capital through Houlihan Lokey, Inc. (hereinafter,“Houlihan Lokey”), an M&A advisory firm, and received an explanation regarding
the general management support provided to portfolio companies by Bain Capitaland its initial understanding of the Company’s business, and we exchanged
opinions and engaged in discussions regarding the Company’s management
strategies, policies and the like. During these discussions the Company concluded
that: (i) not only was Bain Capital renown worldwide it also had a wealth ofinvestment experience and the capacity to execute solid deals in Japan, it had a deep
knowledge of the Company’s business sector and had a wealth of experience inselling equity interests of companies it had invested in after increasing their value
through initial public offerings; (ii) it has a large number of professionals who are
personnel with expert knowledge and a wealth of practical experience inmanagement consulting or operational companies, it actively participates in the
management support of portfolio companies, providing thorough support for highpriority management issues by having team members with a wealth of experience
onsite as needed, and is otherwise considered to have strength in designing andexecuting strategies that utilize a consulting approach, and has a track record inbusiness expansion; and (iii) and from the initial meeting, it was felt that themembers of Bain Capital had a deep understanding of the Company’s business andgrowth strategy, their views on the direction of the growth strategy envisioned by
the Company were in line with the Company’s views, and they were willing tocooperate to the fullest extent and provide sufficient support to address
management issues and enhance the Company’s corporate, and Bain Capital was
felt to be a reliable and optimal partner for the Company. Additionally, Mr. Takebe,
who participated in the series of discussions with Bain Capital shared thisrecognition. As such, in mid-June 2024, the Company came to the conclusion of
implementing a management buyout (MBO) of the Company together with Bain
Capital, on the premise that Mr. Takebe would continue to be involved in the
management of the Company while maintaining a capital relationship with theCompany to a certain extent, and communicated this to Bain Capital. Subsequently,
on June 25, 2024, the Company received a written representation of intent from
Bain Capital stating that an acquisition purpose company invested in by theCompany’s founding family and funds advised by Bain Capital would become thetender offeror and take the Company private through a tender offer, and on July 1,
2024, the Company commenced specific consideration of the Transactions with
Bain Capital.
Meanwhile, Bain Capital, through its initial analysis from late May 2024 throughlate June 2024 based on its discussions with the Company and Mr. Takebe, public21

information and other factors, was also highly impressed with the superiority of theCompany’s business base, the future and potential value of its business, and theleadership of the Company’s management team, and felt that by taking theCompany private and utilizing the global network it possesses, its track record insupporting intermittent growth through M&A, and by using its personnel networkand management knowhow, it would be able to advance flexible and agile
management reform to be able to realize new growth that the Company could notachieve on its own, and as such, it submitted a written representation of intent to
the Company on June 25, 2024, stating that an acquisition purpose company
invested in by the Company’s founding family and funds advised by Bain Capitalwould become the tender offeror and take the Company private through amanagement buyout (MBO), and on July 1, 2024, the Company contacted it statingthat it would take the proposal into consideration after establishing the structurenecessary for this consideration. Additionally, in early July 2024, Bain Capital
selected Bain Capital, the Tender Offeror, the Parent Company of Tender Offeror,
BCJ-85-1, BCPE Nexus, Mr. Takebe and AICOH (hereinafter, collectively, the“Tender Offeror et al.”), as well as Mizuho Securities Co., Ltd. (hereinafter,“Mizuho Securities”) as a financial advisory independent from the Company, andRopes & Gray Gaikokuho Kyodo Jigyo Horitsu Jimusho and Nagashima Ohno &Tsunematsu as legal advisors independent from the Tender Offeror et al. and theCompany. Thereafter, in the course of repeated discussions with the Company and
Mr. Takebe regarding the specifics of the Tender Offer, Mr. Takebe and Bain Capitalconcluded that in order for the Company to achieve further growth and enhance its
corporate value in the future in the medium term, it would be necessary to
implement various measures including the expansion of its overseas business andintermittent growth through M&A, and that it would be beneficial to utilized
outside human resources and management knowhow to promptly implement a
series of measures, rather than being limited to its inhouse management resources.
Additionally, Bain Capital, from the perspective of speeding up financing andstabilizing business, adopted a scheme in which the Tender Offer, not Bain Capitalor the parent company of the Offeror, would be the purchasing entity in the Tender
Offer, and determined that having Mr. Takebe continue to be involved as thechairperson of the board of directors even after the conclusion of the Tender Offerin the formulation, advancement and the like of Company’s management policies,
capital policies and overseas strategies, from a medium-term and broad perspective,
and playing a responsible role also in the cultivation, collaborations and business
relations with important business partners would contribute to the expansion of theCompany’s business, and in discussions with Mr. Takebe held in late July, they
requested that Mr. Takebe engage in the Reinvestment (Founding Family for the
purpose of having a shared incentive in improving the Company’s corporate value,22and requested of AICOH, taking into account the application of the provision on
the non-inclusion of deemed dividends in profits, to not tender shares in the Tender
Offer and to cooperate in the Acquisition of Treasury Stock after the Squeeze Out
Procedures from a perspective of maximizing the Tender Offer Price and ensure
fairness among shareholders, by establishing an amount that is equal to the amountof the after-tax proceeds AICOH would have earned if it had tendered shares in theTender Offeror and the amount of the after-tax proceeds AICOH would have earned
if it had accommodated the Acquisition of Treasury Stock, and Mr. Takebe
indicated his willingness to accept each of these requests, and as suchconsiderations were advanced premised on the Transactions. Bain Capitalconducted due diligence on the Company from early July 2024 through early
September 2024, comprehensively analyzed the Company business and financial
situation, and advanced its consideration.
Additionally, based on the course of the due diligence regarding the Company
progressed from early July 2024 through early September 2024, Bain Capitalconducted a multifaceted and comprehensive analysis of the Company’s business,financials and its future plans, and on July 31, 2024, Bain Capital made an initial
proposal for a Tender Offer Price of JPY 9,000 (a price that added a premium of
32.74% (here and hereinafter the calculation of the premium percentage is rounded
to the nearest second decimal point) to JPY 6,780, the closing price for theCompany Shares on the TSE Prime Market on July 30, 2024, the business day prior
to the proposal date), but on August 1, 2024, the Special Committee (here andhereinafter, as defined in Section “iii). Course and Reasoning to Company’s
Decision in Support of the Tender Offer” below) took into account the initial
analysis and the like by the Company’s financial advisor and assessed that this
proposed price was significantly under the intrinsic value that could be realized by
the Company through the achievement of the Business Plan (here and hereinafter,
as defined in Section “(3) Calculation Related Matters” below), and based also on
the premium levels in past cases management buyouts (MBOs), it responded byrequesting a re-proposal of the Tender Offer Price since the current price was
unreasonable from the perspective of protecting minority shareholders. In response
thereto, on August 7, 2024, Bain Capital made a second proposal for a Tender Offer
Price of JPY 9,400 (a price that added a premium of 49.92% to JPY 6,270, theclosing price for the Company Shares on the TSE Prime Market on August 6, 2024,
the business day prior to the proposal date), but on August 8, 2024, the Special
Committee took into account the initial analysis and the like by the Company’s
financial advisor and assessed that this proposed price was significantly under the
intrinsic value that could be realized by the Company through the achievement of
the Business Plan, and based also on the premium levels in past cases management23

buyouts (MBOs), it provided a response requesting the reconsideration of theTender Offer Price since the current price was unreasonable from the perspectiveof protecting minority shareholders. Based on this response, on August 21, 2024,
Bain Capital made a third proposal for a Tender Offer Price of JPY 9,800 (a pricethat added a premium of 46.27% to JPY 6,700, the closing price for the Company
Shares on the TSE Prime Market on August 20, 2024, the business day prior to the
proposal date), but on August 22, 2024, the Special Committee assessed that this
proposed price was significantly under the intrinsic value that could be realized by
the Company through the achievement of the Business Plan, and provided a
response requesting the reconsideration of the Tender Offer Price since the current
price was unreasonable from the perspective of protecting minority shareholders.
Based on this response, on August 28, 2024, Bain Capital made a fourth proposal
for a Tender Offer Price of JPY 10,000 (a price that added a premium of 45.14% to
JPY 6,890, the closing price for the Company Shares on the TSE Prime Market on
August 27, 2024, the business day prior to the proposal date), but on August 29,
2024, the Special Committee assessed that this proposed price was significantly
under the intrinsic value that could be realized by the Company through theachievement of the Business Plan, and provided a response requesting thereconsideration of the Tender Offer Price since the current price was unreasonablefrom the perspective of protecting minority shareholders. Based on this response,
on September 9, 2024, Bain Capital made a fifth proposal to the Company for a
Tender Offer Price of JPY 10,100 (a price that added a premium of 43.06% to JPY
7,060, the closing price for the Company Shares on the TSE Prime Market on
September 6, 2024, the business day prior to the proposal date), but on September
10, 2024, the Special Committee assessed that this proposed price was significantly
under the intrinsic value that could be realized by the Company through theachievement of the Business Plan, and provided a response requesting an increasein the Tender Offer Price since the current price was unreasonable from theperspective of protecting minority shareholders. In response thereto, on September
11, 2024, Bain Capital made a sixth proposal to the Company for a Tender Offer
Price of JPY 10,200 (a price that added a premium of 43.66% to JPY 7,100, theclosing price for the Company Shares on the TSE Prime Market on September 10,
2024, the business day prior to the proposal date), but on September 12, 2024, theSpecial Committee assessed that this proposed price was significantly under the
intrinsic value that could be realized by the Company through the achievement of
the Business Plan, and provided a response requesting an increase in the Tender
Offer Price since the current price was unreasonable from the perspective ofprotecting minority shareholders. Subsequently on September 13, 2024, Bain
Capital made a seventh proposal to the Company for a Tender Offer Price of JPY
10,300 (a price that added a premium of 44.66% to JPY 7,120, the closing price for24the Company Shares on the TSE Prime Market on September 12, 2024, the business
day prior to the proposal date ), and that same day, the Company and the Special
Committee provided a response accepting this proposal.
The Stock Acquisition Rights are issued as stock options to the Company’s officers
and employees, and as a condition for the exercising of these rights, the rights canonly be exercise in a period up to ten (10) days as reckoned from the date following
the date on which any of the officers or the like of the Company or its subsidiaries
forfeit their status, and the Tender Offeror cannot exercise these rights even if itwere to acquire them, so as such, purchase prices for a single Stock Acquisition
Right unit in the Tender Offer (collectively, the “Stock Acquisition Right Purchase
Price”) of JPY 1 was proposed to the Company, and on September 13, 2024, theCompany and the Special Committee provided a response accepting this proposal.
Parallel to the aforementioned negotiations with the Company, in early September
2024, Bain Capital commenced negotiations with the Dalton Group towards theexecution of the Tender Agreement (Dalton Group), for the purpose of increasing
the likelihood that the Tender Offer would be completed. Thereafter, inconsideration that the Dalton Group would be holding the Company Shares for the
medium to long term, and would share its knowledge with Bain Capital, they
engaged in discussions regarding the terms and conditions of the Reinvestment(Dalton Group). Additionally, on September 17, 2024, Bain Capital reached anagreement with the Dalton Group regarding the content of the Tender Agreement(Dalton Group) which will included the right of the Dalton Group to appoint one(1) director at BCJ-85-1, on the condition of the tendering of all of the Company
Shares held by the Dalton Group in the Tender Offer and the completion of theReinvestment (Dalton Group). Please see part “(iii) Tender Agreement (DaltonGroup” of Section “(7) Matters Related to Important Agreements Associated with
the Tender Offer between the Tender Offeror and Shareholders of the Company”
below regarding the details of the Tender Agreement (Dalton Group). Furthermore,
Bain Capital believes that, if the foregoing background and the content of theTender Agreement (Dalton Group) are taken into consideration, the continued
indirect investment by the Dalton Group pursuant to the Tender Agreement (DaltonGroup), after the Transactions, will not have an impact on the Company’s
management policy after the Tender Offer set forth in Section “ii) Management
Policy after Tender Offer” below.

Following the above negotiations, and premised on that the Company would not
pay interim dividends and term-end dividends in FYE March 2025, on September
13, 2024, the Tender Offeror decided to implement the Tender Offer at a Tender25

Offer Price of JPY 10,300, and a Purchase Price for Stock Acquisition Rights of
JPY 1.
ii)

Management Policy after Tender Offer
With regard to the management policy after the Tender Offer, as stated above insection “i) Background, Purpose and Decision Making Process Leading up to
Decision to Implement Tender Offer,” after taking the Company private throughthe Transactions, Bain Capital, based on its past investment track record, experienceand the like, plans to provide the Company with assistance in measures to realize
the maximization of the Company’s corporate value through hands-on management
support based on its wealth of investment experience, the strengthening of its
human resources and organization foundation to support the current management
team in long-term growth, and assistance in M&A and PMI.
The Transactions fall under a so-called management buyout (MBO), and the plan
is to have Mr. Takebe, based on his amassed wealth of experience and, to be
involved in the formation and advancement of the Company’s management policies,
capital policies and overseas strategy, from a medium to long-term and broad-based
perspective, and for him to continue to serve as the chairperson of the board of
directors and be involved in overall management towards the growth of theCompany’s business, while playing a role where his is responsible for cultivating
alliances and business relationships with important business partners. As of
September 17, 2024, BCPE Nexus entered into a Shareholders Agreement
including content related to the management of the Tender Offeror and theCompany after the Transactions and the handling of the Shares of BCJ-85-1 after
the Reinvestment (Founding Family) (hereinafter, the “Shareholders Agreement”)
with Mr. Takebe, and reached an agreement on the right to name directors of BCJ85-1 under the Shareholders Agreement. Please see section “’(7) Matters Related
to Important Agreements Pertaining to the Tender Offer between the Tender Offeror
and Shareholders of the Company” below regarding the details of the Shareholders
Agreement.
Bain Capital has said that it is considering dispatching several directors to theCompany as part of the Company’s management policy following the formation of
the Transactions, but plans, in principle, on keeping the current management system,and envisions that the management team will continue to take a leading role in the
management of the Group. With regard to question external personnel will be
brought in or not, upon mutual consultation with the Company’s current
management, it is anticipated that if it is determined to contribute to the Company’s
future growth, Bain Capital will utilize its global network to bring in the appropriate
personnel. At present, no decisions or assumptions have been made regarding themanagement system, management policy and the like otherwise, and the plan is to26

have the Tender Offeror and the Company discuss and consider these matters after
the completion of the Tender Offer.
Furthermore, (i) with regard to the Stock Acquisition Rights, the Purchase Price for
Stock Acquisition Rights will be JPY 1, and as set forth in in section “(5) Policy on
Reorganization, etc. after Tender Offer (Matters Related to So-called Two-tierTakeover Strategy)” below, the Tender Offeror plans to request the Company toimplement, or will implement the acquisition and retirement of the Stock
Acquisition Rights or a recommendation for the waiver of the Stock Acquisition
Rights by the Holders of Stock Acquisition Rights, and other procedures reasonably
required in the implementation of the Transactions; (ii) with regard to the J-ESOP
Held Shares, after confirming the intent of the employees of the Group subject tothe “Stock Benefit Trust (J-ESOP)” plan and completing other prescribed
procedures, it will be possible to tender the shares in the Tender Offer, but cashingout through the Tender Offer or the Squeeze Out Procedures will be detrimental tothese employees in terms of taxation; and (iii) with regard to the BBT Held Shares,
the Stock Benefit Trust (BBT) Agreement does not entail the tendering of shares in
the Tender Offer, and based on the fact that the shares will be assigned to theCompany free of charge if a decision is made to delist the Company through the
Squeeze Out Procedures, the Stock Acquisition Rights, and the Company’s J-ESOP
Held Shares and BBT Held Shares serve, in essence, as retirement bonuses orretirement benefits for the officers and employees of the Group, and as such, inlight of the intent of these respective systems, the Company’s plan is to compensate
these officers and employees for the economic benefits they would of enjoyed toensure that interests are not harmed. Bain Capital believes that this compensationof economic interests will provide these officers and employees with economic
interests that are substantially equal to the planned economic interests they would
have earned through the stock option system, and the Company’s “Stock Benefit
Trust (J-ESOP)” plan and “Stock Benefit Trust “BBT” plan, and since this will be
conducted at the judgment of the Company based on the intent of these respective
systems, with conditioning the compensation of the tendering of the Stock
Acquisition Rights, J-ESOP Held Shares and BBT Held Shares in the Tender Offer,
and will be conducted independent from the tendering of shares in the Tender Offer,
it will not run contrary to the purport of the uniformity regulations for tender offer
prices (FIEA Article 27-2, Paragraph 3).
(iii)

