May 13, 2024
To whom it may concern:
Company Name: I'rom Group Co., Ltd.
Representative: Toyotaka Mori, President and Representative
Director(Code: 2372 Prime Market of the Tokyo Stock Exchange)
Contact:
Shuichi Kojima, Executive Officer
Responsible for CEO Office Center(Tel: +81 3-3264-3148)
Company Name: BXJB II Holding KK
Representative: Atsuhiko Sakamoto, Representative Director

Notice Regarding Planned Commencement of Tender Offer
For Shares of I'rom Group Co., Ltd. (Code:2372) by BXJB II Holding KK
We hereby inform you that, today, BXJB II Holding KK issued the press release attached hereto, which is titled“Notice Regarding Planned Commencement of Tender Offer For Shares of I'rom Group Co., Ltd. (Code: 2372)”.
END
This material is publicly released, in accordance with Article 30, Paragraph 1, Item 4 of the Enforcement
Order of the Financial Instruments and Exchange Act, pursuant to a request by BXJB II Holding KK (theTender Offeror) for I'rom Group Co., Ltd. (the Target Company of the Tender Offer).
(Attachment)“Notice Regarding Planned Commencement of Tender Offer For Shares of I'rom Group Co., Ltd. (Code: 2372)”
dated May 13, 2024

- 1 -May 13, 2024
To whom it may concern:
Company Name:
Representative:

BXJB II Holding KK
Atsuhiko Sakamoto, Representative Director

Notice Regarding Planned Commencement of Tender Offer
For Shares of I'rom Group Co., Ltd. (Code: 2372)
On May 13, 2024, BJXB II Holding KK (the “Tender Offeror” or “we”) decided to acquire common shares ofI’rom Group Co., Ltd. (the “Target Company Shares”) (Prime Market (the “Tokyo Stock Exchange Prime
Market”) of the Tokyo Stock Exchange, Inc. (the “Tokyo Stock Exchange”), Code: 2372; the “Target
Company”) through a tender offer (the “Tender Offer”) undertaken under the Financial Instruments andExchange Act of Japan (Act No. 25 of 1948, as amended; the “Act”). We therefore make the following
announcement.
With respect to the Tender Offer, based on our consideration to date, it is anticipated that a certain period of time
will be necessary to complete the relevant procedures and take other actions in relation to the obtaining of approvals,
etc. under Australian competition law (the “Clearance”) (Note 1). Therefore, it is intended that the Tender Offer
will be implemented promptly after the completion of the obtaining of the Clearance and the satisfaction (or waiverby the Tender Offeror) of certain other conditions (Note 2) (the “Conditions Precedent”) that are set forth in theTender Offer Agreement (as defined in “(1) Overview of the Tender Offer” of “1. Purpose of the Purchase, etc.”
below; the same applies hereinafter). As of the date hereof, taking into consideration the discussions held with local
legal advisors in relation to these procedures, etc., since it is expected to take a minimum of four (4) weeks fromtoday to obtain the Clearance, the Tender Offeror is aiming to commence the Tender Offer around mid-June in
2024. However, as it is difficult to accurately estimate the amount of time that will be necessary to complete thereview procedures by the Australian authorities responsible for the Clearance process, the Tender Offeror willpromptly make an announcement once the details of the schedule have been fixed. We will also promptly make anannouncement if the expected timing of the commencement of the Tender Offer is changed.
(Note 1)

Blackstone (as defined in “(1) Overview of the Tender Offer” of “1. Purpose of the Purchase, etc.”
below; the same applies hereinafter) may, voluntarily, prior to the acquisition of the Target
Company Shares through the Transaction (as defined in “(1) Overview of the Tender Offer” of “1.
Purpose of the Purchase, etc.” below; the same applies hereinafter) (the “Share Acquisition”),
request the Australian Competition and Consumer Commission to conduct a preliminary prereview of the Share Acquisition. Blackstone has requested a voluntary pre-review of the Share
Acquisition in private form on April 6, 2024 (local time), which request has been accepted as ofthe same date.

(Note 2)

(1) The representations and warranties given by Mr. Mori (as defined in “(1) Overview of theTender Offer” of “1. Purpose of the Purchase, etc.” below; the same applies hereinafter) (Note 3) aretrue and accurate in material respects; (2) Mr. Mori and Mr. Mori’s Asset Management Company(as defined in “(1) Overview of the Tender Offer” of “1. Purpose of the Purchase, etc.” below) have
performed or complied with in material respects the obligations that are required to be performed
or complied with in relation to the Tender Offer by or until the tender offer commencement date
(Note 4) in accordance with the Tender Offer Agreement; (3) upon the implementation of theTender Offer, the board of directors of the Target Company (at a meeting attended by 13 directors;
these 13 directors comprise of all 14 directors of the Target Company, less Mr. Mori, who has aconflicting interest) have resolved to issue an opinion stating that they approve the Tender Offer
and that they recommend to the shareholders of the Target Company to tender their shares in theTender Offer (the “Opinion of Support”), and such opinion has been publicly announced; (4)there has been no material adverse effect on the business, assets, liabilities, financial condition,
operational performance, cash flow or future revenue plan of the Target Company’s Group (asdefined in “ ① Background, purpose and decision-making process of the Tender Offer” of “(2)Background, Purpose and Decision-Making Process of the Tender Offer, and Management Policy
After the Tender Offer” of “1. Purpose of the Purchase, etc.” below; the same applies hereinafter);- 2 -(5) there has been no event that would have allowed the withdrawal of the Tender Offer if theTender Offer had been commenced; (6) there is no pending claim, suit or proceeding that seeks torestrict or prohibit any of the Transaction (as defined in “(1) Overview of the Tender Offer” of “1.
Purpose of the Purchase, etc.” below; the same applies hereinafter), and that there is no any laws
and regulations or order, decision or judgement of any judicial or administrative organization, etc.
that restricts or prohibits any of the Transactions; (7) there is no unpublished material fact (asprescribed in Article 166, Paragraph 2 of the Act) regarding the Target Company’s business, orfact of tender offer, etc. (as prescribed in Article 167, Paragraph 2 of the Act) that has not beenannounced (as prescribed in Article 166, Paragraph 4 or 167, Paragraph 4 of the Act) by the Target
Company; (8) the Tender Offeror has received a commitment letter from each of Mizuho Bank,
Ltd., Mitsubishi UFJ Bank, Ltd., and Sumitomo Mitsui Trust Bank, Limited, which confirms theirrespective undertaking to provide the funds required for the implementation of the Transaction;such commitment letters have not been withdrawn by the commencement date of the Tender Offer;
further, in the case where completion of the Tender Offer is taking place, each of the conditionsprescribed in these commitment letters has been satisfied and it is reasonably anticipated that theprovision of these funds will be implemented; (9) the Tender Offeror has received from Blackstone
Capital Partners Asia II L.P. (“BX Asia Fund”) a certificate of financing confirming its
undertaking to the Tender Offeror that it will, directly or indirectly, invest part of the funds thatwill be used to settle the Tender Offer; such letter of undertaking has not been withdrawn by thecommencement date of the Tender Offer; further, in the case where completion of the Tender Offeris taking place, each of the conditions prescribed in the certificate of financing has been satisfied
and it is reasonably anticipated that the provision of these funds will be implemented; (10) incountries or regions where domestic or foreign competition laws or other regulatory permits orlicenses are required for the Tender Offer, such permits or licenses have been obtained andimplemented, and (if there is a waiting period) the waiting period has expired (including receipt
of notification that a cease and desist order will not be issued) (Note 5); it is reasonably expectedthat no measures or procedures will be taken by judicial or administrative authorities in the relevant
country or region to prevent the execution of the Transaction; (11) the Special Committee (asdefined in “② Background to the decision of the Target Company to support the Tender Offer andreasons therefor” of “(2) Background, Purpose and Decision-Making Process of the Tender Offer, andManagement Policy After the Tender Offer” of “1. Purpose of the Purchase, etc.” below) has made a
recommendation to the board of directors of the Target Company to the effect that it is appropriate
to express its Opinion of Support, and such recommendation has not been withdrawn; and (12) noshareholder proposal has been made by any shareholder of the Target Company regarding the
distribution of dividends out of the Target Company’s retained earnings.
(Note 3)For details of the representations and warranties given by Mr. Mori under the Tender Offer
Agreement, please refer to “(6) Material Agreements Related to the Tender Offer” of “1. Purposeof the Purchase, etc.” below.

(Note 4)For details of Mr. Mori’s obligations under the Tender Offer Agreement, please refer to “(6)Material Agreements Related to the Tender Offer” in “1. Purpose of the Purchase, etc.” below.

(Note 5)In addition to the completion of the obtaining of the Clearance, the following shall also be
included: (1) the expiration of the interim measure period and the acquisition prohibition period
under the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade of Japan(Act No. 54 of 1947, as amended; “Antimonopoly Act”), without receiving from the Fair Trade
Commission any prior notification regarding a cease and desist order, or any request for a report,
etc. under Article 10, Paragraph 9 of the Antimonopoly Act; and (2) the expiration of the waiting
period under the Foreign Exchange and Foreign Trade Act (Act No. 228 of 1949, as amended).

1. Purpose of the Purchase, etc.
(1) Overview of the Tender Offer
The Tender Offeror is a joint-stock company established on April 22, 2024, for the purpose of acquiring the Target
Company Shares through the Tender Offer. The main purpose of the Tender Offeror is to own the Target Company- 3 -Shares and to control and manage the business activities of the Target Company. All of the outstanding shares of theTender Offeror are held by BXJB I Holding KK (the “Tender Offeror’s Parent Company”), all of whose issued
and outstanding shares are indirectly held by funds managed, advised or operated by Blackstone Inc. (including its
affiliates and other affiliated entities, hereinafter referred to as “Blackstone”). As of the date hereof, Blackstone, theTender Offeror’s Parent Company, and the Tender Offeror do not own any Target Company Shares.
Today, the Tender Offeror determined to conduct the Tender Offer as a part of a transaction (the “Transaction”)
which aims to privatize the Target Company Shares by acquiring all of the Target Company Shares listed on theTokyo Stock Exchange Prime Market (excluding treasury shares held by the Target Company), subject to thesatisfaction (or waiver by the Tender Offeror) of the Conditions Precedent. The Transaction corresponds to a so-called
management buyout (MBO) (Note 1), and it is anticipated that Mr. Mori, who is a representative director and president
and also the largest shareholder of the Target Company (as of May 13, 2024) (number of shares held: 4,779,450 shares(ownership ratio (Note 2): 39.48%)), will continue to manage the Target Company after the Transaction is completed.
However, the title of Mr. Mori after the Transaction has not been determined as of the date hereof.
(Note 1)

A “management buyout (MBO)” generally refers to a transaction in which the management of the target
company acquires shares of the target company by investing all or part of the acquisition funds on theassumption that the target company’s business will continue.

(Note 2)“Ownership ratio” means any ownership ratio relative to 12,107,372 shares (the “Total Number of Issued
Shares After Deduction of Treasury Shares”), which are the number of shares calculated by deducting
the number of treasury shares held by the Target Company as of March 31, 2024 (230,993 shares) set forthin the “Summary of Consolidated Financial Results for the Fiscal Year Ended March 31, 2024 (Based onJapanese GAAP)” (the “Target Company’s Financial Results”), as announced by the Target Company
on May 13, 2024, from the total number of issued shares of the Target Company as of March 31, 2024
(12,338,365 shares) set forth in the Target Company’s Financial Results (ownership ratios are rounded totwo decimal places; the same applies hereinafter in the calculation of ownership ratio unless otherwise
stated). However, due to changes after March 31, 2024 and other reasons, the ownership ratio calculated
based on the latest information available at the time of commencement of the Tender Offer may differ
from the above figures; the same applies hereinafter.

The Transaction consists of (i) the Tender Offer, (ii) a transaction in which, after completion of settlement of theTender Offer, APPLeCROSS. Ltd., an asset management company held by Mr. Mori and its relatives (“Mr. Mori’s
Asset Management Company”), will acquire common shares of the Tender Offeror’s Parent Company (the “Tender
Offeror’s Parent Company Shares”) by re-investing in the Tender Offeror’s Parent Company with a portion of theconsideration received by Mr. Mori for tendering the Tendered Agreed Shares (defined below), and (such transactionis hereinafter referred to as “Reinvestment I”), (iii) Squeeze-Out Procedures (defined below), (iv) Share Transfer(defined below) and (v) a transaction in which Mr. Mori’s Asset Management Company will acquire the Tender
Offeror’s Parent Company Shares by re-investing in the Tender Offeror’s Parent Company with assuming thepayment claims against the Tender Offeror that Mr. Mori will acquire through the Share Transfer (such transaction ishereinafter referred to as “Reinvestment II”, and collectively with the Reinvestment I, the “Reinvestment”) (Note3), and finally, it is intended that the number of voting rights pertaining to the Tender Offeror’s Parent Company
Shares held by Mr. Mori’s Asset Management Company and the number of voting rights pertaining to the Tender
Offeror’s Parent Company Shares held by Blackstone shall be in the ratio of 45.0 to 55.0, with the shareholders of
the Target Company being the Tender Offeror only and all the issued shares of the Tender Offeror held by the Tender
Offeror’s Parent Company.
(Note 3)Since Mr. Mori’s continued engagement in the management of the Target Company will contribute to thedevelopment of the entire business of the Target Company’s Group , the Reinvestment shall be
implemented for the purpose of having Mr. Mori involved in the Target Company after the execution of
the Transaction through re-investment in the Tender Offeror’s Parent Company, and it was considered
independently from Mr. Mori’s acceptance of tendering the Tender Offer. In addition, the valuation of theTarget Company Shares (held indirectly by the Tender Offeror’s Parent Company through the Tender
Offeror), which is the premise for determining the amount of payment per share of the common shares of
the Tender Offeror’s Parent Company, is expected to be substantially the same as the tender offer price in
the Tender Offer (the “Tender Offer Price”), and shall not be lower than such amount. Therefore, theterms and conditions, including the amount paid in, for the subscription of the common shares of theTender Offeror’s Parent Company by Mr. Mori’s Asset Management Company are not considered to be- 4 -substantially more favorable than the Tender Offer Price. Thus, we believe that the act of allocating thecommon shares of the Tender Offeror’s Parent Company to Mr. Mori’s Asset Management Company is
not against the purpose of the regulation on uniformity of the tender offer price (Article 27-2, Paragraph 3of the Act).
On May 13, 2024, the Tender Offeror and the Tender Offeror’s Parent Company and BXJB Holdings (CYM) L.P.
(“BX Fund”) (Note 4), have entered into an agreement with Mr. Mori and Mr. Mori’s Asset Management Company
which provides (i) that among the Target Company Shares held by Mr. Mori, 3,124,250 shares (ownership ratio:
25.80%; hereinafter referred to as “Tendered Agreed Shares”) will be tendered in the Tender Offer, and theremaining 1,655,200 shares (ownership ratio: 13.67%; hereinafter referred to as “Non-Tendered Agreed Shares”)
will not be tendered in the Tender Offer due to a security interest therein, (ii) that Mr. Mori will endeavor to have Ms.
Rie Mori (825,000 shares, ownership ratio: 6.81%) and Mr. Ryusuke Mori (75,000 shares, ownership ratio: 0.62%),
who are relatives of Mr. Mori, tender their shares in the Tender Offer, (iii) that the security interest that has been
established on the Non-Tendered Agreed Shares shall be released, and (iv) that the Squeeze-Out Procedures (defined
below), the Reinvestment II, the Share Transfer (defined below), and the Reinvestment I shall be implemented (the“Tender Offer Agreement”). For details of the Tender Offer Agreement, please refer to the section titled “a. The
Tender Offer Agreement” of “(6) Material Agreements Related to the Tender Offer” below.
(Note 4)BXJB Holdings (CYM) L.P. is an exempted limited partnership incorporated under the laws of the
Cayman Islands, all of whose issued shares are indirectly held by funds managed, advised or operated byBlackstone.

