[Translation]
July 30, 2019
TO OUR SHAREHOLDERS
Company Name:
Representative:

Contact:

WACOAL HOLDINGS CORP.
Hironobu Yasuhara,
Representative Director and President(Code Number: 3591)(Tokyo Stock Exchange, First Section)
Akira Miyagi,
Managing Director and General
Manager of Corporate Planning(Telephone: +81(075)682-1010)

Announcement regarding Acquisition of Intimates Online, Inc. (a U.S. company)
through Our U.S. Subsidiary (i.e., change in subsidiaries following acquisition of shares)
We hereby announce that our board of directors resolved at its meeting held today to enter into ashare purchase agreement pursuant to which we will acquire through our U.S. subsidiary Wacoal
International Corp. (“Wacoal International”) all of the issued and outstanding shares of Intimates Online, Inc.
(“Intimates Online”), a women’s innerwear design and sales company in the U.S.
Details1.

Reason for Share Acquisition

Under the “Medium-Term Management Plan Summary (FY2019–FY2021),” which we announced
in June 2019, our vision is to become “Wacoal of the World as a Group” and we are moving forward withefforts to expand sales and enhance profitability based on the following key strategies: achieve sustainablegrowth and enhance profitability of Wacoal Corp.; revitalize certain domestic subsidiaries; and accelerate
expansion and/or growth of our overseas business.
In our overseas business, the U.S. market is one of the markets in which high growth is expected,
but its market environment is changing dramatically. In recent years, emerging brands called DNVBs (digitalnative vertical brands) are gaining support from millennials against the background of diversifying
preferences among consumers, change in distribution channels (i.e., from physical stores to e-commerce),and rise of new communication tools.
Intimates Online, the target of this share acquisition, is a company that was founded by Ms. MichelleCordeiro Grant in the U.S. in 2015 and mainly designs and sells women’s innerwear products. Intimates
Online owns directly managed retail stores in New York and Chicago, but uses its e-commerce website asits main distribution channel to sell its products under its LIVELY brand in the U.S. It is one of the DNVB
companies that utilize SNS and new digital media to communicate with consumers. Intimates Online’scorporate philosophy is to support independent women and their activities through business activities, andits strength is in its unrivaled marketing methods that utilize its unique ambassador program focused on
forming and supporting a community of consumers who believe in the same corporate philosophy.
With the integration of Intimates Online into our group, we will be able to gain millennial customers,
which is a customer segment different from that of our group’s main customers, and will also capture future
growth through e-commerce sales and digital marketing methods. In addition, Intimates Online will be able
to accelerate its growth by utilizing the design/manufacturing capabilities and business infrastructure of ourgroup. We expect to have synergy effects in a broad range of areas in the future as Intimates Online may
expand its business in the area outside the United States through our group network.
Based on the foregoing, we believe that the acquisition of Intimates Online will make a significant
contribution to enhance the corporate value of our group.

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2.

Method of Share Acquisition

Wacoal International plans to acquire all of the issued and outstanding shares of Intimates Online incash pursuant to the share purchase agreement, the execution of which was resolved at the meeting of boardof directors held today. We plan to procure funds for acquisition from our cash reserves.
3.

Outline of Subsidiary to Acquire Shares(1) Trade Name:

Wacoal International Corp.

(2) Location of Office:

One Wacoal Plaza Lyndhurst, NJ, USA(3) Name and Title of Representative:

Keisuke Kawanishi, Director and President(4) Business Description:

Investments in U.S. affiliate company(5) Capital Amount:

USD 20,000 thousand(6) Date of Incorporation:

June 12, 1981

(7) Major Shareholders and Shareholding Ratio

Wacoal Corp.: 100%4.

Outline of Subsidiary to be Acquired(1) Trade Name:

Intimates Online, Inc.