Course and Reasoning to Company’s Decision in Support of the Tender Offer
As stated in part “i) Background, Purpose and Decision Making Process Leading
up to Decision to Implement Tender Offer” of Section “(ii) Background, Purpose
and Decision Making Process Leading up to Decision to Implement Tender Offer,and Management Policy after Tender Offer,” prior to entering into specific27

consideration with Bain Capital regarding the Transactions on July 1, 2024, as set
forth in Section “(6) Measures to Ensure Fairness of Tender Offer Purchase Priceand Measures to Avoid Conflicts of Interest, and Other Measures to Ensure Fairnessof Tender Offer” below, in advancing consideration of the Transactions, in midJune 2024, Bain Capital, the Tender Offeror et al., as well as Nakamura Tsunoda &Matsumoto as legal advisors independent from the Company were selected toensure the fairness of the Tender Offer Price and the fairness of the Transactions
inclusive of the Tender Offer.. Additionally, on July 1, 2024, Houlihan Lokey was
selected as financial advisor and third party calculation agent independent from theTender Offeror et al. as well as the Company. Furthermore, based on the legal
advice of Nakamura Tsunoda & Matsumoto, the Company’s board of directors
adopted a resolution for the establishment of a special committee (hereinafter, the“Special Committee”) for the purpose of addressing the issues of structural conflictsof interest and information asymmetry in the Transactions inclusive of the Tender
Offer, eliminating arbitrariness in the decision-making process by the Company’sboard of directors, and ensuring the fairness, transparency and objectivity of theTransactions, thereby creating a system to consider the Transactions. With this, on
July 1, 2024, the Special Committee, based on the authority granted thereto,
appointed Mori Hamada & Matsumoto as its independent legal advisor. Please seepart “(iii) Establishment of Special Committee Independent from the Company andProcurement of Report” of Section “(6) Measures to Ensure Fairness of Tender
Offer Purchase Price and Measures to Avoid Conflicts of Interest, and Other
Measures to Ensure Fairness of Tender Offer” below regarding the composition of
the Special Committee, the authority granted thereto, their specific activities andother matters.
Under the aforementioned system, the Company, based on its management
environment and business conditions, the purpose of the Transactions, the effect theTransactions will have on the Company, the details of the management policy after
the Transactions and other matters, engaged in repeated discussions andconsideration on several occasions with the Tender Offeror regarding the various
terms and conditions of the Transactions inclusive of the Tender Offer Price, basedon the negotiation policy confirmed in advance by the Special Committee and theopinions, instructions, requests and the like from the Special Committee on
important aspects of the negotiations, while be advised by Houlihan Lokey andNakamura Tsunoda & Matsumoto.
Specifically, on July 25, 2024, the Company, through the Special Committee,
conducted on interview with Bain Capital and received an explanation of the
background leading up to the consideration of the Transactions, the details of
measures envisioned after the Transactions, and the planned management policy
and the like after the Transactions, and a question and answer session was held in28

response thereto. In addition, with regard to the Tender Offer Price, Bain Capital
proposed a Tender Offer Price of JPY 9,000 to the Company on July 31, 2024, andin response thereto, on August 1, 2024, the Special Committee, based on the advice
received from Houlihan Lokey regarding the value of the Company Shares anddiscussions conducted by the Special Committee, submitted a written request for
the reconsideration of the proposal to Bain Capital, on the grounds that the proposed
price was significantly lower than the intrinsic value the Company could realize
through the achievement of the Business Plan, and in consideration of the premium
levels in past management buyout (MBO) cases, the premium was not reasonablefrom the perspective of protection the Company’s minority shareholders. Thereafter,on August 7, 2024, Bain Capital proposed a Tender Offer Price of JPY 9,400, but
on August 8, 2024, the Special Committee, based on the advice received from
Houlihan Lokey regarding the value of the Company Shares and discussions
conducted by the Special Committee, submitted a written request for thereconsideration of the proposal to Bain Capital, on the grounds that the proposed
price was still significantly lower than the intrinsic value the Company could realize
through the achievement of the Business Plan, and in consideration of the premium
levels in past management buyout (MBO) cases, the premium was not reasonablefrom the perspective of protection the Company’s minority shareholders.
Subsequently, on August 21, 2024, Bain Capital proposed a Tender Offer Price of
JPY 9,800, but on August 22, 2024, the Special Committee, based on the advice
received from Houlihan Lokey regarding the value of the Company Shares anddiscussions conducted by the Special Committee, submitted a written request for
the reconsideration of the proposal to Bain Capital, on the grounds that the proposed
price was still significantly lower than the intrinsic value the Company could realize
through the achievement of the Business Plan, and the level of the premium was
not reasonable from the perspective of protection the Company’s minority
shareholders. Later, on August 28, 2024, Bain Capital proposed a Tender Offer
Price of JPY 10,000, but on August 29, 2024, the Special Committee, based on theadvice received from Houlihan Lokey regarding the value of the Company Sharesand discussions conducted by the Special Committee, submitted a written request
for the reconsideration of the proposal to Bain Capital, on the grounds that the
proposed price was still significantly lower than the intrinsic value the Company
could realize through the achievement of the Business Plan, and the level ofpremium was not reasonable from the perspective of protection the Company’s
minority shareholders. In addition, on September 9, 2024, the Company explained
to Bain Capital that its full year consolidated earnings forecasts for FYE March2025 could be revised downward from the forecasts publicly released by theCompany on April 30, 2024. Subsequently, on that same date, Bain Capital
proposed a Tender Offer Price of JPY 10,100, but the Special Committee, based on29

the advice received from Houlihan Lokey regarding the value of the Company
Shares and discussions conducted by the Special Committee, submitted a written
request for the reconsideration of the proposal to Bain Capital, on the grounds thatthe proposed price was still significantly lower than the intrinsic value the Company
could realize through the achievement of the Business Plan, and the level ofpremium was not reasonable from the perspective of protection the Company’s
minority shareholders. Furthermore, on that same date, the Company provided
Bain Capital with an explanation regarding its full year consolidated earnings
forecasts for FYE March 2025, stating that even though net sales would increase
by approximately JPY 4 billing over the forecast publicly released by the Company
on April 30, 2024, no changes would occur to its profits at each stage. Thereafter,
on September 11, 2024, Bain Capital proposed a Tender Offer Price of JPY 10,200,
but on September 12, 2024, the Special Committee, based on the advice received
from Houlihan Lokey regarding the value of the Company Shares and discussions
conducted by the Special Committee, submitted a written request seeking thereconsideration of the proposal since the corresponding proposed price was still not
at an appropriate level from a perspective of protecting the Company’s minority
shareholders. Subsequently, on September 13, 2024, a proposal for a Tender Offer
Price of JPY 10,300 was received from Bain Capital. The Special Committee, at a
meeting of the Special Committee on that same date, approved the Tender Offer
Price of JPY 10,300 based on the advice received from Houlihan Lokey regarding
the value of the Company Shares and discussions conducted by the Special
Committee, and on that same date, it provided a response to Bain Capital throughHoulihan Lokey accepting the proposal of a Tender Offer Price of JPY 10,300.
The Stock Acquisition Rights are issued as stock options to the Company’s officers
and employees, and as a condition for the exercising of these rights, the rights canonly be exercise in a period up to ten (10) days as reckoned from the date following
the date on which any of the officers or the like of the Company or its subsidiaries
forfeit their status, and the Tender Offeror cannot exercise these rights even if itwere to acquire them, so as such, a Bain Capital proposed a Stock Acquisition Right
Purchase Price of JPY 1. In response, on September 13, 2024, based on discussions
by the Special Committee, the Stock Acquisition Right Purchase Price of JPY 1 wasapproved, and on that same date, 2024, a response to Bain Capital through Houlihan
Lokey accepting the proposal of a Stock Acquisition Right Purchase Price of JPY
1.
In addition, the Company received necessary legal advice from its legal advisor
Nakamura Tsunoda & Matsumoto regarding the method and process for decision
making by the Company’s board of directors inclusive of the various procedures
related to the Transactions and other points of note, it received a final proposal fromthe Tender Offeror on September 13, 2024, and received the submission of a written
30

report dated September 17, 2024 (hereinafter, the “Report”), from the Special
Committee (please see part “(iii) Establishment of Special Committee Independent
from the Company and Procurement of Report” of Section “(6) Measures to Ensure
Fairness of Tender Offer Purchase Price and Measures to Avoid Conflicts of Interest,
and Other Measures to Ensure Fairness of Tender Offer” below regarding thecomposition of the Special Committee, the authority granted thereto, their specificactivities and other matters).
On top of that, at a meeting of its board of directors convened on September 17,
2024, the Company engaged in careful discussions and consideration from theperspective of the reasonableness and the like various terms and conditions of theTransactions, inclusive of the Tender Offer Price in the Transactions, regarding thequestion of whether the Company would be able to improve its corporate value
through the Transactions, based on the content of the legal advice provided by theirlegal advisor Nakamura Tsunoda & Matsumoto and the stock valuation report dated
September 13, 2024, from its financial advisor and third party calculation agent
Houlihan Lokey (hereinafter, the “Stock Valuation Report”) (as defined in Section“(3) Calculation Related Matters” below), and while giving the utmost deference
to the content of the Report submitted by the Special Committee.
As set out above in part “i) Background, Purpose and Decision Making Process
Leading up to Decision to Implement Tender Offer” of Section “(ii) Background,Purpose and Decision Making Process Leading up to Decision to Implement Tender
Offer, and Management Policy after Tender Offer,” at the Company there was anurgent need to address a variety of management issues to deal with human resource
shortage and increase personnel costs brought on by the system coming into effectfrom April 2024 to place a maximum limit on the number of labor hours for truck
drivers, the aging truck driver population and other factors, the lack oftransportation capacity and increased transportation costs, and declining demand in
the freight and truck matching business accompanying increased competition andgreater logistics efficiency, and other changes to the management environment
surrounding the Company. Specifically, it was thought that drastic measures had
to be put in place to resolve the management issues state in items (a) through (g) ofpart “i) Background, Purpose and Decision Making Process Leading up to Decision
to Implement Tender Offer” of Section “(ii) Background, Purpose and Decision
Making Process Leading up to Decision to Implement Tender Offer, andManagement Policy after Tender Offer” above.
In addition, the Company requires a large initial investment and ongoinginvestments to realize the aforementioned measures, but because these efforts areaccompanied by uncertainty regarding future earnings, in the short term there is arisk that this will bring about a deterioration in its financial status caused by adecline in the level of its profits, a deterioration in cashflow, an increase in interest31

bearing debt, and other factors, and if the Company were to implement thesemeasures while maintaining its stock listing, it would not be able to obtain asufficient evaluation from the capital markets in the short term, and it is undeniable
that this may result in a decline in company’s stock price, which would have anegative impact on all of the Company’s shareholders. Meanwhile, we believe thatthe scaling back or postponing of these measures would weaken the Company’scompetitiveness and earning power in the medium to long term.
Based on the foregoing, it was determined that the best option for realizing an
increase in the Company’s corporate value would be to take the Company private,
create a flexible and agile management structure by aligning ownership andmanagement, and to maximize the use of Bain Capital’s management support inorder to avoid a decline in the Company’s stock price and other negative impacts
on all of our shareholders, and to swiftly and boldly implement the aforementioned
measures.
In addition, the Dalton Group will indirectly hold the Company Shares after theTransactions through BCPE Nexus, but Bain Capital explained to the Company thatthe implementation of the aforementioned measures after the Transactions would
not be affected by the Reinvestment (Dalton Group), and since, as set forth in parts“(iii) Tender Agreement (Dalton Group)” and “(v) Shareholders Agreement” ofSection “(7) Matters Related to Important Agreements Associated with the Tender
Offer between the Tender Offeror and Shareholders of the Company” below, theDalton Group would have the right to appoint one (1) of the five (5) directors of
BCJ-85-1, but would not have the right to appoint directors at the Company, theCompany also concluded that the continued indirect investment by the DaltonGroup will not affect the Company’s management policy after the Transactions.
Furthermore, the Company recognizes that if the Company Shares are taken private,common demerits include (i) no longer being able to procure funding from thecapital markets through equity financing, (ii) a negative impact on hiring andretention of employees from the loss of status as a listed company, and (iii) a decline
in the creditworthiness for business partners and other stakeholders. However, inlight of the Company’s current situation, we believe that (i) will not be a major
demerit, taking into account the recent favorable fund raising environment, since
we are fully capable of procuring funding as needed through indirect financing, andwe do not foresee the need to procuring funding through equity financing in theforeseeable future. With respect to (ii) by explaining that the Company’s growthand development can be realized through the Transactions, we believe that theCompany’s employees will be able to work with a higher level of awareness thanin the past, and there will be a positive impact on hiring activities and retention, andwith regard to (iii), the Group has acquired and maintained name recognition and32social credibility through its business activities for the most part, and thedisadvantage of going private will be limited.
Based on the foregoing, as of September 17, 2024, the Company’s board of
directors reached the conclusion that the taking the Company Shares private
through the Transactions will contribute to an increase in the corporate value of theGroup.
In addition, based on the following points, the Company has determined that theTender Offer Price (JPY 10,300) is a reasonable price to ensure the benefits that allof the Company’s minority shareholders would have enjoyed, and that the Tender
Offer will give all of the Company’s minority shareholders an opportunity to sell
the Company Shares at reasonable price that includes an appropriate premium.
(a)
The Tender Offer Price exceeds the maximum price calculated using the
average market price method and comparable company method, fromamong the results calculated in the Stock Valuation Report from Houlihan
Lokey as set forth in part “(i) Procurement of Stock Valuation Report froma Financial Advisor and Third Party Calculation Agent that is Independent
from the Company” of Section “(3) Calculation Related Matters” below,
and is an amount that is within the range calculated based on the Discounted
Cashflow Method (hereinafter, the “DCF Method”).
(b)
The Tender Offer Price is an amount that adds a premium of 44.66% to JPY
7,120, the closing price for the Company Shares on the TSE Prime Market
on September 13, 2024, the business day prior to the public announcement
date for the Tender Offer, 48.89% to JPY 6,918 (here and hereinafter,
calculations of the simple average price are rounded to the nearest wholeyen), the simple average closing price for the past one (1) month period up
through that same date, 56.77% to JPY 6,570, the simple average closing
price for the past three (3) month period, and 64.67% to JPY 6,255, thesimple average closing price for the past six (6) month period, and theserespective premiums are reasonable in comparison to the median premiumson the closing price on the business date prior to the public announcement
date, and the simple average closing prices for a one (1) month period, three(3) month period and six (6) month period in the 61 management buyout(MBO) cases (excluding, however, cases where the tender offers were
implemented over multiple occasions) among the tender offers for domestic
listed companies completed by September 13, 2024, as published on andafter June 28, 2019 when the “Fair M&A Guidelines” were released by the
Ministry of Economy, Trade and Industry (percentage over closing price on
the business day prior to the public announcement date: 42.53%, percentage
over past one (1) month average: 45.16%, percentage over past three (3)