In the Tender Offer, the Tender Offeror sets the minimum number of shares to be purchased to 6,416,400 shares (Note5) (ownership ratio 53.00%), and will not purchase all of the shares, etc. tendered in the Tender Offer (the “Tendered
Shares, Etc.”) if the total number of the Tendered Shares, Etc. is less than the minimum number of shares to bepurchased (6,416,400 shares). On the other hand, since the Tender Offer is intended to acquire all of the Target
Company Shares (excluding treasury stocks held by the Target Company and Non-Tendered Agreed Shares), no
maximum limit is set for the number of shares to be purchased. If the total number of Tendered Shares, Etc. is theminimum number of shares to be purchased or more, the Tender Offer will purchase all of the Tendered Shares, Etc.
The minimum number of shares to be purchased (6,416,400 shares) is the number of shares obtained by multiplying
the number of voting rights pertaining to the Total Number of Issued Shares After Deduction of Treasury Shares(121,073 units) by two-thirds (80,716 units; rounded to the nearest whole number) multiplied further by the numberof shares per unit (100 shares) (8,071,600 shares), less the number of Non-Tendered Agreed Shares (1,655,200 shares)(6,416,400 shares). In the event the Tender Offeror is unable to acquire all of the Target Company Shares (excluding
the treasury shares held by the Target Company and Non-Tendered Agreed Shares) in the Tender Offer, after thecompletion of the Tender Offer, the Tender Offeror will request the Target Company to implement a series ofprocedures (the “Squeeze-Out Procedures”) to make the Tender Offeror and Mr. Mori the only shareholders of theTarget Company, as described in “(4) Policy on Organizational Restructuring after the Tender Offer (Mattersconcerning so-called Two-Step Acquisition)”, and when implementing the consolidation of the Target Company
Shares (the “Share Consolidation”) in accordance with Article 180 of the Companies Act as part of the Squeeze-Out
Procedures, a special resolution at a general meeting of shareholders as stipulated in Article 309, Paragraph 2 of theCompanies Act is required. This is the reason for setting the minimum number of shares to be purchased to ensurethat after the Tender Offer, the Tender Offeror and Mr. Mori will hold two-thirds of the voting rights of all shareholdersof the Target Company or more.
(Note 5)The minimum number of shares to be purchased is a provisional number based on the information as oftoday, and the actual minimum number of shares to be purchased in the Tender Offer may differ from theabove figure due to changes in the number of treasury shares held by the Target Company after the said
date and other reasons. The final minimum number of shares to be purchased will be determined prior tothe commencement of the Tender Offer, based on the latest information available as of the commencementof the Tender Offer.

As part of the Transaction, after release of the security interest established on the Non-Tendered Agreed Shares andcompletion of the Squeeze-Out Procedures, the Tender Offeror will obtain approval from the Prime Minister for theTarget Company’s application for suspension of the obligation to file securities reports pursuant to the proviso of
Article 24, Paragraph 1 of the Act, and thereafter Mr. Mori will transfer to the Tender Offeror the Target Company
Shares held by him immediately after completion of the Squeeze-Out Procedures, less any fraction of less than one(1) share as a result of the Share Consolidation (the “Share Transfer”) (Note 6).
- 5 -In addition, the Tender Offeror intends, after the execution of the Transaction, to implement an absorption-type merger(the “Merger”) in which the Target Company is an absorbed company, and the Tender Offeror is a surviving company.
Details such as the specific schedule of the Merger have yet to be determined as of the date hereof.
(Note 6)In the Tender Offer Agreement, it is agreed that the total transfer price of the Target Company Shares tobe acquired by the Tender Offeror from Mr. Mori through the Share Transfer shall be the amount obtainedby multiplying the number of the Non-Tendered Agreed Shares (1,655,200 shares (ownership ratio:
13.67%)) by the Tender Offer Price of 2,800 yen and deducting the fractional value (if any) to be delivered
to Mr. Mori pursuant to Article 235, Paragraph 1 of the Companies Act in connection with theconsolidation of the Target Company Shares which is scheduled to be implemented in the Squeeze-Out
Procedure pursuant to Article 180 of the Companies Act.

The Tender Offeror will pay the funds required for the Transaction including the Tender Offer by contribution received
from the Tender Offeror Parent Company and by borrowing from Mizuho Bank, Ltd., MUFG Bank, Ltd. and
Sumitomo Mitsui Trust Bank, Limited (the “Bank Loan”), by the business day immediately prior to the settlement
date for the Tender Offer, subject to completion of the Tender Offer, etc. Detailed terms and conditions for the Bank
Loan shall be set forth in the loan agreement after negotiation with Mizuho Bank, Ltd., MUFG Bank, Ltd. and
Sumitomo Mitsui Trust Bank, Limited. In addition, in the Bank Loan, the Target Company Shares acquired by theTender Offeror through the Transaction will be pledged as collateral, and certain assets of the Target Company will
be pledged as collateral after completion of the Squeeze-Out Procedures.
According to the “Notice Concerning Implementation of MBO and Recommendation to Tender” (the “Notice byTarget Company”) announced by the Target Company on May 13, 2024, the Target Company resolved at its boardof directors’ meeting on May 13, 2024, in the opinion of the Target Company as of the same date, if the Tender Offeris commenced, to express the opinion in favor of the Tender Offer and recommend its shareholders to apply for theTender Offer. For details on the decision-making process of the Target Company, please refer to the Notice by Target
Company and the section titled “(Measures to Secure the Fairness of the Tender Offer, Such as Measures to Secure
the Fairness of the Price of Tender Offer, etc. and Measures to Avoid Conflicts of Interest)” under “② Backgroundof Calculation” of “(4) Basis of Calculation of the Tender Offer Price, Etc.” in “2. Outline of Tender Offer” below.
The Transaction is illustrated in graphic form as follows.
(a)

Before the Tender Offer (Current Status)

As of the date hereof, Mr. Mori, who is a representative director and president and also the largest shareholder of theTarget Company, holds 4,779,450 shares of the Target Company Shares (ownership ratio: 39.48%), and otherminority shareholders hold other Target Company Shares.

- 6 -

(b)

After the Tender Offer

The Tender Offeror will implement the Tender Offer for all of the Target Company Shares (excluding treasury shares
held by the Target Company and Non-Tendered Agreed Shares), and if the minimum limit of the Tender Offer(6,416,400 shares) is met and the Tender Offer is successful, the Tender Offeror will settle the Tender Offer.
The Tender Offeror plans to receive funding from BX Asia Fund, directly or indirectly, through BX Fund and theTender Offeror’s Parent Company, by way of equity investment or loan to the Tender Offeror up to eighteen (18)billion yen.

(c)

Reinvestment I

After the completion of the settlement of the Tender Offer, Mr. Mori’s Asset Management Company will acquirecommon shares of the Tender Offeror’s Parent Company by re-investing in the Tender Offeror’s Parent Company
with a portion of the consideration received by Mr. Mori for tendering the Tendered Agreed Shares.

- 7 -

(d)

Squeeze-Out Procedures

In the event the Tender Offeror is unable to acquire all of the Target Company Shares (excluding the treasury shares
held by the Target Company and Non-Tendered Agreed Shares) in the Tender Offer, after the completion of the Tender
Offer, the Tender Offeror will request the Target Company to implement the Squeeze-Out Procedures to make theTender Offeror and Mr. Mori the only shareholders of the Target Company.

(e)

Share Transfer

As part of the Transaction, after release of the security interest established on the Non-Tendered Agreed Shares andcompletion of the Squeeze-Out Procedures, the Tender Offeror will obtain approval from the Prime Minister for theTarget Company’s application for suspension of the obligation to file securities reports pursuant to the proviso of
Article 24, Paragraph 1 of the Act, and thereafter Mr. Mori will transfer to the Tender Offeror the Target Company
Shares held by him immediately after completion of the Squeeze-Out Procedures, less any fraction of less than one(1) share as a result of the Share Consolidation.
- 8 -

(f)

Reinvestment II

Mr. Mori’s Asset Management Company will acquire the Tender Offeror’s Parent Company Shares by re-investingin the Tender Offeror’s Parent Company with assuming the payment claims against the Tender Offeror that Mr. Mori
will acquire through the Share Transfer. It is intended that the number of voting rights pertaining to the Tender
Offeror’s Parent Company Shares held by Mr. Mori’s Asset Management Company and the number of voting rights
pertaining to the Tender Offeror’s Parent Company Shares held by Blackstone shall be in the ratio of 45.0 to 55.0
(Note7).
(Note 7)

Although the Shareholders Agreement (defined in “③ Management policy after the Tender Offer”
of “(2) Background, Purpose and Decision-Making Process of the Tender Offer, and Management
Policy After the Tender Offer” below) stipulates that the above voting right ratio shall include thenumber of voting rights held not only by BX Fund but also by funds, etc. that fall under Blackstone, since
only BX Fund and Mr. Mori’s Asset Management Company are scheduled to become shareholders of theTender Offeror’s Parent Company immediately after the Reinvestment II, only BX Fund is shown in thescheme diagram below.

- 9 -(2) Background, Purpose and Decision-Making Process of the Tender Offer, and Management Policy After the Tender
Offer
The background, purpose and decision-making process that led the Tender Offeror to decide to conduct the Tender
Offer are as follows. The following descriptions pertaining to the Target Company are based on information
published by the Target Company, the Notice by Target Company, and explanations received from the Target
Company.
①

Background, purpose and decision-making process of the Tender Offer

Blackstone was founded in 1985 and is the world’s largest alternative investment management company.
Blackstone manages assets with total equity of approximately 147 trillion yen as of December 31, 2023 (Note:
1 U.S. Dollar = 141.04 yen; the same applies hereinafter). Blackstone’s investment management businessincludes private equity funds, real estate funds, hedge fund solutions, credit-related investments, and closedend mutual funds. The private equity fund, which is the investor in the Transaction, manages approximately
twenty (20) trillion yen globally at 126 portfolio companies. In addition, the Blackstone’s private equity
team has offices worldwide, including six (6) Asian bases in Tokyo, Singapore, Mumbai, Shanghai, Sydney,
and Seoul. These offices are not divided into regional funds (North America, Europe, Asia, Japan, etc.), andacting as a single team enables Blackstone to collaborate closely and globally. Blackstone has identified
healthcare as one of its most focused areas and has built a track record in these areas with leveraging its global
scale and network. In Japan, since the opening of our Tokyo office in 2007, Blackstone have invested morethan 2 trillion yen in business investment and real estate investment through April 12, 2024. Investment incompanies in the healthcare field is a focus theme for the Japanese team, as evidenced by the capital
participation to AYUMI Pharmaceutical Corporation (“AYUMI Pharmaceutical”) in March 2019 and theacquisition of Takeda Consumer Healthcare Company Limited (currently Alinamin Pharmaceutical Co., Ltd.;
hereinafter “Alinamin”) in March 2021. It is also characterized by a number of large-scale and listedcompanies going private, including the acquisition of Japan Residential Investment Company, a Londonlisted company that invests in lease condominiums; the acquisition of the Japanese real estate portfolio of
Astro Japan Property Group, an Australian listed company; and the acquisition of Croesus Retail Trust, aSingapore-listed company that invests in commercial facilities in Japan. In addition to the aforementioned
examples of investments in AYUMI Pharmaceuticals and Alinamin, Blackstone is actively involved inbuilding partnerships with domestic operating companies, such as commencement of collaboration with
Daiwa House Industry Co., Ltd. in the logistics field and acquisition of logistics facilities in July 2020,
acquisition of Isetan Mitsukoshi Real Estate Co., Ltd. in November 2020, acquisition of the hotel portfolio(eight properties) owned by Kintetsu Group Holdings Co., Ltd. in October 2021, and acquisition of Sony
Payment Services Inc. with Sony Bank Inc. in January 2024.
The Target Company was founded in April 1997 as I’rom Co., Ltd. in Kanda Surugadai, Chiyoda-ku, Tokyo
for the purpose of supporting clinical trial sites (the “SMO Business,” as detailed in A) below). In October
2006, the SMO Business, one of the main businesses of the Target Company, was transferred to I’rom Co.,
Ltd., a consolidated subsidiary newly established by the Target Company through an incorporation-typecompany split, thereby realizing the transition to a holding company structure, and at the same time the Target
Company changed its name to “I’rom Holdings Co., Ltd.” Subsequently, in July 2015, the Target Company
changed its name to “I’rom Group Co., Ltd.” in order to clarify that it will be responsible for promoting groupbusinesses and managing each of the group companies.
The Target Company Shares were listed on the Jasdaq Securities Exchange, Inc. in October 2003, and listedon the First Section of the Tokyo Stock Exchange in January 2005. The Target Company Shares are now listedon the Tokyo Stock Exchange Prime Market following the re-characterization of the market classification of
the Tokyo Stock Exchange implemented in April 2022.
As of the date hereof, the Target Company’s group consisted of the Target Company, 22 consolidated
subsidiaries, and one affiliated company (the “Target Company’s Group”). The Target Company’s Group
has set “For a future full of joy” as the brand promise, and in order to realize a better medical environment,
as a comprehensive medical support company in the medical-related field, the Target Company’s Group aims
to realize a sustainable society by ensuring that all people remain healthy. The Target Company’s Group also
- 10-

pursues improving the sustainability of its business by leveraging the comprehensive strengths generated bysynergies among group companies and businesses and is working to further contribute the development of
medical care, thereby improving the health and quality of life of people. Through these efforts, the Target
Company’s Group is developing a variety of businesses described in “A) SMO Business” through “E) Drug
Discovery Business” below.
The business activities of each of the main segments of the Target Company’s Group are as follows.
A) SMO Business“SMO” is an abbreviation of Site Management Organization and refers to an organization that undertakes apart of the operation related to the implementation of a clinical trial (Note 1) from a medical institution andprovides on-behalf support. CRC (Note 2) provides support to physicians, medical staff, and patients in orderto facilitate the progress of clinical trials at the medical institutions that conduct clinical trials. In collaboration
with CRO (Note 3) business, the Target Company is involved in the planning of clinical trials forpharmaceuticals, from the selection stage of medical institutions and doctors who are responsible for trials,
and has been comprehensively entrusted with support services for the implementation of clinical trials from
Phase I to Phase IV (Note 4). Since ethical, scientific, and reliable clinical trials are required, they are
conducted in accordance with strict standards such as GCP (Good Clinical Practice: Ministerial Ordinance onStandards for Conducting Clinical Trials on Pharmaceuticals), trial implementation protocol (Protocol) (Note5) and SOP (Standard Operating Procedure).
(Note 1)“Clinical trials” are trials conducted in the course of drug development in order to assess theefficacy and safety of drugs in humans.

(Note 2)“CRC” is an abbreviation of Clinical Research Coordinator and refers to staff members who
support the proper and smooth conduct of clinical trials at clinical trial institutions.

(Note 3)“CRO” is an abbreviation of Contract Research Organization and refers to an organization that
undertakes part or all of the operation related to the implementation of clinical trials and postmarketing clinical trials, etc. at the development stage of pharmaceuticals and medical devices
from pharmaceutical companies, etc., and provides on-behalf support.