(2) Location of Office:48 West 38th Street New York, NY, USA(3) Name and Title of Representative:

Michelle Cordeiro Grant(4) Business Description:

Design and sales of women’s innerwear(5) Capital Amount:

USD 433 thousand(6) Date of Incorporation:

May 1, 2015(7) Major Shareholders

NF Ventures LLC;
Michelle Cordeiro Grant;
GGV Discovery I, L.P.; andOther (4 corporate entities and 4 individuals)(8) Relationship between Wacoal Holdings Corp. Capital
Noneand Intimates Online:
Relationship:
Personnel
NoneRelationship:
Business
NoneRelationship:(9) Operating Results and Financial Condition for Past Three Fiscal Years
For each cell, upper figures in thousands of U.S. dollars and lower figures in millions of yen (*1)

Fiscal Year ended
Net Assets

December 2016

December 2017

December 2018

4,462
2,839
7,610
482
307
822
Total Assets
4,559
3,553
8,717
492
384
941
Net Sales
1,518
5,315
11,490
164
574
1,241
Operating Income(892)(1,591)(3,682)
(96)
(172)
(398)
Net Income(987)(1,631)(3,728)
(107)
(176)
(403)
(Note 1) For convenience, conversion into Japanese yen has been made at the exchange rate of 108.00 yen
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to the U.S. dollar. The same shall apply hereinafter.
5.

Number of Shares to be Acquired, Acquisition Price and Status of Shareholding before andafter Acquisition(1) Number of Shares Held by Wacoal
International before Acquisition:0 shares(Number of Voting Rights: 0)(Shareholding Ratio: 0%)(2) Number of Shares to be Acquired:
15,239,111 shares(Number of Voting Rights: 15,239,111)(3) Acquisition Price:
USD 85,000 thousand (approx. 9,180 million yen)(*1)
In addition to this acquisition price, a provision is
expected to be executed providing for contingent
consideration based on performance achievements(“Earn-out Consideration”) to be paid to the current
shareholders of Intimates Online. (*2)(4) Number of Shares Held by Wacoal 15,239,111 sharesInternational after Acquisition:(Number of Voting Rights: 15,239,111)(Shareholding Ratio: 100%)(Note 1) In connection with the determination of the acquisition price for the shares, Wacoal International
has obtained an enterprise valuation report dated February 8, 2019 from its financial advisor,
MMG Advisors, Inc. We have comprehensively considered the valuation results, discussed andnegotiated with the investors of Intimates Online and ultimately determined the acquisition pricefor shares.
(Note 2) The amount of Earn-out Consideration will be within the range of USD 20,000 thousand (approx.
2,160 million yen) and USD 55,000 thousand (approx. 5,940 million yen) and a period for suchEarn-out Consideration will be for four fiscal years, from FY 2019 (fiscal year ending March 31,2020) to FY 2022 (fiscal year ending March 31, 2023). Earn-out Consideration is additional
consideration that will be paid to the current shareholders and will be paid in cash at the end ofeach of the four fiscal years based on Intimates Online’s business results such as net sales. The
introduction of Earn-out Consideration will reduce our risk associated with this acquisition.
6.

Schedule(1) Resolution of the Board Meeting:

July 30, 2019(2) Execution of the Share Purchase Agreement:

July 30, 2019 (scheduled) (U.S. time)(3) Acquisition of Shares (Closing)August 2, 2019 (scheduled) (U.S. time)

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7.

Impact on Consolidated Results

The impact of this share acquisition on the consolidated results of Wacoal Holdings Corp. iscurrently under review and will be announced promptly if any revisions to the consolidated business
forecasts become necessary.
(Reference) Forecast for Current Fiscal Year (as announced on May 15, 2019) and Results for Previous Fiscal
Year
Income Before
Income Taxes
Net Incomeand Equity inAttributable to
Net Income of
WacoalAffiliatedHoldings Corp.
Companies
Millions of Yen
Millions of Yen(U.S. Accounting Standards)

Net Sales

Operating
IncomeForecast for Current Fiscal year
(ending March 31, 2020)

Millions of Yen

Millions of Yen

200,000

11,00012,0009,000

194,201

4,879

2,203

341

Results for Previous Fiscal Year(ended March 31, 2019)

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