33

(c)

(d)

(e)

month average: 45.89%, percentage over past six (6) month average:
47.96%).
In the determination of the Tender Offer Price, measures were taken to
ensure the fairness of the Tender Offer Price and measures were taken to
avoid conflicts of interest, as stated in Section “(6) Measures to Ensure
Fairness of Tender Offer Purchase Price and Measures to Avoid Conflictsof Interest, and Other Measures to Ensure Fairness of Tender Offer” below,
and other considerations were given to the interests of minority shareholders.
The Tender Offer Price is a priced that was determined with the substantial
involvement of the Special Committee after the adoption of the foregoingmeasures, through multiple rounds of discussions and negotiations between
the Company and the Tender Offeror equivalent to discussions andnegotiations conducted in an arm’s length transaction.
The Tender Offer Price was also determined to be reasonable in the Reportobtained from the Special Committee, as set out in part “(iii) Establishmentof Special Committee Independent from the Company and Procurement ofReport” of Section “(6) Measures to Ensure Fairness of Tender Offer
Purchase Price and Measures to Avoid Conflicts of Interest, and Other
Measures to Ensure Fairness of Tender Offer” below.

Furthermore, with regard also to the tender offer period, and minimum number ofshares scheduled to be purchased and other trade terms and conditions related to
the Transactions, the Company found these to be fair since, as set out in part “(vii)
Securing Objective Circumstances to Ensure the Fairness of the Tender Offer” ofSection “(6) Measures to Ensure Fairness of Tender Offer Purchase Price andMeasures to Avoid Conflicts of Interest, and Other Measures to Ensure Fairness ofTender Offer” below, the tender offer period secures an opportunity all of theCompany’s shareholders and Holders of Stock Acquisition Rights to reasonably
determine whether or not they will tender shares in the Tender Offer, and secures
an opportunity for those competing offers for the acquisition of the Company
Shares by hostile takeover or the like. Furthermore, the Company’s announcementof the Summary of Company’s 2nd Quarter Financial Results is scheduled to bereleased on October 28, 2024, which is close to the last day of the tender offer
period. The announcement of the Summary of Company’s 2nd Quarter Financial
Results is not expected to vary significantly from the forecasted figures announced
by the Company on April 30, 2024. The actual results for the Summary ofCompany’s 2nd Quarter Financial Results are expected to be roughly in line withthe revised earnings forecast which was released by the Company on September 17,
2024. Additionally, the full-year forecast for the fiscal year ending March 2025, tobe included in the same report, is expected to be substantially the same as the34revised full-year forecast to be announced today. Taking into account the above
circumstances, it can be said that the time for the Company’s shareholders toconsider whether or not to tender their shares in the Tender Offer based on thedetails announced in the Summary of Company’s 2nd Quarter Financial Results has
been sufficiently ensured and that there are no particular issues with the fact thatthe announcement of the Summary of Company’s 2nd Quarter Financial Results will
be made close to the last day of the tender offer period.
Based on the foregoing, at a meeting of its board of directors convened on
September 17, 2024, the Company expressed its opinion in favor of the Tender
Offer, and resolved that all of the Company’s shareholders would be recommended
to tender their shares in the Tender Offer. In addition, with regard to the Stock
Acquisition Rights, the Company has resolved to leave the question of whether or
not the Holders of Stock Acquisition Rights will tender their shares in the Tender
Office to the discretion of all the Holders of Stock Acquisition Rights, given that
the Purchase Price for Stock Acquisition Rights has been set at JPY 1. Furthermore,
please see part “(vi) Unanimous Approval of All Directs without Interests in the
Company (Including Directors who are Members of the Audit and Other
Committees)” of Section “(6) Measures to Ensure Fairness of Tender Offer
Purchase Price and Measures to Avoid Conflicts of Interest, and Other Measures to
Ensure Fairness of Tender Offer” below regarding the method of resolution at thecorresponding meeting of the board of directors.

35

(3)

Calculation Related Matters(i)
Procurement of Stock Valuation Report from a Financial Advisor and Third Party
Calculation Agent Independent from the Companyi)Name of Calculation Agent and Relationship to Listed Company and Tender
OfferorIn expressing its opinion on the Tender Offer, the Company engaged Houlihan
Lokey to calculate the value of the Company Shares, as a measure to ensure thefairness and objectivity of the trade terms and conditions related to the Transactions,
including the Tender Offer Price. Houlihan Lokey is a financial advisor and third
party calculation agent who is independent from the Tender Offeror et al. and theCompany, it is not a related party of the Tender Offeror et al. or the Company, andit does not have any material interests that should be noted in connection with theTransactions, including the Tender Offer.
Furthermore, since the Company has implemented measures to ensure the fairnessof the Tender Offer Price and to avoid conflicts of interest at the Tender Offeror andthe Company (please see Section “(6) Measures to Ensure Fairness of Tender Offer
Purchase Price and Measures to Avoid Conflicts of Interest, and Other Measures to
Ensure Fairness of Tender Offer” below), it has not procured an opinion on thefairness of the Tender Offer Price (fairness opinion) from Houlihan Lokey.
Additionally, the remuneration paid to Houlihan Lokey in connection with theTransactions includes a contingency fee that’s is subject to the successful
completion of the Transactions and other conditions. The Company appointed
Houlihan Lokey as its financial advisor and third party calculation agent under the
aforementioned remuneration system, based on the determination that inclusion ofa contingency fee subject to the successful completion of the Tender Offer would
not negate its independence, in consideration of the standard practice in similartransactions and the merits of a compensation structure that could impose asubstantial financial burden on the Company even if the Transactions are notsuccessful. In addition, the Special Committee has confirmed that there are noissues with Houlihan Lokey’s independence.
ii)

Summary of Calculations
Houlihan Lokey, after considering which of the various valuation methods should
be adopted for calculating the value of the Company Shares, used the average
market price method since the Company Shares are listed on the TSE Prime Market
and the market price of the Company Shares is available, the comparable company
method since there are several listed companies engaged in business relatively
similar to the Company’s and it is possible to analogize the stock value bycomparison with similar companies, and the DCF Method to reflect the intrinsic
value of the Company based on its future business activities. The following are the36valuation ranges per Company Share based on the above valuation methods. The
Company obtained a Stock Valuation Report dated September 13, 2024 from
Houlihan Lokey.
The following are the valuation ranges per share of the Company Shares based on
the above respective methods.
Average market price method
Comparable company method
DCF Method

JPY 6,255 ~ JPY 7,120
JPY 7,986 ~ JPY 10.204
JPY 9,344 ~ JPY 13,288

Under the average market price method, the reference date was established as
September 13, 2024, and the valuation range per share of the Company Shares wascalculated to be from JPY 6,255 to JPY 7,120, based on the closing price for theCompany’s stock on the TSE Prime Market on the reference date (JPY 7,120), thesimple average closing price (JPY 6,918) for the one (1) month period (from August
14, 2024 through September 13, 2024), the simple average closing price (JPY6,570) for the three (3) month period (from June 14, 2024 through September 13,2024), and the simple average closing price (JPY 6,255) for the six (6) month period(from March 14, 2024 through September 13, 2024).
Under the comparable company method, NIKKON Holdings Co., Ltd., SENKOGroup Holdings Co., Ltd., AZ-COM MARUWA Holdings Inc., Maruzen Showa
Unyu Co., Ltd., SBS Holdings Inc., and HAMAKYOREX Co., Ltd. were selected
as a listed company engaged in business comparatively similar to the Company’s,
and the valuation range per share of the Company Shares was calculated to be from
JPY 7,986 to JPY 10,204 using a multiple of EBITDA to corporate value.
Under the DCF Method, the corporate value and the share value of the Company
were calculated by discounting, based on a certain discount rate, the free cash flowsthat the Company is expected to generate in and after the fiscal year ending March
2024, based on various factors including the earnings forecasts and investment
plans in the Company’s business plan for the five fiscal years from the FYE March2025 through FYE March 2029 (hereinafter, the “Business Plan”), and the valuation
range per share of the Company Shares was calculated to be from JPY 9,344 to JPY
13,288. Furthermore a discount rate adopted was 5.20% ~ 6.20%, and the ongoing
concern value was calculated by the perpetual growth method based on a permanent
growth rate of 0.00% ~ 1.00%.
Moreover, The financial forecasts based on the Business Plan prepared by theCompany and premised on calculations by Houlihan Lokey have factored in thefull year earnings forecasts for FYE March 2025 in the “Notice on Revision of
Earnings Forecasts” publicly released by the Company on September 17, 2024.
Additionally the content of the Business Plan fall shorts of the financial targets for
37

FYE March 2026 stated by the Company in the Company’s Medium Term Business
Plan (net sales of JPY 220 billion, operating profit margin of 5.0% ~ 6.0%) (in theBusiness Plan, net sales for FYE March 2026 are JPY 183,337 million, and theoperating profit margin is 4.2%),but the Company has determined that it would beappropriate to reflect changes in the current business environment, which includes
such factors as the 2024 issue, as well as personnel shortages and rising personnel
costs, the lack of transportation capacity and increased transportation costs due tothe aging truck driver population and the like, and declining demand in the freight
and truck matching business accompanying increased competition and greater
logistics efficiency, in the valuation of the Company Shares by Houlihan Lokey,
and formulated a new Business Plan. The Business Plan was confirmed andapproved by the Special Committee to be reasonable after the Company andHoulihan Lokey provided a detailed explanation to the Special Committee andengaged in a question and answer session regarding the content of and key premises
for the plan, the background to the formulation thereof, and the like, and it was
found to be reasonable by the Special Committee in terms also of the differenceswith the financial targets in the Company’s Medium Term Business Plan, since it
reflected the most recent business environment and the progress status of theCompany’s Medium Term Business Plan. In addition, the Business Plan includes
fiscal years where large increases and decreases in profits are expected, but
included fiscal years where major fluctuations in free cash flow were expected.
Specifically, in the period from FYE March 2025 through FYE March 2029, there
are plans for investment into the new construction of distribution centers near the
production bases of several of our customers, and with this, depending on
fluctuations the amount of the investment, free cash flow is expected to decline by
JPY 3,859 million (decrease of 159.67%) (Note 7) in FYE March 2026, increaseby JPY 949 million in FYE March 2027, increase by JPY 3,724 million in FYEMarch 2028, and increase by JPY 2,307 million (increase of 71.40%) in FYE March
2029. Additionally, the Company’s Business Plan and used by Houlihan Lokey inits calculations under the DCF Method does not assume the execution of theTransactions, and since at this point in time it is difficult to quantitively estimate
the corporate value improvement measures envisioned by the Tender Offeror after
the realization of the Transactions, they have not be taken into account in thefinancial projections below.
The financial projections based on the Company’s Business Plan and used by
Houlihan Lokey for the DCF analysis are as follows.
(Note 7) The decreased amount and decreased rate in the Business Plan is stated incomparison to the full-term free cash flow forecast of JPY 2,417 million for
FYE March 2025.
38

(Unit: JPY Million)

Net sales
EBITDA
Operating profit
Free cash flow

FYE
FYE
FYE
FYE
FYE
Mar 2025
Mar 2026 Mar 2027 Mar 2028 Mar 2029
(9 months)
133,559
183,337
190,266
196,337
202,878
7,951
11,693
12,05912,902
13,867
5,406
7,717
7,593
8,225
9,056
1,751

▲1,442

▲493

3,230

5,537

Houlihan Lokey did not verify the accuracy, appropriateness, or completeness of
the information provided by the Company or publicly available information whencalculating the value of the Company Shares, nor has Houlihan Lokey made any
independent evaluation or appraisal of the Group’s non-consolidated assets andliabilities (including off-balance sheet assets and liabilities), and the Company has
not obtained any appraisal or valuation report with respect to those assets andliabilities. Furthermore, Houlihan Lokey assumed that there are no undisclosed
material facts that would affect the valuation of the Company Shares and that theCompany’s financial projections (including the Business Plan and otherinformation) have been reasonably prepared based on the best currently available
estimates and judgment of the Company’s management team. Moreover, the Tender
Offer also targes the Stock Acquisition Rights, and since the Purchase Price for
Stock Acquisition Rights has been determined at JPY 1, the Company has notprocured a valuation report from a third party calculation agent or an opinion on
the fairness of the Purchase Price for Stock Acquisition Rights (fairness opinion).
In addition, all of the Stock Acquisition Rights required the approval of theCompany’s board of directors to be acquired by assignment under the Stock
Acquisition Right Term Sheet, and the assignment of the Stock Acquisition Rights
is prohibited under the Stock Acquisition Right Allocation Agreement. At ameeting of the Company’s board of directors convened on September 17, 2024, it
was resolved that the assignment to the Tender Offeror by tendering the Stock
Acquisition Rights in the Tender Offer by the all of the Holders of Stock Acquisition
Rights will be comprehensive approved as a condition for the completion of theTender Offer to make it possible to assign the Stock Acquisition Rights, and thatthe content of the Stock Acquisition Right Allocation Agreements with the Holdersof Stock Acquisition Rights who wish to assign their rights will be modified toallow for the assignment.
(4)