(Note 4)This is a type of objective-specific trial to be conducted in the clinical development ofpharmaceuticals. It is divided into the following phases: trials to confirm safety andpharmacokinetics in the body (Phase I); exploratory trials with the primary objective of exploring
therapeutic effects in patients (Phase II); confirmatory trials with the primary objective of
demonstrating or confirming therapeutic benefits (Phase III); and trials to collect further
information on efficacy and safety through therapeutic use after pharmaceutical approval (Phase
IV).

(Note 5)“Trial implementation protocol” is a document that describes the requirements (e.g., objectives,
design, methods and statistical considerations of the trials) that sponsors of clinical trials such as
clinical trial institutions and pharmaceutical companies must comply with in order to conductclinical trials.

B) CRO Business
The Target Company’s Group is conducting early clinical trials at clinical trial institutions in Japan andAustralia to support global development of domestic and overseas pharmaceutical companies. Furthermore,in addition to supporting company-initiated clinical trials in Japan, the company also provides support forphysician-initiated clinical trials and clinical studies of regenerative medicine and refractory diseases, mainly
for academia such as universities and research institutes.
C) Advanced Medical Business
The Target Company’s Group is engaged in research and development and commercialization in the field of
regenerative medicine based on the development of vaccines and gene therapy products and technology- 11-related to iPS cells (Note 6) using high-performance and safe vector technology (Note 7). The Target
Company’s Group is also engaged in contract manufacturing of clinical vectors, gene therapy products,
regenerative medicine products, etc. as a contract pharmaceutical manufacturing facility. In addition, theTarget Company’s Group is also providing services related to the development, manufacture and sales andcontract manufacturing of cosmetics and other products by using advanced medical technology.
(Note 6)

“iPS cells” is an abbreviation for induced Pluripotent Stem cell and is generally interpreted as“artificial pluripotent stem cells.” These cells are established by introducing specific genes into
somatic cells and are capable of differentiating into any tissue or cell of an animal such as a human.

(Note 7)

“Vector” refers to a substance that acts to effectively introduce genes into target cells and “vector
technology” refers to technology for generating vectors.

D) Medical Support Business
The Target Company’s Group is mainly engaged in establishment and leasing of clinic malls (Note 8), medical
consulting and other services related thereto, the overall and comprehensive support of medical management,
and EC business (Electronic Commerce or E-Commerce) that sells over-the-counter drugs, quasi-drugs, etc.
(Note 8)“Clinic mall” refers to a complex medical facility with a collection of clinics with different clinicalsubjects on the same floor.

E) Drug Discovery Business
The Target Company’s Group is co-developing important biosimilars (Note 9) and other pharmaceuticals withhigh efficacy based on license agreements with domestic and foreign pharmaceutical companies and otherparties.
(Note 9)“Biosimilars” refer to pharmaceuticals that are developed by different manufacturers anddistributors as pharmaceuticals that have the same quality, safety, and efficacy as biologics thathave already been approved in Japan as pharmaceuticals with new active ingredients.

The business environment surrounding the Target Company’s Group is changing every day, and the needs forclinical trials are diversifying due to the increase in and the globalization of the development of newtechnologies such as regenerative medicine, the shortening of development periods, and changes indevelopment methods. The issues such as “drug lag (Note 10)” and “drug loss (Note 11)” are also becoming
more apparent, and there is a need to resolve issues in the pharmaceutical development environment in Japanand to respond promptly and appropriately to drastic changes in the environment. Specifically, thedevelopment of pharmaceuticals is increasing in the field of diseases such as cancer and refractory diseases,
and the development of pharmaceuticals such as gene therapy and regenerative medicine is proceeding as atreatment for such diseases. In addition, in the drug development for refractory diseases and regenerative
medicine, clinical trials for patients tend to be conducted from an early stage, and therefore, higher quality
and multifaceted roles are required at the facilities where early clinical trials are conducted. Drug discovery
technologies in drug development are diversifying from low-molecular-weight drugs to biopharmaceuticals,
gene therapy, regenerative medicine, etc., and the market for biopharmaceuticals is expanding, gene therapy
formulations are being developed, and iPS cells are being used in clinical trials.
(Note 10) “Drug lag” refers to the delayed development or approval in Japan of a therapeutic drug that canbe used in Western countries.
(Note 11) “Drug loss” refers to a situation in which a therapeutic drug that can be used in Western countries
cannot be developed or approved in Japan.
In this business environment, the Target Company’s Group is promoting the expansion of the SMO Businessand the CRO Business, which are its core businesses since its foundation. In addition, as a group strategy,
funds generated by the SMO Business and the CRO Business are used to develop pharmaceuticals in theadvanced medical business and advanced medical technologies, and to invest in capex using the expertise of
the medical support business. By doing so, the Target Company’s Group is strengthening the business- 12-foundation of each business, improving the quality of products and services that can respond to the demandsof the diversified and sophisticated market, and strengthening research and development capabilities.
Specifically, in the SMO Business, the Target Company’s Group has expanded its alliances with core hospitals,
such as specialized medical centers and university hospitals, and has established a system that enables
commissioning testing in all disease fields. In addition, the Target Company’s Group is promoting thecommission of testing in the primary field, such as lifestyle-related diseases, which is larger in size per trial
than in the cancer and refractory diseases trials. In the CRO Business, in addition to providing early-stage
support for pharmaceutical companies in the Asia-Oceania region, including Europe, the United States, andJapan, at clinical trial institutions owned in both Japan and Australia, the Target Company’s Group is
continuously working to expand commissioning operations and strengthen the field of statistical analysis. By
commissioning several new trials, including physician-led clinical trials, the Target Company’s Group is also
working to strengthen its business foundation. In the advanced medical business, the Target Company’s Groupis promoting research and development of vaccines and biosimilars using funds generated by the SMO
Business and the CRO Business based on the group strategy described above. In addition, the licensing
business of an iPS Cell Production Kit “CytoTune-iPS” (Note 12) is expanding. The Target Company’s Grouphas executed new licensing agreements with several companies, and has been working to create new business
opportunities using the Sendai Virus Vector (Note 13) as its core technology through the licensing businessby, for example, exercising the right to sub-license the technology based on the executed licensing agreements.
(Note 12) “iPS Cell Production Kit ‘CytoTune-iPS’” are iPS cell induction kits developed by fusing thefactors involved in the production of iPS cells developed by Professor Shinya Yamanaka of Kyoto
University and the Sendai Virus Vector technologies of the Target Group’s Company.
(Note 13) “Sendai Virus Vector” is a vector developed independently by the Target Company. With RNA as
the backbone, the Target Company’s Group has proven that it is highly safe through clinical studies
and animal experiments. In addition, the Target Company’s Group has proven that it is highly
reliable and proven results for use in gene-based therapeutic products and in the field of
regenerative medicine.
Mr. Mori believes that in the aforementioned drastic changes in the industry environment, the pharmaceuticaland medical device development industries surrounding the Target Company’s Group are becoming moreglobalized and the development period is becoming shorter, and the need for clinical trials continues todiversify due to changes in the development methods. The demand for the SMO Business at medical
institutions is expanding, and securing human resources is becoming an issue in the SMO Business. In
addition, it is expected that the number of trials with high difficulty in the rare diseases and cancer fields will
increase, and he anticipates that human resource training will continue to be a key issue in the future. In the
CRO Business, he understands that the Target Company’s Group is in a phase which requires it to restructurefrom the traditional business category on the back of a similar trend.
In addition to this situation, pharmaceutical development led by the United States is becoming the mainstream
and major global pharmaceutical companies are becoming increasingly involved in Japan as a place forpharmaceutical development. In this environment, Mr. Mori has believed that it is important to build acompetitive global system and win projects in order to further increase the corporate value of the Target
Company’s Group. Specifically, Mr. Mori believes that the corporate value of the Target Company’s Groupwill be increased by promoting a hybrid type of comprehensive clinical development support in the CRO
Business, which is based on the SMO Business and provides services domestically and internationally byutilizing the know-how cultivated in the SMO Business, by achieving growth through the expansion of its
global business base through the acquisition of CRO Businesses in Japan and overseas and by evolving intoa healthcare platform overseas, especially in Asia.
Based on this thinking, at around early September 2021, Mr. Mori began searching for a method to improvethe corporate value of the Target Company’s Group not only on its own, but also through alliances withstrategic partners in order to further accelerate the business transformation that the Target Company’s Grouphas implemented and considered, and to enable long term and sustainable business restructuring.
While Mr. Mori is considering various strategic options, including how to utilize outside management
resources, including alliances with strategic partners, Blackstone has been investigating and considering
investment destinations in Japan for some time. Blackstone, via Daiwa Securities Co. Ltd. (“Daiwa- 13-

Securities”), held an interview with Mr. Mori in late January 2022 to exchange opinions on a wide range ofmanagement measures for the Target Company’s Group. During this interview, Blackstone provided an
overview of Blackstone’s general management support to invested companies, explained Blackstone’s
investment performance in the medical and pharmaceutical industries globally and in Japan, and exchanged
views with Mr. Mori on the initial direction of management strategy of the Target Company’s Group.
Subsequently, Mr. Mori recognized that Blackstone had deep knowledge of businesses of the Target
Company’s Group, and determined that it would be useful to continue to exchange opinions with Blackstone.
Accordingly, Mr. Mori and Blackstone decided to continue discussions on the direction of the policy measures
the Target Company’s Group and on various capital policies, including privatization. From late January 2022
to late February 2024, Mr. Mori and Blackstone conducted multiple exchanges of opinions on the businessenvironment of the medical and pharmaceutical industries to which the Target Company’s Group belongs, thedirection of management measures based on the relevant environment, and the content and optimal capital
structure as management support for the Target Company’s Group expected by Blackstone.
Through the discussions, Mr. Mori has had a common view with Blackstone that further external support isimportant to diversify the business while continuing to grow the existing businesses of the Target Company’sGroup, and highly appreciated Blackstone, which has a network throughout the world, and has a track recordof diverse investments in the medical and pharmaceutical businesses both domestically and overseas. He
believes that utilizing Blackstone’s global knowledge, experience and network in other industries will enable
the Target Company’s Group to acquire and cultivate high-quality human resources, and will also build acompetitive global management system that can compete with competitors and major global companies,
enabling the Target Company’s Group to evolve into a global healthcare platform. In addition, he felt a highlevel of commitment from Blackstone members. Therefore, in late February 2024, Mr. Mori decided that
Blackstone was the trustworthy and appropriate partner of the Target Company’s Group.
In parallel with the discussions with Blackstone, Mr. Mori met several times with other private equity funds
via Daiwa Securities from late January 2022 to early August 2022, and received proposals regarding thedirection of the management policy of the Target Company’s Group and its capital policy, including
privatization. However, taking into consideration the content of the proposal, their understanding of thebusinesses of the Target Company’s Group, and their investment track record to date, he determined that
Blackstone, which has defined healthcare fields as one of the most focused areas and has one of the world’s
largest life science funds (“BXLS”) that provides funds for the research and development stage in thepharmaceuticals as well as investing in companies, was more appropriate as a partner that supports the Target
Company’s Group’s future business to grow.
On the other hand, Blackstone highly evaluated the history of the Target Company’s Group supporting
medical institutions for more than twenty (20) years in clinical trials, which form the foundation of the medical
and pharmaceutical industries since the dawn of the SMO industry, its top-level business foundation in Japan,
its industry-leading technology development capabilities, and its corporate culture that continues to focus onproviding value to doctors and nurses at the forefront of the medical field. Blackstone believes that in orderfor the Target Company’s Group to achieve further growth and increase its corporate value over the medium
to long term, it is necessary to implement various measures, including expansion of overseas business anddiscontinuous growth through M&A. In order to promptly implement a series of measures, it is beneficial toutilize human resources and management know-how from outside the company, instead of limiting the use ofinternal management resources. Against this backdrop, Blackstone determined that by going private andmaking Blackstone a partner, and utilizing Blackstone’s knowledge and network to promote management
reform, the Target Company’s Group can, for example, further expand the SMO Business through optimal
resource allocation and advanced sales strategies, and expand the CRO contracting opportunities by utilizing
Blackstone’s network, achieve new growth that the Target Company’s Group could not achieve on its own,
and evolve into a healthcare service platform with a larger scale of business. Blackstone believes that it isspecifically capable of providing the following value:(a) Support for the Continued Growth of Target Company’s Group
Blackstone recognizes that in the industry to which the Target Company’s Group belongs, the number of trials
with high difficulty such as cancer and rare diseases is increasing, clinical trials are becoming more
complicated, small-scale trials with fewer cases are becoming increasingly difficult, and patient recruitment- 14-

is becoming increasingly difficult. Accordingly, the number of multinational clinical trials that efficiently
recruit patients is increasing, and the diversity of quantity and quality of human resources required isadvancing. As the number of multinational clinical trials is expected to increase in the future, Blackstone
believes it is important to acquire projects efficiently. Blackstone will utilize its deep knowledge in thehealthcare field and its domestic and overseas networks, promote the construction of a globally competitive
sales system for the SMO Business and CRO Business of the Target Company’s Group, and provide support
for achieving long term and sustainable growth.
Specifically, Blackstone has BXLS under the umbrella through which Blackstone provides development
funding for late-stage clinical trials (Phase II and Phase III) before their launch, and has an extensive
experience and network. However, in the cancer field, clinical trials are mainly multinational clinical trials,
and in order to efficiently acquire projects, Blackstone plans to introduce a wide range of investment projects
by BXLS, including cancer and rare diseases, to Target Company’s Group, to develop customers using BXLS
human resources and networks, and to consider business alliances with Blackstone’s portfolio companies.
(b) Exploring Discontinuous Growth Opportunities through M&A
Through discussions with Mr. Mori, Blackstone recognizes that with the increasing ratio of international
clinical trials and the increasing involvement of major global CROs in Japan, discontinuous growth throughM&A in Japan and overseas is necessary for the Target Company’s Group to achieve future medium to longterm growth and increase corporate value. Blackstone intends to provide one-stop M&A support, fromsearching for acquisition opportunities to assisting in the execution of acquisitions, not only in Japan but also
overseas, utilizing Blackstone’s global M&A experience and network to enable the Target Company’s Groupto compete with major global CROs.
(c) Initiatives to Strengthen Organizational Capabilities
In order to realize (a) and (b) above, Blackstone will promote initiatives to strengthen the organizational
capabilities of the Target Company’s Group. Specifically, Blackstone intends to use data analytics (Note 14)
to reduce the turnover rate by implementing measures to prevent employees from leaving work, such as
relocation, for employees who are judged to be at increased risk of leaving work by AI. In addition, by
utilizing Blackstone’s network to invite outside management personnel and promote the use of outsideadvisors, Blackstone intends to expand the Target Company’s expertise and business experience in its
business areas and potential customer network, thereby leading to further growth. Furthermore, from theperspective of supporting the growth of the Target Company’s Group and encouraging them to increase theirmotivation to participate in management, Blackstone is considering establishing an incentive plancommensurate with the growth of performance and corporate value. As of the date hereof, the specific content
of the incentive plan has not been determined.
Through the above measures, Blackstone intends to further strengthen the organizational capabilities of theTarget Company’s Group.
(Note 14) “Data analytics” refers to a process that uses methods and tools such as statistical, machinelearning, and predictive modeling to investigate, return, analyze data, identify trends and patterns,
identify important insights, and enhance decision-making.
In late February 2024, Blackstone appointed Daiwa Securities as a financial advisor independent ofBlackstone, the Tender Offeror, the Tender Offeror’s Parent Company, Mr. Mori and the Target Company(“Tender Offer-Related Parties”), and Nagashima Ohno & Tsunematsu as a legal advisor independent of
the Tender Offer-Related Parties. On February 27, 2024, Blackstone expressed to the Target Company its
initial intention to become a tender offeror and privatize the Target Company Shares through a tender offer,and submitted a proposal (the “Initial Proposal”) to request cooperation in conducting due diligence in orderto receive the necessary information for a formal proposal to be made in the future. On the same day,Blackstone received a communication from the Target Company stating that it would consider the content of
the proposal and that it would cooperate in the due diligence, after establishing the necessary framework. In
the Initial Proposal, Blackstone also mentioned that it is considering the possibility of a so-called managementbuyout (MBO) in which Mr. Mori would be the tender offeror in addition to Blackstone.
- 15-