Prospect for Delisting and Reasoning Therefor39

As of the filing date of this document, the Company Shares are listed on the TSE Prime
Market and the NSE Premium Market, but given that the Tender Offeror has not set a
maximum number of shares scheduled to be purchased in the Tender Offer, it is possiblethat the Company Shares may be delisted through the designated procedures in accordancewith the delisting criteria of the Tokyo Stock Exchange and the Nagoya Stock Exchange,depending on the result of the Tender Offer. Even if the delisting criteria are not met uponcompletion of the Tender Offer, if the Squeeze Out Procedures are conducted after thecompletion of the Tender Offer as described in Section “(5) Policy on Reorganization, etc.
after Tender Offer (Matters Related to So-called Two-tier Takeover Strategy)” below, theCompany Shares will be delisted through the designated procedures pursuant to thedelisting criteria of the Tokyo Stock Exchange and the Nagoya Stock Exchange.
Furthermore, shareholders will not be able to trade the Company Shares on the TSE Prime
Market and NSE Premium Market after the delisting.
(5)

Policy on Reorganization, etc. after Tender Offer (Matters Related to So-called Two-tierTakeover Strategy)
As set out in part “(i) Overview of Tender Offer” of Section “(2) Basis and Reasoning for
Opinion” above, if all of the Company Shares (provided, however, that shall include theCompany Shares delivered through the exercise of the Stock Acquisition Rights, but
excluding the Non-tendered Shares, BBT Held Shares and treasury stock shares held by
the Company) and Stock Acquisition Rights cannot be acquired in the Tender Offer, once
the Tender Offer is completed, the Tender Offeror plans on engaging in Squeeze Out
Procedures under the following method.
Specifically, promptly after the sanctioning of the Tender Offer, the Tender Offeror,
pursuant to Article 180 of the Companies Act, plans on requesting that the Company
convene and extraordinary general meeting of shareholders (hereinafter, the “Extraordinary
General Shareholders Meeting”) that includes agenda items calling for a reverse stock splitof the Company Shares (hereinafter, the “Reverse Stock Split”), and a partial amendmentof the articles of incorporation to abolish the provision on number of shares constituting
one unit subject to the Reverse Stock Split taking effect. The Tender Offeror believes, fromthe perspective of improving the Company’s corporate value, that it would be best toconvene the Extraordinary General Shareholders Meeting as early as possible, and planson demanding that the company provide public notice of the establishment of a record dateduring the tender offer period so that the record date for the Extraordinary General
Shareholders Meeting is a date that is soon after the commencement of the settlement for
the Tender Offer. Although the timing of the convening of the Extraordinary General
Shareholders Meeting will vary depending on the timing of the completion of the Tender
Offer, at present it is scheduled for around January 2025. The Company plans on
accommodating this demand when it receives it from the Tender Offeror. Furthermore, the40

Tender Offeror and AICOH plan on supporting the foregoing respective proposals at theExtraordinary General Shareholders Meeting.
If the proposal for the Reverse Stock Swap is approved at the Extraordinary General
Shareholders Meeting, all of the Company’s shareholders will then hold the Company
Shares in a number proportional to the Reverse Stock Split ratio approved at theExtraordinary General Shareholders Meeting. With fractions of less than one full sharearise in the Reverse Stock Split, cash equal to the total number of these fractional shares(here and hereinafter, these fractional shares shall be rounded off if the total for thesefractional shares is a fraction of less than one full share) generated through the sale or the
like of the Company Shares to the Company or the Tender Offeror all shareholders of theCompany Shares shall be delivered to all of the Company’s shareholders incurring
fractional shares. With regard to the selling price for the Company Shares equivalent tothe sum total of these fractions, the cash produced in the sale and delivered to all of theCompany’s shareholders (excluding the Tender Offeror, AICOH and the Company) who
did not tender shares in the Tender Offer shall be calculated so as to be equal the pricecalculated by multiplying the number of the Company Shares held by all the corresponding
shareholders by the Tender Offer Price, and the plan is to request that the Company petition
the court for permission for sale by private contract. In addition, the reverse split ratio for
the Company Shares has yet to be decided as of the filing date of this document, but theTender Offeror plans on requesting the Company determine a rate that will produce
fractions of less than one full share of the Company Shares held by all of the Company’s
shareholders (excluding the Tender Offeror, AICOH and the Company) who did not tendershares in the Tender Offer, so that all of the Company Shares (excluding, however, thetreasury shares held by the Company) are held solely by the Tender Offeror and AICOH.
The Company plans on accommodating these requests from the Tender Offeror once theTender Offer is completed. Provided, however, that if shareholders who hold the Company
Shares in a number that exceeds the number of the Company Shares held by AICOH exist
or arise after the Tender Offer, the plan is for the Tender Offeror, upon mutual consultation
with AICOH, to enact necessary measures to so the Tender Offeror and AICOH will be theonly shareholders of the Company planned after the completion of the Tender Offer. The
plan is to publicly release the specific procedures related to this Reverse Stock Split as soon
as they are decided by the Tender Offeror and the Company through mutual consultation.
As a provision under the Companies Act aimed at the protection of the rights of minority
shareholders in the Reverse Stock Split, the Companies Acts stipulates that if fractions ofless than one full share are produced in the implementation of the Reverse Stock Split, theshareholders of the Company who did not tender shares in the Tender Offer (excluding theTender Offeror, AICOH and the Company) are entitled, pursuant to Article 182-4 andArticle 182-5 of the Companies Act and the provisions of other related laws and regulations,to demand that the Company purchase all of the fractional shares of less than one full shareheld thereby, at a fair price, and to petition the court for the determination of the price for41the Company Shares. Furthermore, if such a petition is filed, the purchase price will befinally adjudicated by the court. As stated above, the plan in the Reverse Stock Split is forthe number of Company Shares held by shareholders who did not tender shares in theTender Offer (excluding the Tender Offeror, AICOH and the Company) to become afractions of less than one full share, so that the shareholders who oppose the Reverse Stock
Split are able to file the foregoing petition with the court.
The timing required or method of the procedures above may be changed due to the revision
or enforcement of relevant laws and regulations, the interpretation by the authorities of
relevant laws and regulations, and other factors. However, even in such instances, theTender Offeror intends to adopt measures to ultimately deliver cash to the shareholders of
the Company who did not tender shares in the Tender Offer (excluding the Tender Offeror,
AICOH and the Company), in which case the amount of cash delivered to each shareholder
will be calculated so as to be equal to the amount produced by multiplying the number ofCompany Shares owned by the corresponding shareholders by the Tender Offer Price.
Additionally, if the Tender Offeror is unable to acquire all of the Stock Acquisition Rights
in the Tender Offer and there are outstanding Stock Acquisition Rights, the plan is torequest that the Company acquire and retire the Stock Acquisition Rights, recommend thewaiver of the Stock Acquisition Rights, and implement other procedures reasonably
required for the execution of the Transactions, or for the Tender Offeror to implement theseprocedures. Furthermore, the Company intends on cooperating if so requested.
The plan is to have the Company publicly announce the specific procedures in foregoingcase, the timing thereof and other details promptly after that are determined through mutual
consultation with the Tender Offeror.
Moreover, there is no intention to solicit the approval of all shareholders of the Company
and all Holders of Stock Acquisition Rights with respect to the Tender Offer at theExtraordinary General Meeting. Each shareholder of the Company and each Holder ofStock Acquisition Rights should consult with tax accountants and other professionals at its
own responsibility regarding the tax treatment of tendering in the Tender Offer and theabove respective procedures.
(6)

Measures to Ensure Fairness of Tender Offer Purchase Price and Measures to Avoid
Conflicts of Interest, and Other Measures to Ensure Fairness of Tender Offer
The Tender Offer is be conducted as part of the Transactions which correspond to a socalled management buyout (MBO), and from the perspective of ensuring the fairness of
the Tender Offer Price, eliminating arbitrariness in the decision-making process leading up
to the decision on the implementation of the Tender Offer, and the avoiding of conflicts ofinterest, the Tender Offeror and the Company have implemented the following measures
to ensure the fairness of the Transactions, including the Tender Offer. Furthermore, of the42following stated measures, those implemented at the Tender Offeror were done so pursuant
an explanation from the Tender Offeror.
Furthermore, the Tender Offeror believes that the establishment of a minimum number ofshares scheduled to be acquired for the so-called “Majority of Minority,” in the Tender
Offer, may bring instability to the completion of the Tender Offer, and may not contributeto the interests of all the Company’s minority shareholders who wish to tender shares in
the Tender Offer, and has not established a minimum number of shares scheduled to beacquired for the so-called “Majority of Minority” in the Tender Offer. Since the following
measures are implementing as efforts to ensure the fairness of the Tender Offer Price andefforts to avoid conflicts of interest, the Tender Offeror and the Company believe thatinterests of the Company’s minority shareholders are being given sufficient consideration.
In addition, the Special Committee, in the Report, determined that the lack of a “Majorityof Minority” condition in itself will not negate the fairness of the terms and conditions of
the Transactions, in light of the implementation status of other measures to ensure fairness,and taking into account that it can be found that fairness has been ensured in the courses of
the negotiations related to the Transactions and the procedures leading to the decision
making - reaching the same conclusion as the Company.
(i)

Procurement of Stock Valuation Report from a Financial Advisor and Third Party
Calculation Agent Independent from the Company
In expressing its opinion on the Tender Offer, the Company engaged Houlihan
Lokey to calculate the value of the Company Shares, as a measure to ensure thefairness and objectivity of the trade terms and conditions related to the Transactions,
including the Tender Offer Price, and obtained a Stock Valuation Report dated
September 13, 2024. Furthermore, Houlihan Lokey is a financial advisor and third
party calculation agent who is independent from the Tender Offeror et al. and theCompany, it is not a related party of the Tender Offeror et al. or the Company. In
addition, since the Company has implemented measures to ensure the fairness of
the Tender Offer Price and to avoid conflicts of interest at the Tender Offeror andthe Company, it has not procured an opinion on the fairness of the Tender Offer
Price (fairness opinion) from Houlihan Lokey.
Moreover, the remuneration paid to Houlihan Lokey in connection with theTransactions includes a contingency fee that’s is subject to the successful
completion of the Transactions and other conditions. The Company appointed
Houlihan Lokey as its financial advisor and third party calculation agent under the
aforementioned remuneration system, based on the determination that inclusion ofa contingency fee subject to the successful completion of the Tender Offer would
not negate its independence, in consideration of the standard practice in similartransactions and the merits of a compensation structure that could impose a43substantial financial burden on the Company even if the Transactions are notsuccessful.
In addition, the Special Committee approved a financial advisor and third party
calculation agent, since there were no issues regarding the financial advisor andthird party calculation agent selected by the Company in terms of independence
and professionalism, and the Special Committee confirmed that it would also beable to obtain professional advice as needed.
Please see Section “(3) Calculation Related Matters” above for summary of theStock Valuation Report.
(ii)

Advice from Law Firm Independent from the Company
In order to ensure the fairness and appropriateness of the decision made by theCompany’s board of directors on the Transactions, including the Tender Offer, theCompany selected Nakamura Tsunoda & Matsumoto as a legal advisor independent
from the Tender Offeror et al. and the Company, and has received the necessary
legal advice from this firm on the method and process for decision making by theCompany’s board of directors, including the various procedures related to theTransactions, and on other points of note. Furthermore, Nakamura Tsunoda &Matsumoto is not a related party of the Tender Offeror et al. and the Company, anddoes not have any material interests in the Transactions. In addition, Nakamura
Tsunoda & Matsumoto remuneration consists solely of an hourly rate irrespectiveof the success of the Transactions, and that remuneration does not include any
remuneration that is subject to the successful completion of the Transactions. The
Special Committee approved the Company’s legal advisor, since there were noissues regarding the legal advisor selected by the Company in terms of
independence and professionalism, and the Special Committee confirmed that it
would also be able to obtain professional advice as needed.

(iii)

Establishment of Special Committee Independent from the Company andProcurement of Report
Background to Establishment, etc. of the Special Committee
In light of the structural conflicts of interest that exists due to the Transactions being
conducted as part of a management buyout (MBO), on July 1, 2024, the board of
directors of the Company adopted a written resolution to establish the Special
Committee comprised of members who are independent of the Tender Offeror etal., in order to address the issues of structural conflicts of interest and information
asymmetry in the Transactions, eliminate arbitrariness in the decision-making
process of the Company’s board of directors, and ensure the fairness, transparency,
and objectivity of the Transactions. Prior to the establishment of this Special
Committee, and from an independent position from the Tender Offeror et al., in ani)44effort to build a system to consider, negotiate and make a determination on theTransactions from a perspective of improving the Company’s corporate value andensuring the interests of the Company’s minority shareholders, in mid-June 2024,
the Company explained to all of the Company’s independent outside directors atthat time, while be advised by Nakamura Tsunoda & Matsumoto, that it wouldcommence specific considerations with Bain Capital regarding the transactions
accompanying taking the Company private, and that sufficient measures would
have to be taken to address the issue of structural conflicts of interest in theTransactions and the issue of information asymmetry, to eliminate arbitrariness inthe decision-making process of the Company’s board of directors, and to ensure thefairness, transparency and objectivity of the Transactions. The Company confirmed,
while be advised by Nakamura Tsunoda & Matsumoto, that the independent outside
directors of the Company that were candidates for the members of the Special
Committee are independent of the Tender Offeror et al., do not have any materialinterests that differ from those of the ordinary shareholders regarding the successor failure of the Transactions, and are qualified to serve as members of the Special
Committee, and then, based also on the opinions of the Company’s independent
outside directors appointed three individuals, Mr. Kazuo Kawamura (anindependent outside director of the Company), Mr. Kei Sato (an independent
outside director of the Company) and Mr. Masayuki Nakano (an independent
outside director of the Company), as the members of the Special Committee, inorder to ensure a balance of knowledge, experience, and abilities for the Special
Committee as a whole while establishing a special committee of an appropriate size.
The Special Committee selected Mr. Kazuo Kawamura as the chairperson of theSpecial Committee by mutual vote. Furthermore, these three individuals were themembers of the Special Committee originally selected by the Company, and theCompany has not changed the members of the Special Committee. The Special
Committee’s remuneration consists solely of fixed remuneration irrespective of thecontent of its report, and does not include contingency remuneration that is payablesubject to the successful completion of the Transactions, including the Tender Offeror other conditions.
Additionally, the Company asked the Special Committee to: (i) find whether the
purpose of the Transactions is just and reasonable (including whether theTransactions would contribute to the improvement of the Company’s corporate
value); (ii) whether the terms and conditions of the Transactions (including thetender price and the like in the Tender Offer) ensured appropriateness and fairness;(iii) whether the interests of the Company’s shareholders were being sufficiently
considered in the Transactions through fair procedures; (iv) other than foregoing (i)through (iii), whether it was believed that the Transactions would not be detrimental
to the Company’s shareholders; (v) whether or not the Company’s board of45

directors should express an opinion in support of the Tender Offer and recommendthat the Company’s shareholders tender their shares in the Tender Offer; and (vi)examine other advisory matters related to the Transactions as found necessary theboard of directors or the representative director, based on the purpose of the Special
Committee, and state their opinion to the Company’s board of directors (hereinafter,
the matters of (i) through (vi) above are collectively referred to as the “Advisory
Matters”). In addition, the Company’s board of directors resolved that decision
making regarding the Transactions by the board of directors, including support for
the Tender Offer, would give the utmost deference to the opinion of the Special
Committee, that the board of directors would not support the Transactions if theSpecial Committee determined that the Transactions were unreasonable, and that
the Company, in its negotiations with Bain Capital regarding the trade terms andthe like for the Transactions, would report the circumstances to the Special
Committee in a timely manner, and obtain their opinion, instructions and demands
on material matters, and granting to the Special Committee authority that, among
other things, (a) would entitle the Special Committee, by majority resolution of its
members, to select a chairperson and stipulate other matters related to the operationof the Special Committee, (b) would be entitle the Special Committee, at theCompany’s burden of expense, to engage in investigation related to its duties(including making inquiries to and seeking explanations or advice from theCompany’s officers or employees related in the Transactions or the Company’s
advisors related the Transactions regarding the matters required in their duties), (c)would, from the perspective of the purpose of the Special Committee and for theconvenience of the proceeds, even in cases where the Company’s officers or
employees, the Company’s advisors or other third parties attend the Special
Committee, entitle the Special Committee to request that these attendees leave themeeting, as required, (d) would entitled the Special Committee, when foundnecessary, and at the Company’s burden of expense, to appoint attorneys,
calculation agents, certified public accountants and other advisors independent
from the Special Committee, entitled the Special Committee to seek theappointment or change of the Company’s advisors related to the Transactions, andentitled to Special Committee to also provide required instructions to theCompany’s advisors, and (e) would entitled to Special Committee, when foundnecessary, to request that the Company appoint employees to aid the duties of theSpecial Committee.
Furthermore, this resolution was adopted unanimously at a meeting of the board of
directors by directors of the Company who participated in the deliberations andresolution (8 directors of the 9 total directors, excluding Mr. Takebe).
ii)

Background to Considerations, etc. by the Special Committee
46

The Special Committee convened a total of 14 times (for a total of approximately
16.6 hours) up through September 13, 2024, and in between the respective meeting
dates, the Special Committee carefully considered and discussed the Advisory
Matters following reports, discussions and deliberations by email and othermethods. Specifically, the Special Committee received explanations from theCompany and engaged in question and answer sessions regarding the backgroundto the receipt of a proposal for Transactions, the purpose of the Transactions, thebusiness environment, the Business Plan, management issues, and similar matters,
and received an explanation from the Tender Offeror and engaged in question andanswer sessions regarding the background and reasoning leading up to the proposal
for the Transactions, the purpose of the Transactions, the terms and conditions of
the Transactions, and similar matters. Additionally, the Company, as anengagement policy in the course of the negotiations with the Tender Offeror et al.,has directly engaged in negotiations with its financial advisor Houlihan Lokey
serving as a liaison, and the Special Committee has confirmed, through the receipt
of timely reports from those in charge of the negotiations regarding the negotiation
policies and state of the negotiations, and the statement of its opinion, and provisionof instructions and demands on material aspects, that it will be entitled to be
substantially involved in the course of the negotiations related to the trade terms
and conditions. Also, it has received explanations from Houlihan Lokey regarding
the methodology and results of the calculations on the value of the Company Shares.
Furthermore, on July 1, 2024, the Special Committee appoint Mori Hamada &Matsumoto to serve as its independent legal advisor. In addition, the confirmed theextent of independence, professionalism, track records and other matters regarding
the Company’s financial advisor and third party calculation agent Houlihan Lokey
and the Company’s legal advisor Nakamura Tsunoda & Matsumoto, and approved
their appointment.
iii)

Content of Special Committee’s Determination
As the result of careful discussions and considerations regarding these Advisory
Matters, on September 17, 2024, the Special Committee unanimously submitted theReport as summarized below to the Company’s board of directors.
i.
(A)

(B)

Opinions Stated in the Report
The Special Committee believes that the Transactions would contribute to
the enhancement of the corporate value of the Company and that the
purposes of the Transactions are justifiable and reasonable.
The Special Committee believes that the fairness and appropriateness of theterms of the Transactions, including the purchase price in the Tender Offer,
have been ensured.
47

(C)

(D)

(E)

ii.
(A)

The Special Committee believes that sufficient consideration has been given
to the interests of the Company’s shareholders through fair procedures in
the Transactions.
The Special Committee believes that the decisions by the Company’s boardof directors regarding the Transactions (in other words, (a) the decision toexpress an opinion in favor of the Tender Offer and recommend that theshareholders of the Company tender their shares in the Tender Offer andleaving the decision on whether the Holders of Stock Acquisition Rights
should or should not tender their Stock Acquisition Rights in the Tender
Offer to the discretion of all Holders of Stock Acquisition Rights, and (b)the decision on the privatization procedures through the Squeeze Out
Procedures, which will be conducted after the Tender Offer as part of theTransactions) would not be disadvantageous to the Company’s minority
shareholders.
The Special Committee believes that it would be appropriate for theCompany’s board of directors to express an opinion in favor of the Tender
Offer, recommend that the shareholders of the Company tender their sharesin the Tender Offer, and leave to the Holders of Stock Acquisition Rights
the decision on whether or not to tender their Stock Acquisition Rights in
the Tender Offer.
Reasons for giving the above opinions in the Report
Whether the purposes of the Transactions are justifiable and reasonable(including whether the Transactions would contribute to the enhancementof the corporate value of the Company)(a)Business environment surrounding the Company and the
management issues of the Company
The Special Committee has the same understanding as the Company
with respect to the business environment surrounding the Company
and the management issues of the Company as described in “i)Background, Purpose and Decision Making Process Leading up to
Decision to Implement Tender Offer by the Tender Offeror.” in “(ii)Background, Purpose and Decision Making Process Leading up to
Decision to Implement Tender Offer, and Management Policy after
Tender Offer” under “(2) Basis and Reasoning for Opinion” in “3.
Content of, and Basis and Reasoning for Opinion on Tender Offer”
above. Because these management issues are not temporary but
medium- to long-term events, the Special Committee finds that there
is an urgent need to promptly implement drastic and effective
measures to deal with these issues.

48

-

(b)
-

-

Further, it is expected that competition in the logistics industry will
become even more intense in the future. Taking into consideration
the Company’s current business performance and outlook for themarket environment, if the Company continues to be listed as astand-alone company, then it will not be easy for the Company topromptly implement drastic and effective management
improvements and reforms with regard to its management issues,
survive the intensifying competitive environment and achieve
further growth.
Significance of the Transactions
The Special Committee has the same understanding as the Company
with respect to the measures for management improvements andreforms and the appropriateness of Bain Capital as a partner as
described in “i) Background, Purpose and Decision Making Process
Leading up to Decision to Implement Tender Offer by the Tender
Offeror” in “(ii) Background, Purpose and Decision Making Process
Leading up to Decision to Implement Tender Offer, andManagement Policy after Tender Offer” under “(2) Basis andReasoning for Opinion” in “3. Content of, and Basis and Reasoning
for Opinion on Tender Offer” above.
It cannot be denied that each of the measures that require prompt
implementation by the Company given its current businessenvironment and management issues could result in a decline in themarket price of the Company Shares or have other negative impacts,
and could be disadvantageous to minority shareholders. Therefore,
the Special Committee believes that it would be beneficial to takethe Company private and, by integrating the Company’s ownershipand management, establish a system that enables rapid decisionmaking on drastic measures without being overly conscious of therisk of short-term deteriorations in performance, declines in stock
prices, or other risks. Furthermore, in light of the uniqueness of theCompany’s business, the Special Committee believes that it would
be desirable in terms of enhancing the corporate value of theCompany to have the current management team implement suchmeasures in a manner that allows for continuity with the Company’s
existing business by having a full understanding of the uniquenessof the Company’s business and corporate culture. Therefore, theSpecial Committee accepts the understanding that carrying out theTransactions, which involve taking the Company private, isnecessary for the effective implementation of the abovementioned
49

-

-

(c)
-

measures and that a management buyout (MBO) in which Mr.
Takebe, a member of the Company’s founding family, remains amajor shareholder after the Company goes private is the best option,and the Special Committee did not find any unreasonable points in
the Company’s understanding.
In addition, since it would not be easy for the Company, on a standalone basis, to promptly achieve drastic and effective management
improvements and reforms with regard to its management issues,
the Special Committee believes that it would be beneficial to utilize
outside management resources based on the extensive investment
experience thereof. Among such outside management resources, theSpecial Committee considers it to be appropriate and reasonable to
make Bain Capital, which has an especially strong track record,
experience, human resources, and management know-how whencompared to other PE funds and businesses of other companies, apartner in the Transactions in order to solve the Company’s
management issues.
Because the Company’s logistics information service business has avery unique business model, the Special Committee believes that themost effective way to further strengthen the differentiator between
the Company and other companies and to enhance the corporate
value of the Company is to have the current management team,which thoroughly understands the business characteristics of thelogistics information service business, pursue a growth strategy
while maintaining independence as a company. Becoming anaffiliate under another company or conducting a business integration
would entail a high risk of losing the Company’s strengths, and there
are concerns that the Company’s corporate culture and other sourcesof corporate value would be damaged. Furthermore, in light of theCompany’s highly unique business model, synergies with anothercompany are expected to be limited. Therefore, the Company’s
choice to execute the Transactions in cooperation and collaboration
with a PE fund such as Bain Capital, rather than undergoing an
acquisition by a business of another company or business integration,is considered reasonable.
Disadvantages of the Transactions
It can be said the Company’s explanation that the disadvantages ofconducting the Transactions would be limited as described in “(iii)
Course and Reasoning to Company’s Decision in Support of theTender Offer” under “(2) Basis and Reasoning for Opinion” in “3.
50

(B)

Content of, and Basis and Reasoning for Opinion on Tender Offer”
above is also reasonable.
Furthermore, in light of the uniqueness and competitiveness of theCompany’s business, the impact of the Transactions on therelationships with its business partners is expected to be limited, andfinancing for the Transactions is also expected to have a limited
impact on the Company’s business operations.
(d)Summary
Based on the above, after careful deliberation and examination, theSpecial Committee considers that the purposes of the Transactions
are justifiable and reasonable.
Whether the fairness and appropriateness of the terms of the Transactions(including the purchase price in the Tender Offer) have been ensured(a)Results of the share valuation by an independent third-party
calculation agent
Houlihan Lokey, which is a financial advisor and third-party
calculation agent independent of the Company and the Tender
Offeror et al., used the average market price method, the comparable
company method, and the DCF Method as the calculation methods
in its Stock Valuation Report. The Special Committee did not findany unreasonable points in the assumptions and details of thecalculations made using those calculation methods.
The business plans of the Company, on which Houlihan Lokey
based its DCF method calculations, are based on the Company’s
Medium Term Business Plan covering the period from the fiscal
year ending March 31, 2022 to the fiscal year ending March 31,
2026, but adjustments have been made to reflect the progress of theCompany’s Medium Term Business Plan to date; specifically, theprospects for achieving numerical targets for net sales and operating
profit that take into account factors including labor shortages andincreases in labor costs due to the 2024 issue and aging truck drivers,
shortages in transportation capacity, increases in transportation costs,
intensifying competition in the freight and vehicle matchingbusiness, and declining demand due to streamlined logistics. The
Special Committee did not find any particularly unreasonable points
in these adjustments, and the numerical plans have not been revised
to be overly conservative. Therefore, the Special Committee
considers that the business plans are reasonable in light of theassumptions on which they are based and the current status of theCompany.
51

-

(b)
-

-

-

(c)
-

Based on the above, the Special Committee believes that the detailsof the Stock Valuation Report are reasonable and that the Tender
Offer Price exceeds the maximum price of the price range calculatedusing the average market price method and the comparable company
method and falls within the price range calculated using the DCF
Method in the Stock Valuation Report.
Premium on the market price of the Company Shares
For the Tender Offer Price, a premium of 44.66% has been added on
7,120 yen, the closing price of the Company Shares on the TSE
Prime Market on September 13, 2024, the business day immediately
preceding the announcement date of the Transactions. The Special
Committee believes that the premium has been set at a level thatgives sufficient consideration to the minority shareholders whencompared to the premium levels in cases similar to this case.
The Tender Offer Price is higher than the highest market price of theCompany, which was 9,890 yen, since the Company was listed, andis close to a P/B Ratio of 2.0, which is well above the P/B Ratio of
1.0 under which the TSE has requested to improve.
As of September 17, 2024, the Company plans to announce arevision to its second quarter consolidated earnings forecasts andfull year consolidated earnings forecasts for the fiscal year ending
March 31, 2025. While market share prices prior to September 17,
2024 were not formed based on such forecast revision, the details of
the revised earnings forecasts are relatively minor and are notrequired to be disclosed under the timely disclosure standards of theTSE. Therefore, taking into account the advice of the Company’s
financial advisor Houlihan Lokey, the forecast revision does nothave a significant impact on investors' investment decisions, and it
does not constitute a reason to deny the reasonableness of thepremium level of the Tender Offer Price or the reasonableness of theresults of the calculation using the average market price method in
the Stock Valuation Report prepared by Houlihan Lokey, which uses
as its reference period the period before the forecast revision.
Appropriateness of the Purchase Price for Stock Acquisition Rights
The Stock Acquisition Rights were issued to the Company’s
directors and employees as stock options, and none of the Holdersof Stock Acquisition Rights are planning to exercise their Stock
Acquisition Rights subject to the satisfaction of the exercise
conditions. In addition, even if the Tender Offeror were to acquire
the Stock Acquisition Rights, it would not be able to exercise the
52