Subsequently, Blackstone began due diligence on the Target Company in early March 2024, comprehensively
analyzing and examining the Target Company’s business and financial condition, and held discussions not
only with Mr. Mori but also with the Target Company toward the realization of the Tender Offer.
In the course of discussions between Blackstone and Mr. Mori regarding the direction of the management
measures and various capital policies of the Target Company’s Group, including privatization, Blackstone
highly appreciated Mr. Mori’s management abilities and experience, and Blackstone believes that Mr. Mori
is the best person to manage the Target Company’s Group, and Blackstone and Mr. Mori have come to acommon understanding that a management buyout (MBO), in which Mr. Mori would continue to lead the
management of the Target Company’s Group as a shareholder as well as a member of the management team,with the support of Blackstone’s deep knowledge, track record, and extensive network in the healthcare field,
would be the most effective means to ensure the stable continuation of the business of the Target Company’sGroup and to enhance the Target Company’s Group’s medium to long term sustainable growth and corporate
value. Therefore, on March 25, 2024, Mr. Mori and Blackstone submitted a letter of intent (“Letter of Intent”)
to the Target Company, stating that an acquisition company in which Mr. Mori and Blackstone will invest will
be a tender offeror and privatize the Target Company Shares through a tender offer, and on the same day,received a notice from the Target Company that they would consider the proposal.
Subsequently, Blackstone conducted due diligence on the Target Company until mid-April 2024, anddiscussed with Mr. Mori, taking into account the results of the due diligence. On April 17, 2024, Mr. Mori
and Blackstone made a proposal to the Target Company that the Tender Offer Price shall be 2,400 yen per
share. This Tender Offer Price is a premium of 33.19% (rounded to two decimal places; the same applies
hereinafter in the calculation of premiums) on 1,802 yen , which is the closing price of the Target Company
Shares on the Tokyo Stock Exchange Prime Market on April 16, 2024, a premium of 28.96% on 1,861 yen(rounded to the nearest whole number; the same applies hereinafter in the calculation of the simple averageof the closing price), which is the simple average of the closing price of the Target Company Shares for the
past one (1) month up to April 16, 2024, a premium of 26.58% on 1,896 yen, which is the simple average ofthe closing price of the Target Company Shares for the past three (3) months up to April 16, 2024, and a
premium of 26.18% on 1,902 yen, which is the simple average of the closing price of the Target Company
Shares for the past six (6) months up to April 16, 2024. Subsequently, on April 19, 2024, Blackstone received
a written response from the Target Company requesting an increase in the Tender Offer Price on the grounds
that the proposed Tender Offer Price of 2,400 yen was insufficient in relation to the intrinsic value of theTarget Company as considered based on its business and financial information, and that the Tender Offer Pricewas below the premium level in similar cases, as well as requesting that the consideration for setting amajority-of-minority condition. In response to such request from the Target Company, on May 1, 2024, Mr.
Mori and Blackstone made a proposal to the Target Company to set the Tender Offer Price at 2,700 yen per
share. This Tender Offer Price is a premium of 49.01% on 1,812 yen, which is the closing price of the Target
Company Shares on the Tokyo Stock Exchange Prime Market on April 30, 2024, a premium of 48.84% on
1,814 yen, which is the simple average of the closing price of the Target Company Shares for the past one (1)month up to April 30, 2024, a premium of 45.32% on 1,858 yen, which is the simple average of the closing
price of the Target Company Shares for the past three (3) months up to April 30, 2024, and a premium of
41.21% on 1,912 yen, which is the simple average of the closing price of the Target Company Shares for the
past six (6) months up to April 30, 2024. In addition, Blackstone responded that they do not plan to set theminimum number of shares to be purchased in the Tender Offer to the number of shares subject to themajority-of-minority condition, and that it is assumed that dividends (including the year-end dividend for the
fiscal year ending March 31, 2024) with a record date before the settlement commencement date of the Tender
Offer will not be implemented, based on the grounds that the majority-of-minority condition may make theconsummation of the Tender Offer unstable and may not be in the interests of the minority shareholders of
the Target Company who wish to tender their shares in the Tender Offer, and that they believe that sufficientconsideration has been given to the interests of minority shareholders through the implementation of sufficient
other measures to ensure fairness, including the establishment of a special committee and the establishmentof a tender offer period of at least thirty (30) business days, which is longer than the twenty (20) businessdays required by law. Subsequently, on May 2, 2024, Blackstone received a written response from the Target
Company requesting that they consider raising the Tender Offer Price in further consideration of the intrinsic
value that the Target Company’s public shareholders are expected to enjoy through long-term ownership of
the Target Company Shares and the achievement of its business plan, on the grounds that the proposed Tender
Offer Price of 2,700 yen cannot be evaluated as sufficient for the Target Company’s minority shareholders incomparison with the results of the calculation by KPMG FAS Co., Ltd. (“KPMG”; for the process of selection,- 16-

please refer to “② Background to the decision of the Target Company to support the Tender Offer and reasons
therefor” below), that it is assumed that no dividend (including the year-end dividend for the fiscal year ending
March 31, 2024) will be implemented, and that the majority-of-minority condition will not be set. In response
to such request from the Target Company, on May 7, 2024, Mr. Mori and Blackstone proposed to the Target
Company that the Tender Offer Price shall be 2,800 yen. This Tender Offer Price is a premium of 54.44% on
1,813 yen, which is the closing price of the Target Company Shares on the Tokyo Stock Exchange Prime
Market on May 2, 2024, a premium of 54.61% on 1,811 yen, which is the simple average of the closing priceof the Target Company Shares for the past one (1) month up to May 2, 2024, a premium of 51.52% on 1,848
yen, which is the simple average of the closing price of the Target Company Shares for the past three (3)months up to May 2, 2024, and a premium of 46.21% on 1,915 yen, which is the simple average of the closing
price of the Target Company Shares for the past six (6) months up to May 2, 2024. In addition, Blackstone
responded to the Target Company that the proposed Tender Offer Price of 2,800 yen takes into account therealization of the Target Company’s growth beyond its stand-alone operations, that it offers a fair sale priceto the Target Company’s shareholders, even taking into account the previously scheduled year-end dividend,
and that it is difficult to raise the Tender Offer Price further as a result of the final review. Subsequently, on
May 9, 2024, Blackstone received a response from the Target Company that while the Target Company
recognized that the intrinsic value of the Target Company was evaluated to a certain extent in the proposed
Tender Offer Price of 2,800 yen and that the price was a market level compared to similar transactions interms of the premium level to the current market share price of the Target Company, it was concerned that the
intrinsic value of the Target Company might not be evaluated to the maximum extent. Therefore, the Target
Company explained its recognition of the Target Company’s intrinsic value and requested an explanation of
Mr. Mori’s and Blackstone’s recognition of the Target Company’s intrinsic value, as well as requesting
proposals on any other matters that have not yet been proposed. In response to such request from the Target
Company, on May 10, 2024, Mr. Mori and Blackstone explained to the Target Company their thoughts on
how they see each segment of the Target Company’s business plan, and stated that it would be difficult toraise the proposed price further and that although the Tender Offer requires the completion of obtaining theClearance, as it is expected to take a certain period of time to complete the procedures and responses related
to the Clearance, they plan to conduct the Tender Offer promptly after the completion of obtaining theClearance.
Subsequently, on May 10, 2024, Blackstone received a written response from the Target Company, statingthat in the opinion of the Target Company as of the time of such response, the Tender Offer Price of 2,800
yen was acceptable, subject to the final decision being made through a resolution of the Target Company’sboard of directors after considering the report of the Special Committee.
After the above discussion and negotiation, on May 13, 2024, the Tender Offeror decided to conduct theTender Offer with the Tender Offer Price of 2,800 yen as part of the Transaction, subject to the fulfillment (orwaiver by the Offeror) of the Conditions Precedent, including the completion of obtaining the Clearance.
②

Background to the decision of the Target Company to support the Tender Offer and reasons therefor

According to the Notice by the Target Company, as described in “① Background, purpose and decisionmaking process of the Tender Offer” above, on February 27, 2024, the Target Company received a request for
discussion and negotiation with respect to the Transaction from Blackstone and the Initial Proposal. The
Target Company responded on the same day that it would be open to discussion and negotiation for theTransaction. As described in the section titled “(Measures to Secure the Fairness of the Tender Offer, Such as
Measures to Secure the Fairness of the Price of Tender Offer, etc. and Measures to Avoid Conflicts of Interest)”
under “② Background of Calculation” of “(4) Basis of Calculation of the Tender Offer Price, Etc.” in “2.
Outline of Tender Offer” below, given that the Tender Offer is part of the Transaction for a managementbuyout (MBO) and there exists structural conflicts of interest, on March 11, 2024, the Target Company
appointed City-Yuwa Partners as a legal advisor independent of the Tender Offer-Related Parties and KPMG
as a financial advisor and a third-party valuation institution independent of the Tender Offer-Related Parties
in order to ensure the fairness of the Transaction.
In addition, given the existence of a structural conflicts of interest between Mr. Mori and the Target Company
or general shareholders of the Target Company, on March 11, 2024, the Target Company established a special
committee (the “Special Committee”) to review the proposal for the Transaction as described in the Initial- 17-

Proposal from the perspective of ensuring the fairness throughout the process in which the merits of theTransaction and the appropriateness of its terms are reviewed and judged. For the composition of the membersof the Special Committee, the powers granted to it, and its specific activities, please refer to the section titled“③ The Target Company’s Establishment of an Independent Special Committee and Procurement of a Reportfrom such Special Committee” in “(Measures to Secure the Fairness of the Tender Offer, Such as Measures
to Secure the Fairness of the Price of Tender Offer, etc. and Measures to Avoid Conflicts of Interest)” under“② Background of Calculation” of “(4) Basis of Calculation of the Tender Offer Price, Etc.” in “2. Outlineof Tender Offer” below.
Under the aforementioned system, taking into account the outline of the Tender Offer including the purposeof the Transaction as set forth in the Initial Proposal, the impact of the Transaction on the Target Company,
the details of the management policy after the Transaction and the current share price trend, as well as
consulting and reviewing the negotiation policy with the Special Committee in advance, the Target Company
has considered the appropriateness of the Transaction after multiple rounds of discussions with Mr. Mori andBlackstone, with receiving opinions, instructions, requests, etc. by the Special Committee at important stagesof negotiations, such as receiving opinions and instructions regarding the specific proposed amount andreasons for the proposal when receiving a proposal from the Tender Offeror regarding the terms of theTransaction, as well as receiving advice from City-Yuwa Partners and KPMG.
Specifically, after receiving a proposal from Mr. Mori and Blackstone on April 17, 2024, to the effect that theTender Offer Price shall be 2,400 yen per share, on April 19, 2024, based on the opinions of the Special
Committee, as well as the advice of City-Yuwa Partners and KPMG, the Target Company requested to Mr.
Mori and Blackstone the increase in the Tender Offer Price as well as the majority-of-minority condition on
the grounds that the proposed Tender Offer Price of 2,400 yen was insufficient in relation to the intrinsic valueof the Target Company as considered based on its business and financial information, and that the Tender
Offer Price was below the premium level in other recent MBO cases. Subsequently, on May 1, 2024, Mr.
Mori and Blackstone made a proposal to the Target Company to set the Tender Offer Price at 2,700 yen per
share. In addition, Blackstone responded that it does not plan to set the minimum number of shares to bepurchased in the Tender Offer to the number of shares subject to the majority-of-minority condition, and that
it is assumed that dividends (including the year-end dividend for the fiscal year ending March 31, 2024) witha record date before the settlement commencement date of the Tender Offer will not be implemented, basedon the grounds that the majority-of-minority condition may make the consummation of the Tender Offer
unstable and may not be in the interests of the minority shareholders of the Target Company who wish totender their shares in the Tender Offer, and that they believe that sufficient consideration has been given to
the interests of minority shareholders through the implementation of sufficient other measures to ensure
fairness, including the establishment of a special committee and the establishment of a tender offer period ofat least thirty (30) business days, which is longer than the twenty (20) business days required by law. On May
2, 2024, based on the content of the report received from KPMG on the results of the trial calculation
concerning the value of the Target Company Shares and the opinion of the Special Committee, the Target
Company requested that Mr. Mori and Blackstone raise the Tender Offer Price on the grounds that the
proposed Tender Offer Price of 2,700 yen cannot be evaluated as sufficient for the Target Company’s minority
shareholders, and that in the event that the majority-of-minority condition is not set, offering the terms of thetransaction, including a higher Tender Offer Price, to the minority shareholders of the Target Company will
ensure the stability of the closing of the Tender Offer. In response to such request from the Target Company,on May 7, 2024, Mr. Mori and Blackstone proposed to the Target Company that the Tender Offer Price shallbe 2,800 yen, and responded that it is difficult to raise the Tender Offer Price further as a result of the final
review. Subsequently, on May 9, 2024, Target Company responded to Mr. Mori and Blackstone that while theTarget Company recognized that the intrinsic value of the Target Company was evaluated to a certain extent
in the proposed Tender Offer Price of 2,800 yen and that the price was at market level compared to similartransactions in terms of the premium level to the current market share price of the Target Company, it wasconcerned that the intrinsic value of the Target Company might not be evaluated to the maximum extent.
Therefore, the Target Company explained its recognition of the Target Company’s intrinsic value andrequested an explanation of Mr. Mori’s and Blackstone’s recognition of the Target Company’s intrinsic value,
as well as requesting proposals on any other matters that have not yet been proposed. In response to such
request from the Target Company, on May 10, 2024, Mr. Mori and Blackstone explained to the Target
Company their thoughts on how they see each segment of the Target Company’s business plan, and statedthat since there is no doubt about the future potential of the Target Company and the growth potential of its- 18-

business, and it is difficult to further increase the offer price, and that given that the proposal is based on anunderstanding of the Target Company’s recognition of its intrinsic value as explained by the Target Company
on May 9, 2024, they would maintain the Tender Offer Price at 2,800 yen, and that although the Tender Offer
requires the completion of obtaining the Clearance, as it is expected to take a certain period of time to complete
the procedures and responses related to the Clearance, they plan to conduct the Tender Offer promptly after
the completion of obtaining the Clearance. Subsequently, on May 10, 2024, the Target Company responded
that in the opinion of the Target Company as of the time of such response, the Tender Offer Price of 2,800
yen is acceptable, subject to the final decision being made through a resolution of the Target Company’s boardof directors after considering the report of the Special Committee.
Furthermore, the Target Company has received from City-Yuwa Partners, its legal advisor, necessary legal
advice on the method and process of decision-making by the Target Company’s board of directors, including
various procedures regarding the Transaction, and other points to be noted, as well as a report dated May 10,2024 from the Special Committee (the “Report”). For the summary of the Report and specific activities of theSpecial Committee, please refer to the section titled “ ③ The Target Company’s Establishment of an
Independent Special Committee and Procurement of a Report from such Special Committee” in “(Measures
to Secure the Fairness of the Tender Offer, Such as Measures to Secure the Fairness of the Price of Tender
Offer, etc. and Measures to Avoid Conflicts of Interest)” under “② Background of Calculation” of “(4) Basisof Calculation of the Tender Offer Price, Etc.” in “2. Outline of Tender Offer” below.
Based on the legal advice received from City-Yuwa Partners and the Share Valuation Report (defined below)
obtained from KPMG on May 10, 2024, the Target Company carefully discussed and considered whether theTarget Company’s corporate value can be improved through the Transaction, while fully respecting thecontent of the Report submitted by the Special Committee, and whether the terms and conditions of theTransaction, including the Tender Offer Price, are appropriate. As explained in this “b. Background to thedecision of the Target Company to support the Tender Offer and reasons therefor,” the Target Company
recognizes that the business environment surrounding the Target Company’s Group is changing on a daily
basis, that the needs for clinical trials are diversifying due to the increase in and the globalization ofdevelopment of new technologies such as regenerative medicine, the shortening of development periods, andchanges in development methods, that issues such as “drug lag” and “drug loss” are becoming more apparent,
and that it is required to respond promptly and appropriately to solutions of issues in the pharmaceuticaldevelopment environment in Japan and to drastic changes in the environment. In this business environment,
specifically, the Target Company’s Group has identified the following management issues and are working
on measures to address each management issue.
a)Improvement of profitability