(d)
-

(e)
-

-

Stock Acquisition Rights. Therefore, the Purchase Price for Stock
Acquisition Rights of 1 yen cannot be said to be unreasonable, and
it is also not particularly unreasonable that the Tender Offeror will
not obtain a valuation report or a fairness opinion.
Negotiation process and pricing process
The Special Committee discussed and negotiated the terms andconditions of the Transactions, including the Tender Offer Price,with Bain Capital. As a result, the Tender Offer Price was raised a
total of 6 (six) times, ultimately resulting in a price increase of
approximately 14.4% from the initial proposal.
Timing of the Transactions
In light of the circumstances that led to the Transactions, theCompany needs to promptly implement drastic and effective
measures as it faces serious management issues, including the 2024
issue. Therefore, the Special Committee did not find any
unreasonable points in implementing the Transactions at this timefrom the viewpoint of executing a medium- to long-term growthstrategy by taking the Company Shares private and by utilizing theknowledge of Bain Capital and receiving their support, taking into
consideration the superiority of the Company’s business base in thelogistics industry and the future potential of the business.
Furthermore, the Company’s announcement of the Summary ofCompany’s 2nd Quarter Financial Results is scheduled to be releasedon October 28, 2024, which is close to the last day of the tender offer
period. The announcement of the Summary of Company’s 2nd
Quarter Financial Results is not expected to vary significantly fromthe forecasted figures announced by the Company on April 30, 2024.
According to the explanation from the Company, the actual results
for the Summary of Company’s 2nd Quarter Financial Results are
expected to be roughly in line with the revised earnings forecast
which will be released by the Company on September 17, 2024.
Additionally, the full-year forecast for the fiscal year ending March
2025, to be included in the same report, is expected to be
substantially the same as the revised full-year forecast to beannounced today. Taking into account the above circumstances, it
can be said that the time for the Company’s shareholders to consider
whether or not to tender their shares in the Tender Offer based on
the details announced in the Summary of Company’s 2nd Quarter
Financial Results has been sufficiently ensured and that there are no
particular issues with the fact that the announcement of the
53

(C)

Summary of Company’s 2nd Quarter Financial Results will be madeclose to the last day of the tender offer period.
(f)Reasonableness of the transaction method
The Special Committee considers that (i) the methods of theTransactions, which constitute a two-step transaction to make theCompany a wholly-owned subsidiary, (ii) the Acquisition ofTreasury Stock to be conducted after the completion of the squeezeout, (iii) the Preferred Stock Subscription by AICOH to be
conducted after the completion of the Acquisition of Treasury Stock,and (iv) the reinvestment by Mr. Takebe and Dalton Group to be
conducted after the Acquisition of Treasury Stock do not unfairly
benefit AICOH, Mr. Takebe, or Dalton Group at the expense of theminority shareholders of the Company, and the Special Committee
did not find any unreasonable points in these methods.
Because the Stock Acquisition Rights and the J-ESOP Held Sharesand the BBT Held Shares of the Company are in nature retirement
benefits or retirement allowances to the directors and employees of
the Company Group, the Company intends to reimburse theeconomic benefits that the directors and employees would haveenjoyed so that the interests of the directors and employees are not
impaired when considering the purposes of each plan. The Special
Committee did not find any particularly unreasonable points in the
Company’s understanding that the reimbursement is not contrary to
the purpose of the uniformity regulations of the tender offer price(FIEA Article 27-2, Paragraph 3) given that the reimbursement will
be made at the Company’s discretion based on the purposes of eachplan, without any conditions as to whether or not the Stock
Acquisition Rights, the J-ESOP Held Shares, and the BBT Held
Shares will be tendered in the Tender Offer, and the reimbursement
will be made independently of the tendering in the Tender Offer.
(g)Summary
Based on the above, after careful deliberation and examination, theSpecial Committee believes that the fairness and appropriateness ofthe terms of the Transactions (including the Tender Offer Price) havebeen ensured.
Whether sufficient consideration has been given to the interests of theCompany’s shareholders through fair procedures in the Transactions
The Special Committee believes that sufficient consideration has been given
to the interests of the Company’s shareholders through fair procedures in
the Transactions, based on the following matters.
54

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-

-

-

-

-

-

The Company has established the Special Committee, and it can be said that
the Special Committee has been appropriately structured in order to protect
the Company’s general shareholders from an independent standpoint. In
addition, a mechanism has been secured for the Company’s board of
directors to make decisions while paying maximum respect to the decisionsof the Special Committee, and the Special Committee has the necessary
authority to function effectively.
In the Transactions, the Special Committee is directly and proactively
involved in the negotiation process between the Company and Bain Capitalwith respect to the trade terms and conditions, including the purchaseconsideration.
The Company is receiving legal advice from Nakamura Tsunoda &Matsumoto as a legal advisor independent of the Company and the Tender
Offeror et al.
From the Company’s financial advisor Houlihan Lokey as a third-party
calculation agent that has expertise independent of the Company and theTender Offeror et al., the Company has obtained advice and opinions froma financial viewpoint regarding the terms or the Tender Offer, including theTender Offer Price and the Stock Valuation Report to ensure theappropriateness of the Tender Offer Price.
Although the Company and the Special Committee have not obtained a socalled fairness opinion from an independent third-party calculation agent in
the Transactions, the Special Committee believes that not obtaining afairness opinion would not harm the fairness of the procedures, taking into
consideration the fact that (i) other sufficient measures have been taken to
ensure the fairness in the Transactions, (ii) the Special Committee has
determined that the Tender Offer Price is appropriate, (iii) it is notmandatory to obtain a fairness opinion under the Fair M&A Guidelines, and(iv) the Tender Offer Price exceeds the maximum price of the price range
calculated using the average market price method and the comparable
company method and falls within the price range calculated using the DCF
Method.
The Special Committee is receiving legal advice from Mori Hamada &Matsumoto, its own legal advisor independent of the Company and theTender Offeror et al.
After receiving the initial written proposal regarding the Transactions from
Bain Capital on June 25, 2024, the Company established a project team that
conducts examinations regarding the Transactions and discussions andnegotiations with Bain Capital. The members of the team consist only of
employees and directors of the Company who do not have any interest in
55

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-

-

the Tender Offeror et al., and that treatment is continuing. In addition,
because Mr. Takebe is a party to the Transactions, Mr. Takebe, who is also
the chairman of the Company’s board of directors, does not participate inany deliberations or resolutions at the Company’s board of directors related
to the Transactions and does not participate in any discussions or
negotiations with the Tender Offeror on behalf of the Company.
Although the Company has reached an agreement on certain matters with
the Tender Offeror in the Memorandum of Understanding regarding themaintenance of the expressed opinion stated above, the Company has not
executed any agreement that would unreasonably preclude any opportunity
for a counteroffer, and consideration has been given to ensure the fairnessof the Tender Offer.
While the shortest period of a tender offer under laws and regulations is 20
business days, the Tender Offeror intends to set the tender offer period for
the Tender Offer as 30 business days, which is a relatively long period oftime. Therefore, it is considered that the Tender Offeror is conducting anindirect market check. The Company has not conducted any proactive
market checks to investigate whether there are potential offerors in themarket. However, it is not easy to conduct such checks from the perspectiveof information management and the like, and in addition, in the Transactions,
it can be evaluated that substantial measures have been taken to ensure
fairness and that sufficient consideration has been given to the interests of
the Company’s shareholders through fair procedures. Therefore, theSpecial Committee believes that not conducting a proactive market checkin the Transactions would not harm the fairness of the procedures of theTender Offer.
Although the Tender Offeror et al. do not intend to set a so-called “majorityof minority” condition in the Tender Offer, other sufficient measures havebeen taken by the Company to ensure fairness in the Transactions, andaccordingly, the Special Committee believes that the fairness of theprocedures in the Tender Offer would not be harmed.
The Company and the Tender Offeror et al. intend to appropriately disclose
information after obtaining advice from their respective legal advisors.
It can be said that the legality of the Squeeze Out Procedures in theTransactions has also been secured with due consideration toward ensuringthat issues of coerciveness do not arise.
In addition to the above, the Special Committee has not found any otherfacts that would give rise to a presumption that the Company was subject toinappropriate influence from the Tender Offeror et al. in the course of
discussions, examinations, or negotiations for the Transactions.
56

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(D)

(E)

After examining the above matters, the Special Committee believes thatsufficient measures have been taken to ensure fairness based on the Fair
M&A Guidelines, as measures to ensure the fairness of the trade terms andconditions for the Transactions, and that sufficient consideration has been
given to the Company’s shareholders through fair procedures in theTransactions.
Whether the Transactions would be disadvantageous to the Company’s
minority shareholders
As stated in (A) above, the Special Committee considers that theTransactions would contribute to the enhancement of the corporate value of
the Company and that the purposes of the Transactions are justifiable andreasonable. In addition, as stated in (B) above, the Special Committee
believes that the fairness and appropriateness of the terms of theTransactions, including the purchase price in the Tender Offer, have been
ensured, and as stated in (C) above, the Special Committee considers thatsufficient consideration has been given to the Company’s shareholders
through fair procedures. Therefore, the Special Committee believes that thedecisions by the Company’s board of directors regarding the Transactions(in other words, (a) the decision to express an opinion in favor of the Tender
Offer and recommend that the shareholders of the Company tender theirshares in the Tender Offer and leaving the decision on whether the Holdersof Stock Acquisition Rights should or should not tender their Stock
Acquisition Rights in the Tender Offer to the discretion of all Holders ofStock Acquisition Rights, and (b) the decision on the privatization
procedures through the Squeeze Out Procedures, which will be conducted
after the Tender Offer as part of the Transactions) would not bedisadvantageous to the Company’s minority shareholders.
Whether the Company’s board of directors should express an opinion infavor of the Tender Offer and recommend that the shareholders of theCompany tender their shares in the Tender Offer
As stated in (A) above, the Special Committee considers that theTransactions would contribute to the enhancement of the corporate value of
the Company and that the purposes of the Transactions are justifiable andreasonable. In addition, as stated in (B) above, the Special Committee
believes that the fairness and appropriateness of the terms of theTransactions, including the purchase price in the Tender Offer, have been
ensured, and as stated in (C) above, fair procedures have been implemented.
Therefore, the Special Committee considers that sufficient consideration
has been given to the Company’s shareholders through fair procedures, and57

believes that the Transactions would not be disadvantageous to theCompany’s minority shareholders.
Therefore, the Special Committee believes that it is appropriate for theCompany’s board of directors to express an opinion in favor of the Tender
Offer, recommend that the shareholders of the Company tender their sharesin the Tender Offer, and leave to the Holders of Stock Acquisition Rights
the decision on whether or not to tender their Stock Acquisition Rights in
the Tender Offer.
(iv)

Procurement of Advice from Legal Advisory Independent from the Special
Committee
The Special Committee, as set out in Section “(iii) Establishment of Special
Committee Independent from the Company and Procurement of Report” above,
selected Mori Hamada & Matsumoto as a legal advisor independent from theTender Offeror et al. and the Company, and is receiving legal advance that includes
advice regarding the measures that should be adopted to ensure the fairness of theprocedures in the Transactions, the various procedures in the Transactions, and themethod and course of the Special Committee’s deliberations regarding theTransactions, and other matters.

(v)

Establishment of Consideration System Independent from the Company
The Company, as set out in part “Course and Reasoning to Company’s Decision in
Support of the Tender Offer” of Section “(2) Basis and Reasoning for Opinion”
above, has built an internal system at the Company to engage in the consideration,negotiation and determination of the Transactions from a perspective of improving
the Company’s corporate value and ensuring the interests of all the Company’s
minority shareholders, from a stance independent from the Tender Offeror et al.,for the purpose of addressing the issues of structural conflicts of interest andinformation asymmetry in the Transactions inclusive of the Tender Offer,eliminating arbitrariness in the decision-making process by the Company’s boardof directors, and ensuring the fairness, transparency and objectivity of theTransactions. This consideration system is made up of an independent team iscomprised of only 8 officers and employees who are found to be independent fromall the Tender Offeror et al., and continues to handle these matters to the filing dateof this document.
In addition, the Business Plan presented to the Tender Offeror and the Business
Plan serving as the basis for the calculation of the Company Share’s value by
Houlihan Lokey have been prepared, as needed, with the support of Houlihan
Lokey and under the guidance of this independent team, and the reasonableness of58

the content, key premises, preparation history and the like of the final Business Plan
has be confirmed and approved by the Special Committee.
Furthermore, the consideration system for the Transactions build internally at theCompany, including the matters handled thereby, is based on legal advice obtained
from Nakamura Tsunoda & Matsumoto, and the Special Committee has affirmedthat there are no issues in terms of independence.
(vi)

Unanimous Approval of Directors without Interests in the Company (Including
Directors who are Members of Audit and Other Committees)
The Company, based on the Stock Valuation Report obtained from Houlihan Lokey
and the legal advice obtained from Nakamura Tsunoda & Matsumoto, has given
careful consideration to the terms and conditions of the Transactions, including theTender Offer, while giving the utmost deference to the content of the Report.
As a result thereof, the Company’s board of directors determined that theTransactions would contribute to the improvement of the Group’s corporate value,and determined that the Tender Offer would provide a reasonable opportunity tosell the Company Shares, and at a meeting Company’s board of directors convened
on September 17, 2024, the directors of the Company participating in the
deliberations and resolution unanimously (8 directors of the 9 total directors,
excluding Mr. Takebe) resolved to express and opinion in support of the Tender
Offer and recommending that all the Company’s shareholders tender their shares in
the Tender Offer, and to leave the question of whether or not the Holders of Stock
Acquisition Rights will tender their shares in the Tender Office to the discretion of
all the Holders of Stock Acquisition Rights.
Furthermore, of the Company’s directors, Mr. Takebe is scheduled to reinvest a
portion of the consideration he will receive upon the completion of the Tender Offer
through the tendering of the Company shares he holds in the Tender Offer, andacquired the Tender Offeror’s common stock shares, and as such, from theperspective of avoiding the suspicion of a conflict of interest, he did not participate
in any of the deliberations and resolutions at the aforementioned board of directors
meeting, and additionally he has not participated in any discussions andnegotiations with the Tender Offeror from the Company’s standpoint.