The Target Company’s Group is focusing on in-house development, contract manufacturing, and development
support in the field of advanced medicine, such as gene therapy and regenerative medicine, in order tocontribute to the development of new pharmaceuticals and medical technology. However, it will take aconsiderable amount of time to secure stable earnings in the advanced medicine business and drug discovery
business, and the Target Company’s Group believes that improving profitability in the SMO Business, CRO
Business and medical support business is a challenge. In the SMO Business, the Target Company’s Group is
striving to acquire projects targeting areas with high development needs, and to improve revenues and profits
by setting appropriate contract unit prices and allocating human resources appropriately according to thenature of the support provided. In the CRO Business, the Target Company’s Group is working to expand
contracts for early-stage clinical trials overseas and in Japan, and is stepping up efforts to expand contracts
for new clinical trials in academia and for regenerative medicine and other products. In the medical support
business, the Target Company’s Group is working to improve the profitability of the facilities it operates in
the clinic mall business. In the advanced medical business, in addition to securing earnings by selling iPSCell Production Kits and promoting the licensing business related to patent licensing of the technology for
producing iPS cells, the Target Company’s Group is working to expand earnings and profits through the EC
business, which sells cosmetics using iPS cell culture supernatant solution as an ingredient and over-thecounter drugs and quasi-drugs. Furthermore, the Target Company’s Group is striving to create new
pharmaceuticals and regenerative medicine products, such as gene therapeutic drugs and gene editing
technologies, using the Target Company’s Group’s superior gene transfer technology, and is aiming for earlyout-licensing of its main pipeline products.
- 19-b) Financing
The Target Company’s Group is making ongoing investments in human resources, research and development,
and other areas. The Target Company’s Group believes that these investments are necessary for its future
growth, and is considering the possibility of securing development funds through joint research withpharmaceutical companies, etc. and raising funds through financial institutions and capital markets, etc., asnecessary.
c)

Development of internal control system

The Target Company’s Group has long been working to enhance corporate governance by strengthening thesupervisory function of directors and improving management transparency, and has been improving its
internal control system to increase the transparency and speed of decision making. The Target Company’sGroup is expanding its business through M&A and other means, and the Target Company’s Group believes
that it is important to share its philosophy, vision, etc. with the newly grouped affiliated companies, etc., andto achieve substantial management integration, including integration of human resources, organization,
infrastructure, etc., as soon as possible. Under such circumstances, the Target Company’s Group has
established the Affiliated Company Management Regulations to ensure the appropriateness of operations ofaffiliated companies, etc. In addition, the Target Company’s Group is striving to maintain an internal
environment to accurately understand and manage the management of affiliated companies by regularly
requesting reports on operations, business performance, and other important matters, and by ensuring a systemthat requires prior approval from the Target Company for matters that may have a significant impact on
operations or business performance.
d) Securing quality of work
The Target Company’s Group believes that the environment surrounding drug development is changing
rapidly, and that the needs for clinical trials are diversifying due to the increasing development of newtechnologies such as regenerative medicine, globalization of development, shortening of development periods,
and changes in development methods, and that, along with such changes, related laws and regulations
concerning quality such as ethics, science, and reliability are also becoming more complex and strict. Since
its establishment, the Target Company’s Group has been emphasizing the construction and management ofprocesses to ensure quality. By visualizing processes, constantly verifying and improving them, and unifying
work procedures within the group, the Target Company’s Group is striving to standardize quality at a highlevel and to support prompt implementation of tests.
e)Securing human resources

It is necessary to secure human resources suitable for the growth of each business, such as CRC/SMA (Note15) in the SMO Business, CRA (Note 16) and DM (Note 17) in the CRO Business, and personnel for researchand development, vector manufacturing, cell culture processing, etc. in the advanced medical business, andthe Target Company’s Group considers recruitment and human resources development as important issues
and is addressing them.
(Note 15)

“SMA” is an abbreviation for “Site Management Associate” and refers to staff who provide full
administrative support for clinical trials at SMOs.

(Note 16) “CRA” is an abbreviation of “Clinical Research Associate” and refers to staff who monitor whether
clinical trials and clinical research for drug development are being conducted appropriately at
CROs.
(Note 17)

“DM” is an abbreviation of “Data Manager” and refers to staff who perform data quality control
duties for clinical trials and clinical research at CROs.

As explained in “① Background, purpose and decision-making process of the Tender Offer” above, in theprocess of discussions and negotiations, the Tender Offeror recognizes that in order for the Target Company- 20-

to realize the increase of its corporate value over the medium to long term, it is necessary to establish acompetitive global framework through various measures, including expansion of overseas business anddiscontinuous growth through M&A. Based on this recognition, the Tender Offeror communicated to theTarget Company that the Tender Offeror believed that by utilizing Blackstone’s knowledge and network topromote management reform, the Target Company’s Group can further expand the SMO Business throughoptimal resource allocation and advanced sales strategies and expand the CRO contracting opportunities byutilizing Blackstone’s network, achieve new growth that the Target Company’s Group could not achieve on
its own, and evolve into a healthcare service platform with a larger scale of business. The Target Company
also recognizes that these measures are those that it should actively promote to further increase its corporate
value over the medium to long term.
Based on the above, the Target Company has determined that the Transaction will contribute to theenhancement of the medium to long term corporate value of the Target Company’s Group.
If the Target Company is privatized, it will no longer be able to raise funds through equity financing from thecapital markets. In addition, it is considered that this may have an impact on recruiting outstanding humanresources and expanding the number of business partners by improving the social credibility and reputation
enjoyed by the Target Company as a listed company. However, in light of the current financial conditions of
the Target Company and the recent low interest rate environment in indirect financing, the need for largescale financing through the use of equity financing is not expected in the next few years. Furthermore, theTarget Company believes that the disadvantages of privatization are limited due to the following reasons:
recruiting outstanding human resources and expanding the number of business partners by improving thesocial credibility and reputation of the Target Company are some of the benefits to be gained through businessactivities; while it is conceivable that the privatization of the Target Company could have an impact on
recruiting human resources, such impact is not expected to be such big due to the brand power and reputationthat the Target Company has built up to date; and listing maintenance costs, which continued to increase inorder to comply with the Corporate Governance Code, etc., resources and expenses related to disclosure underthe Act and audit compliance and management resources related to shareholder relations will be able to beallocated to resolve other management issues.
For this reason, the Target Company determined at its board of directors’ meeting on May 13, 2024 that themerits of privatization exceeded its disadvantages.
During these discussions and considerations, the Target Company determined that the Tender Offer Price is areasonable price that ensures the benefits to be enjoyed by the general shareholders of the Target Company,
and the Tender Offer provides the general shareholders of the Target Company with a reasonable opportunity
to sell their shares at a price with an appropriate premium, based on the reasons that (a) the Tender Offer Priceexceeds the maximum price in the rage of the results of the calculation based on the market share price averagemethod and is within the range of the results of the calculation based on the discounted cash flow method (the“DCF Method”) in the results of KPMG’s calculation of the Target Company Shares as described in thesection titled “① Procurement by the Target Company of a Share Valuation Report from an Independent ThirdParty Valuation Institution” in “(Measures to Secure the Fairness of the Tender Offer, Such as Measures to
Secure the Fairness of the Price of Tender Offer, etc. and Measures to Avoid Conflicts of Interest)” under “②Background of Calculation” of “(4) Basis of Calculation of the Tender Offer Price, Etc.” in “2. Outline of
Tender Offer” below, (b) the Tender Offer Price can be evaluated as a reasonable premium, because a premiumof 51.35% on 1,850 yen, which is the closing price of the Target Company Shares on the Tokyo Stock
Exchange Prime Market on May 10, 2024, the business day immediately preceding the announcement of theTender Offer, a premium of 54.61% on 1,811 yen, which is the simple average of the closing price of theTarget Company Shares for the past one (1) month, a premium of 52.42% on 1,837 yen, which is the simple
average of the closing price of the Target Company Shares for the past three (3) months, and a premium of
46.44% on 1,912 yen, which is the simple average of the closing price of the Target Company Shares for the
past six (6) months, are respectively added, and these premium standards exceed the median price of thepremium standards in the other MBO deals in recent years (fifty-six (56) MBO deals for the purpose ofprivatization for which tender offers were completed by April 15, 2024 and which were announced after June
28, 2019, when the Ministry of Economy, Trade and Industry published its “Guidelines on Fair M&A Practices- Toward Enhancing Corporate Value and Securing Shareholder Benefits”, excluding deals where a tender
offer was not implemented or not completed and where the target company neither supported nor- 21-

recommended the tender), which consist of a premium of 42.44% on the closing price on the business day
immediately preceding the announcement, a premium of 45.18% on the simple average of the closing pricefor the past one (1) month up to the business day immediately preceding the announcement, a premium of
45.52% on the simple average of the closing price for the past three (3) months up to the business day
immediately preceding the announcement, and a premium of 48.57% on the simple average of the closing
price for the past six (6) months up to the business day immediately preceding the announcement (rounded totwo decimal places), (c) it is conceivable that the interests of general shareholders are taken into consideration,such as measures taken to eliminate conflicts of interest as described in the section titled “(Measures to Secure
the Fairness of the Tender Offer, Such as Measures to Secure the Fairness of the Price of Tender Offer, etc.
and Measures to Avoid Conflicts of Interest)” under “② Background of Calculation” of “(4) Basis ofCalculation of the Tender Offer Price, Etc.” in “2. Outline of Tender Offer” below, (d) the Tender Offer Pricewas determined after multiple rounds of discussions and negotiations between the Target Company andBlackstone and Mr. Mori, equivalent to discussions and negotiations in an arm’s length transaction, after
measures were taken to eliminate the aforementioned conflicts of interest, and more specifically, based on thecontent of the results of KPMG’s calculation regarding the value of the Target Company Shares and legal
advice from City-Yuwa Partners on the method and process of decision-making regarding the Transaction andother points to be noted, as well as the opinions, instructions, requests, etc. by the Special Committee, andafter in-good-faith and continuous discussions and negotiations with Blackstone and Mr. Mori, the Tender
Offer Price has been increased by 400 yen (16.7%) (rounded to two decimal places) per share over the initially
proposed price (2,400 yen per share), and (e) as explained in the section titled “③ The Target Company’s
Establishment of an Independent Special Committee and Procurement of a Report from such Special
Committee” in “(Measures to Secure the Fairness of the Tender Offer, Such as Measures to Secure the Fairnessof the Price of Tender Offer, etc. and Measures to Avoid Conflicts of Interest)” under “② Background of
Calculation” of “(4) Basis of Calculation of the Tender Offer Price, Etc.” in “2. Outline of Tender Offer”
below, the Tender Offer Price has been determined to be reasonable in the Report obtained from the Special
Committee.
Based on the above, the Target Company has determined that the Transaction contributes to improving thecorporate value of the Target Company and that the terms and conditions pertaining to the Transaction,
including the Tender Offer Price, are reasonable. Therefore, at its board of directors’ meeting on May 13,
2024, in the opinion of the Target Company as of the same date, if the Tender Offer is commenced, to express
the opinion in favor of the Tender Offer and recommend its shareholders to apply for the Tender Offer.
As stated above, the Tender Offeror intends to promptly implement the Tender Offer upon fulfillment (orwaiver by the Tender Offeror) of the Conditions Precedent. As of the date hereof, the Tender Offeror aims tocommence the Tender Offer by around mid-June 2024. However, as it is difficult to accurately forecast thetime required for the review procedures by the Australian authorities responsible for the Clearance process,the Tender Offeror will announce the details of the Tender Offer schedule as soon as they are determined. In
addition, if the expected timing of the commencement of the Tender Offer is changed, the Tender Offeror willpromptly announce such change.
For this reason, the Target Company’s board of directors also resolved that, at the time the Tender Offer
commences, the Target Company shall request the Special Committee established by the Target Company toconsider whether there is any change in the opinion of the Special Committee in the Report submitted by theSpecial Committee to the board of directors of the Target Company dated May 10, 2024, and if there is nochange in the previous opinion, to state that opinion to the Target Company’s board of directors, and if there
is a change, to state the opinion after the change, and that based on such opinion, the Target Company willreiterate its opinion on the Tender Offer at the time of its commencement.
For details of the resolution of the Target Company’s board of directors’ meeting, please refer to the section
titled “④ Unanimous Approval by All of the Non-Interested Directors (including directors who are Audit &Supervisory Committee members) of the Target Company” in “(Measures to Secure the Fairness of the Tender
Offer, Such as Measures to Secure the Fairness of the Price of Tender Offer, etc. and Measures to Avoid
Conflicts of Interest)” under “② Background of Calculation” of “(4) Basis of Calculation of the Tender Offer
Price, Etc.” in “2. Outline of Tender Offer” below.
Since Mr. Mori plans to continue to manage the Target Company after the completion of the Tender Offer andis considering making a direct or indirect investment in the Tender Offeror, he did not participate in any- 22-deliberations or resolutions at the above board of directors’ meeting as a special interested director, nor did
he participate in any discussions or negotiations with the Tender Offeror on behalf of the Target Company,
because there is a conflict of interest with the Target Company regarding the Transaction.
③

Management policy after the Tender Offer

The Transaction is a so-called management buyout (MBO), and Mr. Mori’s Asset Management Company intends
to acquire a part of the Tender Offeror’s Parent Company Shares through the Reinvestment and Mr. Mori plans tocontinue managing the Target Company’s Group after the completion of the Tender Offer. He intends to promote
the management measures described in “① Background, purpose and decision-making process of the Tender
Offer” above. Although the details of the management framework, including executive composition of the Target
Company, after the Tender Offer will be determined after the completion of the Transaction through discussions
with BX Fund, Mr. Mori and Mr. Mori’s Asset Management Company entered into a shareholders agreement dated
as of May 13, 2024 (“Shareholders Agreement”), which includes details concerning the management of theTender Offeror’s Parent Company, the Tender Offeror and the Target Company after the Transaction and thehandling of the Tender Offeror’s Parent Company Shares, and agreed that the number of directors of the Target
Company after the completion of the Transaction will be five (5) (two (2) for the representative director andpresident), of which BX Fund shall appoint three (3) persons, including one (1) representative director andpresident, and Mr. Mori and Mr. Mori’s Asset Management Company shall appoint two (2) persons, including one(1) representative director and president.
For the details of the Shareholders Agreement, please refer to the section titled “b. The Shareholders Agreement”
in “(6) Material Agreements Related to the Tender Offer” below. While the Tender Offeror intends to carry out theMerger after the implementation of the Transaction and the Reinvestment, the timing of the Merger has not been
determined as of the date hereof. The Tender Offeror’s policy is to maintain the current management framework,
including the officers of the Target Company, and it is planned that they will continue to perform his/her duties
after the Transaction. However, the Tender Offeror and the officers of the Target Company other than Mr. Mori
have not agreed on the appointment of the officers after the Transaction and on the treatment of the officers after
the Transaction, and the specific treatment of the officers after the Transaction has not been determined as of thedate hereof.
Blackstone plans to combine Blackstone’s domestic and overseas healthcare network and various management
support resources to support the growth of the Target Company’s Group.
(3) Measures to Secure the Fairness of the Tender Offer, Such as Measures to Secure the Fairness of the Price ofTender Offer, etc. and Measures to Avoid Conflicts of Interest
The Tender Offer is to be made as part of the Transaction which falls under the so-called management buyout(MBO) and in light of the existence of structural conflicts of interest, etc., the following measures a. to f. aretaken in order to secure fairness of the Transaction, including the Tender Offer, from the perspective of
eliminating arbitrariness and avoiding conflicts of interest in the decision-making process that leads to thedecision to implement the Tender Offer. Therefore, the Tender Offeror and the Target Company believe thatdue consideration has been given to the interests of minority shareholders.
Please note that the descriptions of the measures implemented by the Target Company among the following
descriptions are based on the press releases of the Target Company and the explanation received from theTarget Company.
a.

Procurement by the Target Company of a Share Valuation Report from an Independent Third-Party
Valuation Institutionb.

Procurement by the Target Company of Advice from an Independent Law Firmc.

The Target Company’s Establishment of an Independent Special Committee and Procurement of a Reportfrom such Special Committee

- 23
-

d.

Unanimous Approval by All of the Non-Interested Directors (including directors who are Audit &Supervisory Committee members) of the Target Company

e.

Establishment by the Target Company of an Independent Examination Frameworkf.

Securing Objective Conditions to Ensure the Fairness of the Tender Offer

For details of the above, please refer to “(Measures to Secure the Fairness of the Tender Offer, Such as
Measures to Secure the Fairness of the Price of Tender Offer, etc. and Measures to Avoid Conflicts of Interest)”of “② Background of Calculation” in “(4) Basis of Calculation of the Tender Offer Price, Etc.” in “2. Outlineof Tender Offer”.
(4) Policy on Organizational Restructuring after the Tender Offer (Matters concerning so-called Two-Step Acquisition)
As described in “(1) Overview of the Tender Offer” above, in the event that the Tender Offeror is unable toacquire all of the Target Company Shares (excluding the treasury shares owned by the Target Company and
the Non-Tendered Agreed Shares) in the Tender Offer, the Tender Offeror intends to implement the SqueezeOut Procedure by the following methods after the conclusion of the Tender Offer.
Promptly after the completion of the settlement of the Tender Offer, the Tender Offeror intends to request
holding an extraordinary shareholders’ meeting (hereinafter referred to as the “Extraordinary Shareholders’Meeting”) that includes the resolution of implementation of the Share Consolidation and partial amendmentof the articles of incorporation to the effect that the number of shares per unit shall be abolished on thecondition that the Share Consolidation takes effect. The Tender Offeror considers it desirable to hold theExtraordinary Shareholders’ Meeting as soon as possible from the viewpoint of enhancing the corporate valueof the Target Company. Therefore, the Tender Offeror intends to request the Target Company to make apublic notice of establishment of record date during the tender offer period for the Tender Offer (the “Tender
Offer Period”) so that a date soon after the commencement of the settlement of the Tender Offer will become
the record date of the Extraordinary Shareholders’ Meeting. The date of the Extraordinary Shareholders’Meeting has not been determined. The Tender Offeror and Mr. Mori are going to vote in favor of the above
resolutions at the Extraordinary Shareholders’ Meeting.
In the event that the resolution of the Share Consolidation is approved at the Extraordinary Shareholders’Meeting, the shareholders of the Target Company will have the number of shares of the Target Company
according to the ratio of the Share Consolidation approved at the Extraordinary Shareholders’ Meeting as ofthe date when the Share Consolidation becomes effective. If a fraction of less than one (1) share is generated
in the number of shares as a result of the Share Consolidation, money will be delivered to the shareholders of
the Target Company for whom a fraction of less than one (1) share is generated, by selling to the Target
Company or the Tender Offeror the Target Company Shares equivalent to the total of such fraction (in thecase of a fraction of less than one (1) share in the total, such fraction shall be rounded off; the same shallapply hereinafter) in accordance with Article 235 of the Companies Act and other procedures set forth in
relevant laws and regulations. With respect to the sale price of the Target Company Shares equivalent to thetotal number of such fractions, the Tender Offeror intends to request the Target Company to apply to the courtfor permission of private sale after setting the amount of money to be delivered to the shareholders of theTarget Company who did not tender their shares in the Tender Offer (excluding the Tender Offeror and Mr.
Mori) as a result of such sale to be the same as the price obtained by multiplying the Tender Offer Price by
the number of the Target Company Shares held by each such shareholder.
Although the Share Consolidation ratio has not yet been determined as of today, the Tender Offeror isplanning to request that the number of shares held by the shareholders of the Target Company who did nottender their shares in the Tender Offer (excluding the Tender Offeror and Mr. Mori) be a fraction of less thanone (1) share so that only the Tender Offeror and Mr. Mori will own all of the Target Company Shares(excluding the treasury shares held by the Target Company). Specific procedures for the Share Consolidation
will be announced promptly by the Target Company upon decision after due consultation between the Tender
Offeror and the Target Company.

- 24-

As for the provisions that intend to protect the rights of the general shareholders of the Target Company inrelation to the Share Consolidation, the Companies Act stipulates that if the Share Consolidation is made andit results in a fraction of less than one (1) share, the shareholders of the Target Company who did not tendertheir shares in the Tender Offer (excluding Tender Offeror, Mr. Mori, and the Target Company) may request
the Target Company to purchase at a fair price all of their shares which are less than one (1) share, and may
file a petition for the court to determine the price of the Target Company Shares, in accordance with theprovisions of Article 182-4 and Article 182-5 of the Companies Act and other relevant laws and regulations.
As mentioned above, as a result of the Share Consolidation, the number of shares held by the shareholders of
the Target Company who did not tender their shares in the Tender Offer (excluding the Tender Offeror, Mr.
Mori and the subject parties) is expected to be a fraction of less than one (1) share. Therefore, the shareholdersof the Target Company who oppose to the Share Consolidation are expected to be able to file the above
petition. In the event the above petition is filed, the purchase price shall be finally determined by the court.
The above procedures would depend on the status of revisions, enforcement, and interpretation of relevantlaws and regulations, and implementation of the procedures may take time or the method of implementation
may change. Provided, however, that even in such case, if the Tender Offer is successful, a method that would
deliver money to the shareholders of the Target Company who did not tender their shares in the Tender Offer(excluding the Tender Offeror, Mr. Mori, and the Target Company) would be adopted. In such case, theamount of money to be delivered to such shareholders of the Target Company will be calculated to be thesame as the price obtained by multiplying the Tender Offer Price by the number of the Target Company
Shares held by such shareholders of the Target Company.
After consultation, the Target Company will promptly announce the specific procedures and the timing of
implementation of the above procedures.
The Tender Offer does not solicit the approval of the shareholders of the Target Company at the Extraordinary
Shareholders’ Meeting. In addition, the shareholders of the Target Company should consult with tax expertson their own responsibility with regard to tendering shares in the Tender Offer or the tax treatment in each of
the above procedures.
(5) Likelihood of Delisting and the Grounds therefor
The Target Company Shares are listed on the Tokyo Stock Exchange Prime Market as of today. As the Tender
Offeror does not set the maximum number of shares to be purchased in the Tender Offer, depending on the
results of the Tender Offer, the Target Company Shares may be delisted after certain procedures in accordancewith the delisting standards of the Tokyo Stock Exchange. Even if the standards are not met at the time of theconclusion of the Tender Offer, the Tender Offeror intends to implement the Squeeze-Out Procedures as
described in “(4) Policy on Organizational Restructuring after the Tender Offer (Matters concerning so-called
Two-Step Acquisition)” above after the conclusion of the Tender Offer. In such case, the Target Company
Shares will be delisted through the procedure in accordance with the delisting standards of the Tokyo Stock
Exchange. After delisting, the Target Company Shares cannot be traded on the Tokyo Stock Exchange Prime
Market.
(6) Material Agreements Related to the Tender Offera.

The Tender Offer Agreement

The Tender Offeror, together with the Tender Offeror's Parent Company and the BX Fund entered into theTender Offer Agreement with Mr. Mori and Mr. Mori’s Asset Management Company as of May 13, 2024,
which contains the following (Note 1). There is no agreement regarding the Tender Offer between the Tender
Offeror, Mr. Mori and Mr. Mori’s Asset Management Company except for the Tender Offer Agreement andb. the Shareholders Agreement below, and there is no consideration provided by the Tender Offeror to Mr.
Mori and Mr. Mori’s Asset Management Company in connection with the Tender Offer other than the money
obtained by tendering their shares in the Tender Offer.
(i) Mr. Mori shall tender his shares in the Tender Offer in relation to the Tendered Agreed Shares (3,124,250
shares, ownership ratio: 25.80%) among the Target Shares held by him;
- 25-

(ii) Mr. Mori shall not tender his shares the Tender Offer for any of the Non-Tendered Agreed Shares(1,655,200 shares, ownership ratio: 13.67%) among the Target Company Shares held by him;(iii) Mr. Mori shall make efforts to have his relatives, Ms. Toshie Mori (825,000 shares, ownership: 6.81%),and Mr. Ryusuke Mori (75,000 shares, ownership: 0.62%), tender their shares in the Tender Offer;(iv) After having the Target Shares become private by implementing the Transaction which consists of theTender Offer, the Reinvestment I, the Squeeze Out Procedures, the Share Transfer, and the Reinvestment
II, the Target Company shall become a wholly-owned subsidiary of the Tender Offeror’s Parent
Company and the Tender Offeror, and the BX Fund and Mr. Mori’s Asset Management Company shallbecome the shareholders of the Tender Offeror’s Parent Company at a voting rights ratio of 55.0 to 45.0
respectively; and(v) Mr. Mori shall, by the day after the second business day of the commencement of settlement of theTender Offer, fully repay the secured debt of the security interest established on the Non-Tendered
Agreed Shares and extinguish such security interest.
(Note 1) In the Tender Offer Agreement, the Tender Offeror, the Target Company and the BX Fund havemade representations and warranties on (i) lawful incorporation, valid existence and legal capacity,(ii) full performance of the execution and performance of the Tender Offer Agreement, (iii)
enforceability of the Tender Offer Agreement, (iv) no violations of laws and regulations in theexecution and performance of the Tender Offer Agreement, (v) procurement and performance ofthe licenses and permits for the execution and performance of the Shareholders Agreement, (vi)no causes for bankruptcy, and (vii) no relationships with antisocial forces. Mr. Mori and Mr.
Mori’s Asset Management Company have made representations and warranties on (i) having theright, authority and capacity for the lawful and valid execution and performance of the Tender
Offer Agreement, (ii) enforceability of the Tender Offer Agreement, (iii) no violations of laws andregulations in the execution and performance of the Tender Offer Agreement, (iv) procurement
and performance of the licenses and permits that are necessary for the execution and performanceof the Tender Offer Agreement, (v) Mr. Mori’s and Mr. Mori’s relatives’ rights in the issued sharesof Mr. Mori’s Asset Management Company, (vi) no causes for bankruptcy, (vii) compliance with
anti-corruption related laws, and (viii) no relationships with antisocial forces. In addition, Mr. Mori
and Mr. Mori’s Asset Management Company have made representations and warranties on theTarget Company Group regarding (i) lawful incorporation, valid existence and legal capacity, (ii)absence of violation of laws and regulations in the execution and performance of the Tender Offer
Agreement, (iii) procurement and performance of the licenses and permits for the execution andperformance of the Tender Offer Agreement, (iv) no causes for bankruptcy, (v) no relationships
with antisocial forces, (vi) matters related to the rights to the Target Company Shares, (vii)
subsidiaries and affiliate companies that belong to the Tagert Company Group, (viii) absence of
violations of laws and regulations and absence of litigations, (ix) no material non-public
information and (x) compliance with anti-corruption related laws.
b.

The Shareholders Agreement

With respect to the management of the Tender Offeror’s Parent Company, the Tender Offeror and the Target
Company, and treatment of the Tender Offeror’s Parent Company’s shares, the BX Fund entered into the
Shareholders Agreement with Mr. Mori and Mr. Mori’s Asset Management Company as of May 13, 2024,
that contains the following (Note 2):(i) the number of directors of the Tender Offeror’s Parent Company and the Tender Offeror (excluding theTender Offeror after the effective date of the Merger) shall be 1, and the BX Fund shall appoint suchdirectors;(ii) the number of directors of the Target Company after the completion of the Transaction shall be 5 (thenumber of presidents and representative directors shall be 2) and Mr. Mori and Mr. Mori’s AssetManagement Company shall appoint 2 directors (including 1 president and representative director) andthe BX Fund shall appoint 3 directors (including 1 president and representative director);- 26-

(iii) the number of auditors of the Target Company after the completion of the Transaction shall be 3 or less,and all of the auditors shall be appointed by the BX Fund;(iv) Mr. Mori’s Asset Management Company may not directly or indirectly transfer, succeed, create asecurity interest in, or otherwise dispose of all or part of the Tender Offer’s Parent Company Shares heldby him without the prior written consent of the BX Fund;(v) if the BX Fund intends to transfer to a third party (the “Share Transferee”) all or part of the Tender
Offeror’s Parent Company Shares (but only in the case of a transfer of shares that would result in thetransfer of more than 10% of the total number of voting rights), the BX Fund may request Mr. Mori’s
Asset Management Company to sell all or part of the Tender Offeror’s Parent Company Shares held by
Mr. Mori’s Asset Management Company to the Share Transferee or to another third party designated by
the BX Fund on the same terms as those on which the BX Fund sells the Tender Offeror’s Parent
Company Shares; and(vi) if the BX Fund intends to transfer to the Share Transferee all or part of the Tender Offeror’s Parent
Company Shares, Mr. Mori’s Asset Management Company may request the BX Fund to sell all or partof the Tender Offeror’s Parent Company Shares held by Mr. Mori’s Asset Management Company to the
Share Transferee on the same terms on which the BX Funds sells its Tender Offeror’s Parent Company
Shares to the Share Transferee.
(Note 2) In the Shareholders Agreement, the BX Fund has made representations and warrants on (i) lawful
incorporation, valid existence and legal capacity, (ii) full performance of the execution andperformance of the Shareholders Agreement, (iii) enforceability of the Shareholders Agreement,(iv) no violations of laws and regulations in the execution and performance of the Shareholders
Agreement, (v) procurement and performance of the licenses and permits that are necessary forthe execution and performance of the Shareholders Agreement, (vi) no causes for bankruptcy, and(vii) no relationships with antisocial forces. Mr. Mori and Mr. Mori’s Asset Management
Company have made representations and warranties on (i) lawful incorporation, valid existence
and legal capacity of Mr. Mori’s Asset Management Company, (ii) full performance of theexecution and performance of the Shareholders Agreement (as to Mr. Mori, right, authority andcapacity for the lawful and valid execution and performance of the Shareholders Agreement), (iii)
enforceability of the Shareholders Agreement, (iv) no violations of laws and regulations in theexecution and performance of the Shareholders Agreement, (v) procurement and performance ofthe licenses and permits that are necessary for the execution and performance of the Shareholders
Agreement, (vi) Mr. Mori’s and Mr. Mori’s relatives’ rights in the issued shares of Mr. Mori’s
Asset Management Company, (vii) no causes for bankruptcy, (viii) compliance with anticorruption related laws, (ix) no relationships with antisocial forces, and (x) no events of default
for Mr. Mori, Mr. Mori’s Asset Management Company, the Target Company, directors nominatedby Mr. Mori, directors of Mr. Mori’s Management Company or the Target Company, shareholders
or equity holders of Mr. Mori’s Asset Management Company.
2. Outline of Tender Offer(1) Outline of the Target① NameI'rom Group Co., Ltd.