(vii)

Securing Objective Circumstances to Ensure the Fairness of the Tender Offer
The minimum period for tendering and the like in a tender office is prescribed as
20 business days under laws and regulations, yet the Tender Offeror has establisheda tender offer period of 30 business days. The establishment of a comparatively
longer tender offer period will ensure that all of the Company’s shareholders andall of the Holders of Stock Acquisition Rights will have an adequate opportunity todetermine whether they will tender their shares in the Tender Offer, and is an59attempt to ensure the fairness of the Tender Offer by providing entities other than
the Tender Offeror with an opportunity to make competing offers or the like for theCompany Shares. In addition, the Tender Offeror, in the Memorandum ofUnderstanding with the Company (here and hereinafter as defined in part “(vi)Memorandum of Understanding on Support of Tender Offer” of Section “(7)Matters Related to Important Agreements Associated with the Tender Offer
between the Tender Offeror and Shareholders of the Company” below) has reached
an agreement that, in the period from the execution date of the Memorandum ofUnderstanding through the time the Squeeze Out Procedures take effect, it will not
directly or indirectly (i) reach an agreement on the Competing Transaction(Company) (here and hereinafter as defined in part “(vi) Memorandum ofUnderstanding on Support of Tender Offer” of Section “(7) Matters Related toImportant Agreements Associated with the Tender Offer between the Tender
Offeror and Shareholders of the Company” below) with an entity other than theTender Offeror (including the expression of an opinion in support of or
recommending tendering the corresponding Competing Transaction (Company),(ii) provide information related to the Group or other information with regard to theCompeting Transaction (Company), or (iii) propose, solicit, offer or request
discussions for this Competing Transaction (Company), or engage in any
discussions or negotiations related this Competing Transaction (Company), but thisdoes not apply with regard to the third party making a Competing Proposal(Company) here and hereinafter as defined in part “(vi) Memorandum ofUnderstanding on Support of Tender Offer” of Section “(7) Matters Related toImportant Agreements Associated with the Tender Offer between the Tender
Offeror and Shareholders of the Company” below), and the Tender Offeror has notreached any agreements that restricts the Company from contacting competingbidders, so as to unjustly restrict tender offers and the like from entities other than
the Tender Offeror, and has given consideration so not to hinder opportunities forcompeting bids.
(7)

Matters Related to Important Agreements Associated with the Tender Offer between theTender Offeror and Shareholders of the Company(i)
Non-tender Agreement
The Tender Offeror will enter into the Non-tender Agreement with AICOH as of
September 17, 2024, under which it is agreed that none of the Company Shares held
by AICOH (2,694,000 shares, holding ratio: 28.69%) will be tendered in the Tender
Offer, that AICOH will support the proposal on the Reverse Stock Split with regard
to all of the Company Shares held thereby at the Extraordinary General
Shareholders Meeting, and that once the Reverse Stock Split takes effect, AICOH
will accommodate the Acquisition of Treasury Stock and sell all of the Non60

tendered Shares to the Company. In addition, the following content has been agreed
to under the Non-tender Agreement. Furthermore, except for the Non-tender
Agreement, no agreements have been entered into by and between the Tender
Offeror and AICOH regarding the Transactions.
a)
AICOH, except in those instances otherwise expressly prescribed in the
Non-tender Agreement, shall not assign, establish security in or otherwise
dispose of all or a portion of the Company Shares it holds (including but notlimited tendering shares in tender offers other than the Tender Offer), andshall not acquire the Company Shares, and the Stock Acquisition Rights or
the rights associated therewith. In addition, AICOH (i) shall not, and shallnot have others engage in any actions (including but not limited agreementswith third parties, offers for agreements, the inducement, acceptance,
discussion, negotiation and solicitation of offers, of the provision of
information) that do or may compete, contradict or conflict, directly or
indirectly, with the Tender Offer or other transactions contemplated under
the Non-tender Agreement, with entities other than the Tender Offer, and(ii) shall immediately provide the Tender Offeror with notice when
receiving solicitations, proposals, the provision of information or offers
related to these corresponding actions from third parties other than theTender Offeror, and shall engage in mutual good faith consultation with theTender Offeror regarding the responses to these third parties.
b)
In the period from the execution date of the Non-tender Agreement throughcompletion of the Acquisition of Treasury Stock, AICOH must not exercise
rights to seek convocation, shareholder proposal rights or other shareholder
rights in general meetings of the Company’s shareholders without the priorwritten consent of the Tender Offeror.
c)
AICOH, in the event it is eligible to vote in a general meetings of theCompany’s shareholders in the period from the execution date of the Nontender Agreement through the effective date of the Reverse Stock Split,
shall not exercise its voting rights associated with the Company Shares in
the corresponding general meeting of shareholders in opposition to any
submitted (i) proposals related to dividends or other distributions ofsurpluses, (ii) proposals related to shareholder proposals, and (iii) proposals
that, if approved, will, or are reasonably expected to have a material adverse
effect on the Company’s financial status, business performance, cash flow,business, assets, liabilities or future earnings plans, or forecasts therefor.
d)
In the event the Reverse Stock Split takes effect, at a general meeting of theCompany’s shareholders convened on or after the effective date of theReverse Stock Split, AICOH shall exercise voting rights and all other rights
in accordance with the instructions of the Tender Offeror in the
61

e)
f)

(ii)

corresponding general meeting of shareholders for all of the Company
Shares it holds, and shall enact measures in order to appropriately reflect
the will of the Tender Offeror.
AICOH shall engage in the Preferred Stock Subscription after the
Reinvestment (Founding Family).
Under the Non-tender Agreement, the following instances are prescribed as
grounds for cancellation: (i) instances where the total number of shares andthe like tendered in the Tender Offer does not meet the minimum number ofthe shares scheduled to be acquired, (ii) instances where the other party (inthe case of AICOH, meaning the Tender Offer, and in the case of the Tender
Offer meaning AICOH) is in material breach of its duties or material breachof its representations and warranties under the Non-tender Agreement, (iii)
instances where the Tender Offer is not commenced by December 31, 2024,
due to grounds attributable to one’s own fault, and (iv) instances where theTender Offeror withdraws the Tender Offeror; provided, however, that evenin the event the Non-tender Agreement is cancelled pursuant to (i), theobligations of AICOH set out in foregoing item a) shall remain in effect fora period of 18 months from the ending date of the Non-tender Agreement.

Tender Agreement (Mr. Takebe)
The Tender Offeror will enter into the Tender Agreement (Mr. Takebe) with Mr.
Takebe on September 17, 2024, under which it is agreed that all of the Company
Shares held by Mr. Takebe (179,200 shares, holding ratio: 1.91%) will be tenderedin the Tender Offer. In addition, the Tender Offeror has agreed to the following
content under the Tender Agreement (Mr. Takebe), and Mr. Takebe’s tendering ofshares is not a condition precedent. Furthermore, with the exception of the Tender
Agreement (Mr. Takebe) and the Shareholders Agreement, the Tender Offeror has
not entered into agreements with Mr. Takebe related to the Transactions, and withthe exception of the payment of the Tender Offer Price, it will grant no benefits to
Mr. Takebe at the time of the Tender Offer.
a)Mr. Takebe, except in those instances otherwise expressly prescribed in theTender Agreement (Mr. Takebe), shall not assign, establish security in orotherwise dispose of all or a portion of the Company Shares he holds(including but not limited tendering shares in tender offers other than theTender Offer), and shall not acquire the Company Shares, and the Stock
Acquisition Rights or the rights associated therewith. In addition, Mr.
Takebe (i) shall not engage in any actions (including but not limited
agreements with third parties, offers for agreements, the inducement,
acceptance, discussion, negotiation and solicitation of offers, of the
62

b)

c)

d)

e)

f)

provision of information) that do or may compete, contradict or conflict,directly or indirectly, with the Tender Offer or other transactions
contemplated under the Non-tender Agreement, with entities other than theTender Offer, and (ii) shall immediately provide the Tender Offeror with
notice when receiving solicitations, proposals, the provision of information
or offers related to these corresponding actions from third parties other than
the Tender Offeror, and shall engage in mutual good faith consultation with
the Tender Offeror regarding the responses to these third parties.
In the period from the execution date of the Tender Agreement (Mr. Takebe)through the start date for the settlement associated with the Tender Offer,
Mr. Takebe must not exercise rights to seek convocation, shareholder
proposal rights or other shareholder rights in general meetings of theCompany’s shareholders without the prior written consent of the Tender
Offeror.
Mr. Takebe, in the event he is eligible to vote in a general meetings of theCompany’s shareholders in the period from the execution date of the Tender
Agreement (Mr. Takebe) through the start date for the settlement associatedwith the Tender Offer, shall not exercise his voting rights associated with
the Company Shares in the corresponding general meeting of shareholders
in opposition to any submitted (i) proposals related to dividends or other
distributions of surpluses, (ii) proposals related to shareholder proposals,and (iii) proposals that, if approved, will, or are reasonably expected to havea material adverse effect on the Company’s financial status, businessperformance, cash flow, business, assets, liabilities or future earnings plans,or forecasts therefor.
In the event the Tender Offer is completed, if a general meeting of theCompany’s shareholders setting the record date for the voting on a dateprior to the commencement date for the settlement associated with theTender Offer is convened on or after the commencement date for thesettlement associated with the Tender Offer, Mr. Takebe shall exercise
voting rights and all other rights in accordance with the instructions of theTender Offeror in the corresponding general meeting of shareholders for allof the Company Shares he holds, and shall enact measures in order toappropriately reflect the will of the Tender Offeror.
Mr. Takebe, after the completion of the Acquisition of Treasury Stock, shallengage in the Reinvestment (Founding Family) subject to the completion of
the Acquisition of Treasury Stock.
Under the Tender Agreement (Mr. Takebe), the following instances areprescribed as grounds for cancellation: (i) instances where the total numberof shares and the like tendered in the Tender Offer does not meet the63minimum number of the shares scheduled to be acquired, (ii) instanceswhere the other party (in the case of Mr. Takebe, meaning the Tender Offer,and in the case of the Tender Offer meaning Mr. Takebe) is in material
breach of its duties or material breach of its representations and warranties
under the Tender Agreement (Mr. Takebe), (iii) instances where the Tender
Offer is not commenced by December 31, 2024, due to grounds attributable
to one’s own fault, and (iv) instances where the Tender Offeror withdraws
the Tender Offeror; provided, however, that even in the event the Tender
Agreement (Mr. Takebe) is cancelled pursuant to (i), the obligations of
AICOH set out in foregoing item a) shall remain in effect for a period of 18
months from the ending date of the Non-tender Agreement.

(iii)

Tender Agreement (Dalton Group)
The Tender Offeror will enter into the Tender Agreement (Dalton Group) with the
Dalton Group on September 17, 2024, under which it is agreed that all of theCompany Shares held by the Dalton Group (1,698,800 shares, holding ratio:
18.09%) will be tendered in the Tender Offer; provided, however, that in the eventa third party initiates a tender offer targeting the acquisition of all of the Company’s
Shares at a tender price that exceeds JPY 12,500 (hereinafter, the “Competing
Tender Offer (Dalton Group”), and the Special Committee issues an affirm report
regarding the expression of an opinion in support or neutral opinion of thecorresponding Competing Tender Offer (Dalton Group) by the Company’s boardof directors, and the Company actual expresses an approval opinion or neutral
opinion on the corresponding Competing Tender Offer (Dalton Group), the DaltonGroup shall be entitled to request mutual consultation with the Tender Offeror
regarding the modification of the Tender Offer Price, insofar as this not breach its
obligations prescribed in the Tender Agreement (Dalton Group). The Dalton Groupshall be entitled to be released from the aforementioned tender obligation in theevent the Tender Offeror fails to modify the Tender Price to an amount that exceeds
the tender price associated with the Competing Tender Offer (Dalton Group), by
the seventh business day as reckoned from the date of the request for mutual
consultation, or by the business day prior to the last day of the tender offer period,
whichever comes first; provided, however, that the Dalton Group shall tender all of
the Company Shares it holds in the Tender Offer in the event the Tender Offer Priceexceeds the tender price associated with the Competing Tender Offer (DaltonGroup) during the tender offer period for the Competing Tender Offer (DaltonGroup). In addition, the Tender Offeror has agreed to the following content under
the Tender Agreement (Dalton Group), and the Dalton Group’s tendering of sharesis not a condition precedent. Furthermore, with the exception of the Tender64

Agreement (Dalton Group), the Tender Offeror has not entered into agreementswith the Dalton Group related to the Transactions, and with the exception of thepayment of the Tender Offer Price, it will grant no benefits to the Dalton Group at
the time of the Tender Offer.
a)
In the period from the execution date of the Tender Agreement (DaltonGroup) through the start date for the settlement associated with the Tender
Offer, the Dalton Group must not exercise rights to seek convocation,
shareholder proposal rights or other shareholder rights in general meetingsof the Company’s shareholders without the prior written consent of theTender Offeror.
b)
The Dalton Group, in the event it is eligible to vote in a general meetings of
the Company’s shareholders in the period from the execution date of theTender Agreement (Dalton Group) through the start date for the settlement
associated with the Tender Offer, shall not exercise its voting rights
associated with the Company Shares in the corresponding general meetingof shareholders in opposition to any submitted (i) proposals related todividends or other distributions of surpluses, (ii) proposals related toshareholder proposals, and (iii) proposals that, if approved, will, or arereasonably expected to have a material adverse effect on the Company’s
financial status, business performance, cash flow, business, assets, liabilities
or future earnings plans, or forecasts therefor.
c)
In the event the Tender Offer is completed, if a general meeting of theCompany’s shareholders setting the record date for the voting on a dateprior to the commencement date for the settlement associated with theTender Offer is convened on or after the commencement date for thesettlement associated with the Tender Offer, the Dalton Group shall exercise
voting rights and all other rights in accordance with the instructions of theTender Offeror in the corresponding general meeting of shareholders for allof the Company Shares he holds, and shall enact measures in order toappropriately reflect the will of the Tender Offeror.
d)
The Dalton Group, after the Reverse Stock Split takes effect, shall engage
in the Reinvestment (Dalton Group) subject to the Reverse Stock Split
taking effect.
e)
As a condition for the completion of the Reinvestment (Dalton Group) the
Dalton Group shall have the right to designate one director at the BCJ-851.
(iv)

Tender Agreement (Mr. Shimizu)
The Tender Offeror will enter into the Tender Agreement (Mr. Shimizu) with Mr.
Shimizu as of September 17, 2024, under which it is agreed that all of the Company
65

Shares held by the Mr. Shimizu (30,600 shares, holding ratio: 0.33%) will betendered, and all of the Stock Acquisition Rights held by Mr. Shimizu (number ofstock acquisition rights held: 200 units (target number of Company Shares: 20,000
shares; holding ratio: 0.21%)) will not be tendered in the Tender Offer; provided,
however, that Mr. Shimizu shall be entitled to withdraw the tender of his shares in
the Tender Offer (x) in the event an entity other than the Tender Offeror initiates atender offer that targets the Company Shares and Stock Acquisition Rights andcompletes with the Tender Offer (provided, however, that this must target taking
the Company Private, not prescribe a maximum number of shares scheduled to beacquired, and not prescribe a minimum number of shares scheduled to be acquired
so that the Company can surely be taken private upon the completion of the tender
offer; hereinafter “Competing Tender Offer (Mr. Shimizu)”), or (y) in the event theCompany receives a feasible, legally binding and serious proposal related to atransaction (including a transaction for acquiring the Company Shares or atransaction for the disposition of all or a material portion of the Group’s shares orbusiness, whether by tender offer, restructuring or by other means; hereinafter, the“Competing Transaction (Mr. Shimizu)”) which substantially conflicts with theTransactions, or which will, or is at a specific risk of rendering the execution of theTransactions difficult (at the very least, there must be a reasonable expectation forthe securing of funding for the implementation of the corresponding Competing
Transaction (Mr. Shimizu), there are no circumstances which could reasonably be
determined to substantially lower the probability of obtaining clearance and otherpermits, approvals and the like under the competition laws of respective countries
for the implementation of the corresponding Competing Transaction (Mr. Shimizu)
based on the information reasonably attainable by the Company at that point in time,
and the consideration and other terms and conditions of the corresponding
Competing Transaction (Mr. Shimizu) are not substantially inferior to the terms andconditions associated with the Tender Offer; hereinafter, the “Competing Proposal(Mr. Shimizu)”), and the Company’s board of directors withdraws or modifies theopinion it has expressed in support of the Tender Offer, and publicly releases anopinion in favor of the Competing Tender Offer (Mr. Shimizu) or Competing
Proposal (Mr. Shimizu) or intent equivalent thereto (if the content of the Counter
Proposal (Mr. Shimizu) calls for types of transactions other than tender offers). In
addition, the Tender Offeror has agreed to the following content under the Tender
Agreement (Mr. Takebe), and Mr. Takebe’s tendering of shares is not a condition
precedent. Furthermore, with the exception of the Tender Agreement (Mr. Shimizu),
the Tender Offeror has not entered into agreements with Mr. Takebe related to theTransactions, and with the exception of the payment of the Tender Offer Price, itwill grant no benefits to Mr. Takebe at the time of the Tender Offer.