② Address

2-10-2, Fujimi, Chiyoda-ku, Tokyo③

Title and Name of
Toyotaka Mori, President and Representative Director
Representative④ Business Outline⑤

SMO Business, CRO Business, Advanced Medical Business, Medical Support
BusinessAmount of Stated
3,899 million yen (as of September 30, 2023)
Capital⑥ DateIncorporationofApril 9, 1997- 27-

Toyotaka Mori

39.47％

Rie Mori

6.81％

Master Trust Bank of Japan Ltd. (Trust Account)

4.93％

Major
Central Tanshi Co., Ltd.
shareholders andJapan Custody Bank, Ltd. (Trust Account)shareholding⑦
ratios(asof Taichi Yabu
September
30,
Ryusuke Mori
2023) (Note)

1.02％
0.98％
0.66％
0.62％

Ryoichi Muramatsu

0.50％

Shigeru Yamazawa

0.49％

Takeshi Suzuki

0.46％⑧ Relationship between the Offeror and the Target
CapitalRelationship

Not applicable.

Personnel
Relationship

Not applicable.

Business
Relationship

Not applicable.

Status as Related(Note)

Not applicable.

Information in “⑦ Major shareholders and shareholding ratios” is taken from “Status of major
shareholders” in the Second Quarter Quarterly Report for the 27th fiscal year which the Target
Company filed as of November 7, 2023.

(2) Schedule
It is contemplated that the Tender Offer will be implemented upon satisfaction (or waiver by the Tender Offeror) of theConditions Precedent. The Tender Offeror intends to promptly implement the Tender Offer upon satisfaction (or waiver by
the Tender Offeror) of the Conditions Precedent. As of today, the Tender Offeror aims to commence the Tender Offeraround mid-June 2024. However, since it is difficult to accurately predict the time required for the review procedures by
the Australian authorities responsible for the Clearance process, the Tender Offeror will announce the detailed schedule of
the Tender Offer once it has been determined. In the event of any change in the expected timing of the commencement of
the Tender Offer, we will promptly announce such change.
The Tender Offer Period is scheduled to be thirty (30) business days, in principle.
(3) Tender Offer Price
2,800 yen per share of common stock.
(4) Basis of Calculation of the Tender Offer Price, Etc.
①

Basis of Calculation

In order to determine the Tender Offer Price, the Tender Offeror conducted a multifaceted and comprehensive analysisof the business and financial conditions of the Target Company, based on the results of the due diligence conductedfrom early March 2024 to early April 2024 on the financial data published by the Target Company and on the Target
Company. In addition, in light of the fact that the Target Company Shares are traded on a stock exchange, the Tender
Offeror referred to the closing price (1,850 yen) of the Target Company Shares in the Tokyo Stock Exchange Prime- 28-

Market on May 10, 2024, which is the business day immediately prior to the date of publication of the Tender Offer(May 13, 2024), and the simple average of closing prices for the past month, the past three (3) months and the pastsix (6) months (1,811 yen, 1,837 yen and 1,912 yen). We have not obtained a share valuation report or a fairness
opinion from a third-party valuation institution because we have determined the Tender Offer Price bycomprehensively considering whether the Tender Offer is in favor of the Target Company and the prospect of thesuccess of the Tender Offer and because the Tender Offer Price was determined through consultation and negotiation
with the Target Company.
The Tender Offer Price 2,800 yen is the price that reflects (i) a premium of 51.35% of 1,850 yen, the closing price of
the Target Company Shares on the Tokyo Stock Exchange Prime Market on May 10, 2024, which is the business day
immediately prior to the announcement date of the Tender Offer, (ii) a premium of 54.61% of 1,811 yen, the simple
average of the closing price for the past one (1) month up to that date, (iii) a premium of 52.42% of 1,837 yen, thesimple average of the closing price for the past three (3) months up to that date, and (iv) a premium of 46.44% of
1,912 yen, the closing price for the past six (6) months up to that date, respectively.
②

Background of Calculation

As described above in “① Background, purpose and decision-making process of the Tender Offer” in “(2) Background,Purpose and Decision-Making Process of the Tender Offer, and Management Policy After the Tender Offer" in “1.
Purpose of the Purchase, etc.”,after Blackstone and Mr. Mori determined that it would be optimal to carry out theTransaction as partners based on a series of exchange of opinions Blackstone started due diligence on the Target
Company in early March 2024, thereby comprehensively analyzing and examining the Target Company's business andfinancial conditions. Blackstone held discussions not only with Mr. Mori but also with the Target Company to havediscussions toward the materialization of the Tender Offer, and on March 25, 2024, Blackstone submitted a letter ofintent to the Target Company. In response, as described above in “(2) Background, Purpose and Decision-Making
Process of the Tender Offer, and Management Policy After the Tender Offer” in “① Background, purpose and decisionmaking process of the Tender Offer” in “1. Purpose of the Purchase, etc.” above, the Target Company appointed CityYuwa Partners as its legal advisor independent from the Tender Offeror and KPMG as its financial advisor and thirdparty valuation institution independent from the Tender Offeror on March 11, 2024 to secure the fairness of theTransaction, including Tender Offer, such as fairness of the Tender Offer Price and requested KPMG to conduct a
valuation of the share value of the Target Company Shares. Since the Transaction, including the Tender Offer, falls
under the so-called management buyout (MBO) and there are structural conflicts of interest, in order to protect
the general shareholders of the Target Company, as a part of measures to secure fairness of the Transaction
from the perspective of securing the fairness of the Tender Offer Price in the Transaction, eliminating
arbitrariness in the process of decision making for the implementation of the Transaction and conflicts ofinterest, the board of directors decided on March 11, 2024, to establish the Special Committee independent
from the Tender Offeror-Related Parties and the Target Company consisting of four (4) outside directors of
the Target Company. For the composition of the members of the Special Committee, the authority granted to it, andthe specific activities of the Special Committee, please refer to “③ The Target Company’s Establishment of an
Independent Special Committee and Procurement of a Report from such Special Committee” in “(Measures to Secure
the Fairness of the Tender Offer, Such as Measures to Secure the Fairness of the Price of Tender Offer, etc.
and Measures to Avoid Conflicts of Interest)” below. The Tender Offeror-Related Parties and the Target Company
then commenced specific discussions and deliberations regarding the Transaction. The Tender Offeror-Related Parties
have continued discussions with the Target Company and the Special Committee regarding the significance and purposeof the Transaction and the synergies expected to emerge from the Transaction. In addition, Blackstone conducted due
diligence on the Target Company from early March to mid-April 2023. Since April 17, 2023, Mr. Mori and Blackstone
had multiple times of discussion and negotiations with respect to the Tender Offer Price as stated in “① Background,purpose and decision-making process of the Tender Offer” in “(2) Background, Purpose and Decision-Making Processof the Tender Offer, and Management Policy After the Tender Offer” in “1. Purpose of the Purchase, Etc.” above.
As a result of these discussions and negotiations, on May 11, 2024, the Tender Offeror received a written response fromthe Target Company accepting the Tender Offer Price of 2,800 yen. The Tender Offeror decided to conduct the Tender
Offer with the Tender Offer Price of 2,800 yen per share of the Target Company Shares as part of the Transaction, subject
to the satisfaction of the Conditions Precedent, such as completion of the Clearance (or the waiver thereof by the Tender
Offeror).

- 29-

(Measures to Secure the Fairness of the Tender Offer, Such as Measures to Secure the Fairness of the Priceof Tender Offer, etc. and Measures to Avoid Conflicts of Interest)
In light of the facts such as the Tender Offer is conducted as part of the Transaction that falls under so-called
management buyout (MBO) and thus structural conflict of interests exist, in order to ensure fairness of the Transaction,
including the Tender Offer, from the perspective of ensuring fairness of the Tender Offer Price, eliminating
arbitrariness in the process of deciding the implementation of the Tender Offer and preventing conflict of interests,
the following measures i. to vi. have been taken. Therefore, the Tender Offeror and the Target Company believe thatdue consideration has been given to the interests of minority shareholders of the Target Company. Among thefollowing, measures taken by the Target Company are based on the press release of the Target Company and the
explanation received from the Target Company.
① Procurement by the Target Company of a Share Valuation Report from an Independent Third-Party Valuation
Institution
According to the press release of the Target Company, in expressing its opinion on the Transaction, including theTender Offer, the Target Company requested KPMG, the financial advisor of the Target Company, to calculate thevalue of the Target Company Shares as a third-party valuation institution independent from the Tender Offer-Related
Parties, in order to secure the fairness of the Transaction, including the Tender Offer, such as fairness of the Tender
Offer Price. The Target Company obtained a share valuation report (hereinafter referred to as the “Share Valuation
Report”) as of May 10, 2024. KPMG does not fall under the category of a related party of the Tender Offer-Related
Parties and does not have a material interest in the Tender Offer while the fees to be paid to KPMG in connection
with the Transaction includes a contingent fee payable upon the conclusion of the Transaction, etc. Taking into
consideration the general practices in similar transactions and the pros and cons of the fee system which would incura reasonable monetary burden to the Target Company in the event of a failure of consummating the Transaction, theTarget Company determined that independence will not denied due to the inclusion of the contingent fee to be paidon the conditions of conclusion of the Transaction, and the Target Company decided to appoint KPMG as its financial
advisor and its third-party valuation institution with the fee system described above.
The Special Committee confirmed at its first Special Committee meeting that since the financial advisor and the thirdparty valuation institution appointed by the Target Company does not have issues in independence and expertise, theSpecial Committee approved them as the Target Company’s financial advisor and third-party valuation institution,and that the Special Committee may receive expert advice as necessary from them.
KPMG examined the calculation method to be adopted in calculating the share value of the Target Company Sharesfrom several methods for calculating the share value. Since there is a market share price as the Target Company’s
Shares are listed on the Tokyo Stock Exchange Prime Market, the share value was calculated using the market shareprice average method and the DCF method to reflect the status of future business activities. The Target Company
received the Share Valuation Report from KPMG on May 10, 2024. The Target Company has not obtained a written
opinion (fairness opinion) on the validity of the Tender Offer Price from KPMG because the Tender Offeror and theTarget Company have taken measures to secure the fairness of the Tender Offer Price and measures to avoid conflictsof interest. The scope of the value per Target Company Share calculated by each of the above methods is as follows.
Market share price average method:
DCF method:

1,811 yen to 1,912 yen
2,506 yen to 3,339 yen

According to the market share price average method, the scope of the value per Target Company Share is calculated
from 1,811 yen to 1,912 yen. The reference date is May 10, 2024, which is the business day immediately prior to theresolution of the board of directors of the Target Company regarding the Tender Offer. The calculation is based on
1,850 yen as the closing price on the reference date of the Target Company Shares in the Tokyo Stock Exchange
Prime Market, 1,811 yen as the simple average of the closing prices for the most recent one (1) month up to thereference date, 1,837 yen as the simple average of the closing prices for the most recent three (3) months up to thereference date, and 1,912 yen as the simple average of the closing price for the most recent six (6) months up to thereference date.
Under the DCF method, the value of shares per Target Company Share is calculated to be in the range of 2,506 yen
to 3,339 yen. The share value of the Target Company is calculated by discounting the free cash flow that the Target- 30-

Company is expected to generate in the future from the fiscal year ending March 31, 2025 based on revenue andinvestment plans in the Target Company’s business plan for the five (5) fiscal years from the fiscal year ending March
31, 2025 to the fiscal year ending March 31, 2029 (hereinafter referred to as the “Business Plan”; please note that
Mr. Mori is not involved at all in preparing the Business Plan) and information disclosed to the public, at an
appropriate discount rate that takes into account business risks. Weighted average cost of capital (Weighted Average
Cost of Capital: WACC) is used for the discount rate. The weighted average cost of capital is calculated by weighting
the cost of capital estimated using the capital asset pricing model (Capital Asset Pricing Model: CAPM) and the costof debt estimated using the expected funding rate after deduction of tax shields, by the equity composition ratio
estimated using the Target Company and comparable publicly traded companies’ information. The Company uses
8.5 % to 9.5 % as weighted average cost of capital. In addition, the perpetual growth rate method is used to calculate
the terminal value, and under the perpetual growth rate method the growth rate of 0.4 % to 1.4 % is used.
The financial forecast based on the business plan of the Target Company, which KPMG assumed in the calculationby the DCF method, is as follows.
The Business Plan includes a fiscal year in which we expect a significant increase in profits compared with theprevious fiscal year. Specifically, in the fiscal year ending March 31, 2025, the Target Company expects a significant
increase in operating income and free cash flow because some large orders in the SMO business, which were expectedin the fiscal year ending March 31, 2024, have been pushed back to the fiscal year ending March 31, 2025. In thefiscal year ending March 31, 2027, the Target Company plans to make large capital investments in manufacturing
facilities and other equipment in the drug discovery business, rather than only maintenance and renewal investments
in existing facilities until the fiscal year ending March 31, 2026, while from the fiscal year ending March 31, 2027
onward, the Target Company plans to make mainly maintenance and renewal investments in existing facilities, andthus expects a significant increase in free cash flow due to a decrease in capital expenditures. Therefore, the Target
Company expects a significant increase in free cash flow due to a decrease in capital expenditures. Furthermore, inthe fiscal year ending March 31, 2028, the Target Company expects a significant increase in operating income andfree cash flow due to the expansion of the pipeline with the completion of development and launch of new productsin the advanced medical business. The synergies expected to be realized from the consummation of the Transaction
are not included in the financial forecast because it is difficult to estimate them specifically at the present time.
(Millions of yen)
Item
FY03/2025
FY03/2026
FY03/2027
FY03/2028
FY03/2029
Revenue
20,76522,197
24,43627,282
29,042
Operating
2,669
3,429
3,598
5,254
6,208
IncomeEBITDA
3,903
4,700
4,923
6,579
7,533
Free Cash
1,093
1,234
2,511
3,885
4,801
Flow
② Procurement by the Target Company of Advice from an Independent Law Firm
In order to secure the fairness of the Transaction, including the Tender Offer, such as the fairness of the Tender Offer
Price, the Target Company has appointed a City-Yuwa Partners as a legal advisor independent of the Tender OfferRelated Parties and has received the necessary legal advice from such law firm on the decision-making method,
process, and other points of attention of the board of directors of the Target Company, including various procedures
concerning the Transaction. City-Yuwa Partners does not fall under the category of a related party of the Tender OfferRelated Parties, and does not have a material interest in the Tender Offer. In addition, the fees for the City-Yuwa
Partners will be calculated by multiplying the number of times worked by the fee per hour regardless of whether theTransaction is closed, and the contingent fee on the closing of the Transaction is not included. The Special Committee
confirmed at its first Special Committee meeting that the legal advisor appointed by the Target Company has no issue
of independence and expertise and that the Special Committee may receive expert advice from it as necessary.
③ The Target Company’s Establishment of an Independent Special Committee and Procurement of a Report fromsuch Special Committee(i) Background to the Establishment of the Special Committee- 31-