66

a)

b)

c)

d)

(v)

The tendering of the Company Shares held by Mr. Shimizu in the Tender
Offer, in the event the Tender Offer has commenced, shall be conditioned
preceding on the Company expressing an opinion in support of the Tender
Offer, and not withdrawing or modifying this opinion.
In the period from the execution date of the Tender Agreement (Mr.
Shimizu) through the start date for the settlement associated with the Tender
Offer, Mr. Shimizu must not exercise rights to seek convocation,
shareholder proposal rights or other shareholder rights in general meetingsof the Company’s shareholders without the prior written consent of theTender Offeror.
Mr. Shimizu, in the event he is eligible to vote in a general meetings of theCompany’s shareholders in the period from the execution date of the Tender
Agreement (Mr. Shimizu) through the start date for the settlement
associated with the Tender Offer, shall not exercise his voting rights
associated with the Company Shares in the corresponding general meetingof shareholders in opposition to any submitted (i) proposals related todividends or other distributions of surpluses, (ii) proposals related toshareholder proposals, and (iii) proposals that, if approved, will, or arereasonably expected to have a material adverse effect on the Company’s
financial status, business performance, cash flow, business, assets, liabilities
or future earnings plans, or forecasts therefor.
In the event the Tender Offer is completed, if a general meeting of theCompany’s shareholders setting the record date for the voting on a dateprior to the commencement date for the settlement associated with theTender Offer is convened on or after the commencement date for thesettlement associated with the Tender Offer, Mr. Shimizu shall exercise
voting rights and all other rights in accordance with the instructions of theTender Offeror in the corresponding general meeting of shareholders for allof the Company Shares he holds, and shall enact measures in order toappropriately reflect the will of the Tender Offeror.

Shareholders Agreement
BCPE Nexus will enter into the Shareholders Agreement with Mr. Takebe as of
September 17, 2024, containing the following content regarding the managementof the Tender Offeror and the Company after the Transactions and the handling of
the shares of BCJ-85-1 following the Reinvestment (Founding Company).
a)Mr. Takebe shall cause the Takebe Family Asset Management Company
join as a party to the Shareholders Agreement, and the exercise of voting
rights and other shareholder rights at general meetings of shareholders
associated with the Shares of BCJK-85-1 held by Mr. Takebe and the Takebe
67

b)

c)

d)

e)

f)

(vi)

Family Asset Management Company (hereinafter, in this item (v),individually and collectively, the “Counterparty Shareholder”) and theexercise of rights under the Shareholders Agreement shall be performed by
Mr. Takebe as a proxy for the Counterparty Shareholder.
The Company’s board of directors shall have 6 directors, and theCounterparty Shareholder shall have the right to appoint 2 directors and
BCPE Nexus shall have the right to appoint 4 directors.
Once BCJ-85-1 becomes a company establishing a board of directors, boardof directors of BCJ-85-1 shall have 5 directors, and the Counterparty
Shareholder shall have the right to appoint 1 director and the BCPE Nexus
shall have the right to appoint 4 directors.
The Counterparty Shareholder must not assign, provide as security or
dispose of by other method (including disposition by merger, company split,
business transfer or by other method) to a third party the Shares of BCJ-851 it holds.
In the event the BCPE Nexus wishes to assign all or a portion of the Sharesof BCJ-85-1 it holds to a third party, if after the assignment the percentage
of voting rights for the Shares of BCJ-85-1 held by BCPE Nexus falls below
50%, the Counterparty Shareholder shall be entitled to seek the priority
purchase of the corresponding assignment.
In the event BCPE Nexus assigns all of the Shares of BCJ-85-1 to a third
party, (i) BCPE Nexus shall be entitled to demand that the Counterparty
Shareholder assign the Shares of BCJ-85-1 held by the Counterparty
Shareholder to a third party, under the same terms and conditions, and (ii)in the event such a demand is not made, the Counterparty Shareholder shallbe entitled to demand that the Shares of BCJ-85-1 it holds be sold to a third
party.

Memorandum of Understanding on Support of Tender Offer
The Tender Offeror shall enter into a memorandum of understanding dated
September 17, 2024, with the following content related to the execution of theTransactions (hereinafter, the “Memorandum of Understanding”), with theCompany.
a)
The Company, on the condition that the Special Committee issues anaffirmative report regarding the issuance of a opinion by the Company’sboard of directors in support of the Tender Offer, recommending that theCompany’s shareholders tender their shares in the Tender Offer, and leaving
the decision on whether the Holders of Stock Acquisition Rights tender theirshares in the Tender Offer to the discretion of the Holders of Stock
Acquisition Rights, and does not withdraw or modify this report, shall68express a supporting opinion on the execution date of the Memorandum ofUnderstanding, and during the tender offer period, shall sincerely provide
cooperation as needed to see that as many shareholders as possible tendershares in the Tender Offer. Furthermore, on the condition that this report is
not withdrawn or modified, the Company shall maintain its supporting
opinion, and shall not engage in a resolution of its board of directors towithdraw or modify this opinion, in the period from the execution date of
the Memorandum of Understanding through the last day of the tender offer
period; provided, however, that (x) in the event an entity other than theTender Offeror initiates a tender offer that targets the Company Shares andcompletes with the Tender Offer (provided, however, that this must target
taking the Company Private, not prescribe a maximum number of shares
scheduled to be acquired, and not prescribe a minimum number of shares
scheduled to be acquired so that the Company can surely be taken private
upon the completion of the tender offer; hereinafter “Competing Tender
Offer (Company)”), or (y) in the event the Company receives a feasible,
legally binding and serious proposal related to a transaction (including atransaction for acquiring the Company Shares or a transaction for the
disposition of all or a material portion of the Group’s shares or business,whether by tender offer, restructuring or by other means; hereinafter, the“Competing Transaction (Company)”) which substantially conflicts with
the Transactions, or which will, or is at a specific risk of rendering theexecution of the Transactions difficult (at the very least, there must be areasonable expectation for the securing of funding for the implementationof the corresponding Competing Transaction (Company), there are no
circumstances which could reasonably be determined to substantially lower
the probability of obtaining clearance and other permits, approvals and thelike under the competition laws of respective countries for the
implementation of the corresponding Competing Transaction (Company)
based on the information reasonably attainable by the Company at that point
in time, and the consideration and other terms and conditions of thecorresponding Competing Transaction (Company) are not substantiallyinferior to the terms and conditions associated with the Tender Offer;
hereinafter, the “Competing Proposal (Company)”), if the Company’s boardof directors determines that it can be reasonably found there is no concernthat the maintenance of the opinion in support of the Tender Offer, despite
the initiation of the Competing Tender Offer (Company) for the receipt of
the Competing Proposal (Company), will not breach the Company’s boardof directors’ duty of care of a good manager, the Company shall be entitled
to request mutual consultations with the Tender Offeror regarding the
69

b)

c)

modification of the Tender Offer Price or other terms and conditions
associated with the Tender Offer (hereinafter, the “Tender Offer Price, etc.
(Company)” as long as it does not breach its obligations prescribed in the
Memorandum of Understanding, and in the event the Company makes sucha request to the Tender Offeror, the Company shall promptly engage insincere mutual consultation with the Tender Offeror to ensure an
opportunity for the Tender Offeror to reconsider the Tender Offer Price, etc.
(Company) to a reasonable extent, and in the ev3nt this request is madeduring a period within 7 business days retroactive to the last day of thetender offer period, the Tender Offeror shall extend the tender offer period
to a date that ensures at least 5 business days from the Re-proposal Due
Date (defined below). In the event the Tender Offeror fails submit a reproposal modifying the Tender Offer Price, etc. (Company) to a level that
substantially equal to or better than the tender price and other terms andconditions associated with the Competing Tender Offer (Company) or theCompeting Proposal (Company by the date on which 7 business days has
lapsed since the corresponding request was made to the Tender Offeror or
the 5th business day prior to the last day of the tender offer period, whichevercomes last (“Re-proposal Due Date”), or in the event that Company’s boardof directors has determined that it can be reasonably found there is noconcern that the maintenance of the opinion in support of the Tender Offer,despite the issuance of a re-proposal by the Tender Offeror, will not breach
the Company’s board of directors’ duty of care of a good manager, theCompany shall be entitled to engage in a resolution of the board of directorsthat withdraws or modifies this opinion in support.
The Company and the Tender Offer shall implement the Squeeze Out
Procedures and Acquisition of Treasury Stock subject to the completion of
the Tender Offer.
In the period from the execution date of the Memorandum of Understanding
through the time the Squeeze Out Procedures take effect, the Company must
not directly or indirectly (i) reach an agreement on the Competing
Transaction (Company) with an entity other than the Tender Offeror(including the expression of an opinion in support of or recommending
tendering the corresponding Competing Transaction (Company), or (ii)
propose, solicit, offer or request discussions for this Competing Transaction(Company), or engage in any discussions or negotiations related thisCompeting Transaction (Company); provided, however, that the foregoingprovision shall not be limited to cases in which a Competing Proposal(Company) is received, and this is conducted with the third party that madethe corresponding Competing Proposal (Company).
70

(8)

Miscellaneous(i)
Public Release of “FYE March 2025 Summary of 1st Quarter Financial Results[Japan GAAP] (Consolidated)”
The Company released its FYE March 2025 Summary of 1st Quarter Financial
Results [Japan GAAP] (Consolidated) dated July 29, 2024. For details, please see
the corresponding public release.
(ii)

Public Release of “Notice on Revision (undistributed) of Dividend Forecast) for
FYE March 2025”
At a meeting of the board of directors convened on September 17, 2024, theCompany resolved that it would not pay interim dividends and term-end dividends
in FYE March 2025. For details, please see the corresponding public release.

(iii)

Public Release of “Notice on Revision of Earnings Forecasts
On September 17, 2024, the Company provided public notice regarding the revisionof its consolidated earnings forecasts for the 2nd quarter (interim) and full term of
FYE 2024 (April 1, 2024 ~ March 31, 2025). Please see the content of this public
notice regarding the details.

4. 【Number of Share Certificates, Etc. Held by Officers and the Number of Voting Rights forsuch Share Certificates, Etc.】(1)

Common Stock Shares
Name
Masahisa Shimizu
Atsunori Takebe

Yasuhiro Jinno

Ryo Kambayashi
Kei Sato
Kuniko Usagawa
Eiji Shibuya

Number of Shares
Held (shares)

Title
Director andChief Advisor
Chairman ofBoard Directors
Representative
Director,
President andExecutive Officer
Director andExecutive Officer
Outside Director
Outside Director
Director
71

Number of Voting
Rights (units)

30,760307

179,383

1,793

1,835

18

1,261

12

130

1

(Audit andSupervisory
Committee
Member)Director(Audit andSupervisory
Kazuo Kawamura
Committee
Member)Director(Audit andMasayuki Nakano
Supervisory
Committee
Member)(Note 1) The titles, number of shares held and number of voting rights are as of thesubmission date of this document.
(Note 2) The number of shares held and number of voting rights each include the numberof the Company Shares (rounded down to the decimal point) indirectly held
through the Company’s officer shareholding plan and the number of voting rights
associated therewith.
(Note 3) The Company has appointed one (1) alternate director who is member of the Audit
and Supervisory Committee as set forth in Article 329, Paragraph 3 of theCompanies Act, to prepare for any instance where there is shortage in the numberof directors who are member of the Audit and Supervisory Committee prescribedunder laws and regulations. The number of Share Certificates, etc. held by thealternate director and Audit and Supervisory Committee member as well as thenumber of voting rights associated with these Share Certificates, etc. are as
follows.
Number of Shares
Number of Voting
Name
Title
Held (shares)
Rights (units)
Alternate Outside
Director and
Audit and
Takuro Takeo
100
1
Supervisory
Committee
Member(2)

Stock Acquisition Rights

72

Name

Title

Number ofUnits Held

Masahisa
Shimizu

Number ofConverted
Shares (shares)

Number of
Voting Rights on
Converted
Shares (units)

Director and
200
20,000200
Chief Advisor
Chairman ofAtsunori
Board
TakebeDirectors
Representative
Director,
Yasuhiro
President and
8
800
8
Jinno
Executive
Officer
Director andRyo
Executive
3
300
3
Kambayashi
Officer
OutsideKei Sato
Director
KunikoOutsideUsagawa
Director
Director(Audit andEiji Shibuya
Supervisory
Committee
Member)Director(Audit and
Kazuo
Supervisory
KawamuraCommittee
Member)Director(Audit andMasayukiSupervisory
NakanoCommittee
Member)(Note 1) The titles, number of units held, number of converted shares and number of voting
rights on converted shares are as of the submission date of this document.

73

(Note 2) Mr. Masahisa Shimizu, Director and Chief Advisor, holds 120 units of the 1st
Series Stock Acquisition Rights and 80 units off the 2nd Series Stock Acquisition
Rights.
(Note 3) Mr. Yasuhiro Jinno, Representative Director, President and Executive Officer,
holds 5 units of the 1st Series Stock Acquisition Rights and 3 units off the 2nd Series
Stock Acquisition Rights.
(Note 4) Mr. Ryo Kambayashi, Director and Executive Officer, holds 3 units off the 2nd
Series Stock Acquisition Rights.
(Note 5) The Company has appointed one (1) alternate director who is member of the Audit
and Supervisory Committee as set forth in Article 329, Paragraph 3 of theCompanies Act, to prepare for any instance where there is shortage in the numberof directors who are member of the Audit and Supervisory Committee prescribedby laws and regulations. The number of stock acquisition rights held by thealternate director and Audit and Supervisory Committee member, the number ofconverted shares and the number of voting rights on converted shares are as
follows.
Number of
Number of
Voting Rights on
Number of
Name
Title
Converted
Converted
Units Held
Shares (shares)
Shares (units)
Alternate
Director and
Audit and
Takuro Takeo
Supervisory
Committee
Member5.

【Details on the Provision of Benefits by the Tender Offeror or its Special Interested
Parties】
Not applicable.

6.

【Response Policy Related to the Basic Policy on the Control of the Company】
Not applicable.

7.

【Questions for the Tender Offeror】
Not applicable.

74

8.

【Request for the Extension of the Tender Offer Period】
Not applicable.
End of Document75