Since the Transaction, including the Tender Offer, falls under the so-called management buyout (MBO) and there are
structural conflicts of interest, in order to protect the general shareholders of the Target Company, as a part of measures
to secure fairness of the Transaction from the perspective of securing the fairness of the Tender Offer Price in theTransaction, eliminating arbitrariness in the process of decision making for the implementation of the Transaction andconflicts of interest, the board of directors decided on March 11, 2024, to establish the Special Committee consistingof four (4) members: Toyoji Maeda (outside director of the Target Company), Minako Kogoma (outside director of
the Target Company), Hidetsugu Sasaki (outside director and audit and supervisory committee member of the Target
Company), and Soshi Takahashi (outside director and audit and supervisory committee member), who are
independent of the Tender Offer-Related Parties and have high level of insights. The Target Company appointed these4 people as members of the Special Committee from the beginning, and there is no fact that it has changed themembers of the Special Committee. In addition, the Target Company, in accordance with the resolution of the boardof directors, sought advice from the Special Committee regarding: (a) the validity and reasonability of the purpose of
the Transaction (including whether the Transaction contributes to enhancing the enterprise value of the Target
Company); (b) the fairness and validity of the terms of the Transaction; (c) the fairness of the procedures relating to
the Transaction; (d) the merits of the board of directors to express their opinion of agreement to the Tender Offer andto recommend the Target Company shareholders to tender their shares in the Tender Offer; and (e) whether thedecision on the Transaction by the board of directors of the Target Company is disadvantageous to the minority
shareholders (hereinafter collectively referred to as the “Consulted Matters”) and requested the Special Committee
to submit a proposal on these points. In addition, the board of directors of the Target Company positions the Special
Committee as a council independent of the board of directors of the Target Company, and the board of directors of
the Target Company resolved that, in making decisions on the Transaction, the board of directors of the Target
Company shall respect the opinions of the Special Committee to the fullest extent possible, and if the Special
Committee determines that the Target Company’s board should not agree to the Tender Offer or should notrecommend the Targe Company’s shareholders to tender their shares, the board of directors of the Target Company
shall not express their opinion of agreement to the Tender Offer in accordance therewith in the former case, and shallnot recommend the Target Company's shareholders to tender their shares in the latter case. In addition, it is resolvedthat the Special Committee is entitled to: (i) negotiate with the proposer on the terms of transaction, etc. (including
indirect negotiations through the Target Company and its advisors) as necessary; (ii) appoint an advisor to the Special
Committee at the expense of the Target Company (including the authority of approving City-Yuwa Partners as theTarget Company’s legal advisor and KPMG as the Target Company’s financial advisor and the third-party valuation
institution, who have been ratified by the board of directors of the Target Company); and (iii) receive the information
required for the review and determination regarding the Transaction from the Target Company’s officers andemployees.
Fixed remuneration will be paid to each member of the Special Committee, and any remuneration contingent on theannouncement or conclusion of the Transaction is not included.
(ii) Background of the Special Committee's Deliberations
The Special Committee was held on a total of 8 occasions between March 14, 2024, and May 10, 2024, deliberations
and reviews were made on the Consulted Matters.
Specifically, on March 14, 2024, the Special Committee confirmed that KPMG as the financial advisor and the thirdparty valuation institution and City-Yuwa Partners as the legal advisor had no issues of independence from the Tender
Offer-Related Parties and expertise, and approved the appointment of each of them as an advisor of the Target
Company. In addition, the Special Committee confirmed that it would obtain expert advice from the advisors of theTarget Company as necessary, and it would not independently appoint its advisors. Furthermore, the Special
Committee has confirmed that there are no issues with the system for considering the Transaction, which wasestablished within the Target Company, from the viewpoint of independence, after receiving explanations from theTarget Company.
On that basis, the Special Committee received an explanation from City-Yuwa Partners on the background of theneed for the establishment of the Special Committee, the role of the Special Committee, etc., and the Special
Committee is considering measures to be taken to ensure the fairness of the procedures for the Transactions, basedon the legal advice on the decision-making process, methods, and other matters to be considered when making
decisions on the Transactions.
- 32-

In addition, the Special Committee checked the business environment and management issues of the Target Company
and the value and effectiveness of the Transaction and measures proposed by Mr. Mori and Blackstone in responseto these issues, and conducted question-and-answer sessions. In addition, the Special Committee collected andconsidered information and materials submitted by the Tender Offeror and the Target Company, and also interviewed
Mr. Mori and Blackstone with KPMG and City-Yuwa Partners after submitting written inquiries to Mr. Mori andBlackstone and receiving answers thereto. Through these discussions, the Special Committee received an explanationof the Target Company’s business environment, management issues, and awareness of these issues by Mr. Mori andBlackstone thereof, the details, background and significance of the Transaction, the details of the measures being
considered to be taken after the Transaction, the impact of the Transaction and those measures on the enterprise valueof the Target Company, the background and reasonableness of the decision-making process of the Tender Offeror andthe Target Company, and other matters related to the Transaction. At the same time, the Special Committee asked
questions and received answers regarding the purpose and background of the Transaction, the reason why the Target
Company considers it necessary to conduct the Transaction, the management system after the consummation of theTransaction, and the measures to be implemented, etc.
In addition, the Special Committee approved the business plan of the Target Company after confirming that thebusiness plan was prepared by persons who are independent of the Tender Offeror-Related Parties, receiving
explanations from the Target Company on important assumptions, and confirming the reasonableness of the contentsof the final business plan, important assumptions, and the process of preparation. Then, the Special Committee
received explanations from KPMG regarding the calculation of the Share Valuation Report on the Target Company
Shares and conducted a hearing survey on the assumptions for the calculation of the value.
After receiving a proposal from the Tender Offeror to set the Tender Offer Price at 2,400 yen per share on April 17,
2024, the Special Committee has been actively involved in the negotiation process with Mr. Mori and Blackstone
with respect to the discussions and negotiation between Mr, Mori, Blackstone and the Target Company regarding theterms and conditions of the Transaction by, for example, receiving reports from the Target Company on the progressand details of the negotiation and deliberating on the Tender Offer Price and communicating the negotiation policy to
the Target Company in light of the valuation results of the share value of the Target Company Shares, advice basedon the negotiation policy with the Tender Offeror, and the legal advice on measures to ensure the fairness of theprocedures in the Transaction from the City-Yuwa Partners.
Furthermore, the Special Committee confirmed that substantial information disclosure is expected to be made byreceiving explanations for multiple times from the City-Yuwa Partners on the drafts of the press release and thestatement of opinions pertaining to the Tender Offer, which are to be announced or submitted by the Target Company,
and the draft of the Tender Offer Registration Statement pertaining to the Tender Offer, which is to be announced or
submitted by the Target Company.
(iii) Determination by the Special Committee
As a result of careful discussions and deliberations on the Consultation Matters under the circumstances describedabove, the Special Committee unanimously agreed to submit the Report with the following details to the directors of
the Target Company on May 10, 2024.
(a) Content of the Report(i) The Special Committee believes that the Transaction will contribute to the enhancement of the Target
Company's enterprise value and that the purpose of the Transaction is justifiable and reasonable.
(ii) The Special Committee believes that the fairness and appropriateness of the terms and conditions of theTransaction, including the Tender Offer Price, are secured.
(iii) In the Transaction, including the Tender Offer, the Special Committee believes that the interests of theshareholders of the Target Company have been taken into consideration through fair procedures.
(iv) In light of (i) through (iii) above, the Special Committee believes it is reasonable for the Target Company's
board of directors to express its opinion in favor of the Tender Offer and to recommend that the shareholdersof the Target Company tender their shares in the Tender Offer.
- 33-

(v) In light of (i) through (iii) above, the Special Committee believes that it is not disadvantageous to the minority
shareholders of the Target Company for the board of directors of the Target Company to pass a resolution toexpress its opinion in favor of the Tender Offer and recommend the shareholders of the Target Company totender their shares in the Tender Offer. In addition, the Special Committee believes that the decision to carryout a share consolidation for the purpose of making the Target Company Shares go private, which isscheduled after the Tender Offer, will not be disadvantageous to the minority shareholders of the Target
Company.
(b) Reason for the Report
Based on the points (i) and (ii) below, the Special Committee came to the conclusion that the Transaction willcontribute to the enhancement of the Target Company's enterprise value and that the purpose of the Transaction,
including the Tender Offer, is reasonable.
(i) As stated in “ ① Background, purpose and decision-making process of the Tender Offer” and “ ②Background to the decision of the Target Company to support the Tender Offer and reasons therefor”
in “(2) Background, Purpose and Decision-Making Process of the Tender Offer, and Management Policy
After the Tender Offer” in “1. Purpose of the Purchase, etc.” above, the Target Company Group has businesschallenges such as improving profitability, raising funds, developing internal management systems, ensuring
operational quality, and securing human resources. The Target Company Group needs a competitive global
structure through various measures including overseas business expansion and discontinuous growth throughM&A in order to realize medium- to long-term improvement of corporate value. The purpose of theTransaction, is to develop the Target Company Group to a bigger health care service platform by promoting
management reforms utilizing Blackstone's knowledge and network, expanding the SMO business by
optimizing resource allocation and upgrading sales strategies, and expanding opportunities for CRO contracts
utilizing Blackstone's network, which the Target Company Group cannot achieve on its own. The Special
Committee believes that there is no unreasonable point in the business environment and management issues
surrounding the Target Company as recognized by the Target Company, and that the purpose of theTransaction is reasonable.
(ii) As stated in “ ① Background, purpose and decision-making process of the Tender Offer” and “ ②Background to the decision of the Target Company to support the Tender Offer and reasons therefor”
in “(2) Background, Purpose and Decision-Making Process of the Tender Offer, and Management Policy
After the Tender Offer” in “1. Purpose of the Purchase, etc.” above, the Target Company, Black Stone andMr. Mori have held several discussions between them concerning measures to enhance enterprise value, suchas support for the continued growth of the Target Company Group in connection with the Transaction, searchfor discontinuous growth opportunities through M&A and efforts to strengthen organizational capabilities.
The Special Committee received explanations from the director and vice president vice president of theTarget Company Masaaki Matsushima, the director and vice president of the Target Company Kiyoshi
Watanabe and the director of the Target Company Mr. Shuichi Kojima regarding the improvement inenterprise value that will be brought to the Target Company as a result of the Transaction, and the Special
Committee asked questions and received answers regarding the specific details, effects, feasibility, etc. of theTransaction to the above persons and the contents of such explanations were reasonable. Therefore, theSpecial Committee believes that the measures for enhancing the enterprise value of the Target Company thatare expected by Mr. Mori and Blackstone based on the discussions between them are reasonable in content
and the Special Committee believes that the Transaction will enhance the enterprise value of the Target
Company to a certain extent.
In addition, based on the points (i) through (iii) below, the Special Committee came to the conclusion that the fairness
and appropriateness of the terms of the Transaction, including the Tender Offer Price, are secured.
(i) The average market price method and the DCF method, which are the calculation methods used in the Share
Valuation Report, are considered to be general and reasonable methods in light of current practices, noarbitrariness was found in the selection of these methods, and in the DCF method, the calculation details arealso considered to be reasonable in light of current practices. The Target Company's business plan, which
was used as the basis for the calculation under the DCF method, was explained by the Target Company- 34-

regarding its contents and the process of its preparation, and no particular unreasonable points are found withregard to the purpose, procedure, and contents of its preparation. The Tender Offer Price is considered to be
at a reasonable premium to the market price, and the Tender Offer Price is reasonable because the Tender
Offer Price is above the upper limit of the result of the calculation by KPMG using the average market pricemethod and within the range of the result of the calculation using the DCF method.
(ii) Negotiations with Mr. Mori and Blackstone were conducted under the negotiation policy determined by theSpecial Committee and in accordance with its instructions, and such negotiations resulted in a price increaseof 16.7% (400 yen) (rounded to two decimal places) from the initial proposal.
(iii) There is no unreasonable point found in the method of the Transaction.
Based on the points (i) through (viii) below, the Special Committee came to the conclusion that sufficientconsideration has been given to the interests of minority shareholders of the Target Company through fair proceduresin the Transaction.
(i) The board of directors of the Target Company has established the Special Committee, which is independentof the Tender Offeror, the Tender Offeror’s Parent Company, Blackstone, and Mr. Mori.
(ii) The Target Company has received advice from City-Yuwa Partners, a legal advisor, and KPMG, a financial
advisor and third-party valuation institution, independent of the Tender Offeror, the Tender Offeror’s Parent
Company, Blackstone, and Mr. Mori,.
(iii) The Special Committee has received professional advice from the legal advisor and financial advisor andthird-party valuation institution appointed by the Target Company as they are independent and professional.
(iv) The Target Company has obtained the Share Valuation Report from KPMG.
(v) As Mr. Mori has structural conflict of interests with the Target regarding the Transaction, he did not participate
in any deliberation or resolution of the board of directors meeting regarding the Transaction as a special
interested party, nor did he participate in any discussion or negotiation of the Transaction in his capacity at
the Target Company.
(vi) A system has been established to prevent Mr. Mori, who may have a conflict of interest, from being involvedin the process of discussion and negotiation regarding the terms and conditions of the Transaction and theprocess of preparing the Target Company's business plan, which is the basis for the calculation of the valueof the Target Company Shares.
(vii) The Tender Offer Period is set longer (thirty (30) business days) than the minimum period required by law(twenty (20) business days), and the Target Company has not made any agreement with the Tender Offeror
to restrict the Target Company from contacting parties other than the Tender Offeror (opposing takeoverofferors) after the announcement of the Transaction, and it can be said that so-called indirect market checks
are being conducted.
(viii)The legality of the Squeeze-Out Procedures has been ensured, so as not to raise the issue of coercion in
relation to the Transaction.
④ Unanimous Approval by All of the Non-Interested Directors (including directors who are Audit & Supervisory
Committee members) of the Target Company
The Target Company carefully considered the terms and conditions of the Transaction, taking into account the Share
Valuation Report obtained from KPMG and the legal advice obtained from the City-Yuwa Partners, while fully
respecting the Report submitted by the Special Committee (see “③ The Target Company’s Establishment of an
Independent Special Committee and Procurement of a Report from such Special Committee” above).
As a result, as described in “② Background to the decision of the Target Company to support the Tender Offerand reasons therefor” in “(2) Background, Purpose and Decision-Making Process of the Tender Offer, and- 35-

Management Policy After the Tender Offer” in “1. Purpose of the Purchase, etc.” above, the Target Company resolved
by unanimous approval of all the directors (thirteen (13) directors, except for Mr. Mori, among fourteen (14) directors)
on the board of directors’ meeting on May 13, 2024 that the Transaction, including the Tender Offer, would contributeto increase in the enterprise value of the Target Company, that the terms and conditions of the Transaction, including
the Tender Offer Price, are appropriate in light of the valuation results in the Share Valuation Report, the level ofpremium of the Tender Offer Price, the process of negotiation with the Tender Offeror and the process of determining
the Tender Offer Price, and that the Target Company would express its opinion in favor of the Tender Offer andrecommend the shareholders of the Target Company to tender their shares in the Tender Offer.
Since Mr. Mori, the President and Representative Director of the Company, has a special interest in the Transaction
as he is the largest shareholder of the Target Company and the Reinvestment is planned and there is a possibility of aconflict of interest with the Target Company, Mr. Mori has not participated in any deliberations or resolutions in the
resolutions regarding the consideration of the Transaction, and he has not participated in any discussions or
negotiations with Blackstone as a role at the Target Company.
As stated above, the Tender Offeror intends to promptly implement the Tender Offer upon satisfaction (or waiver by
the Tender Offeror) of the Conditions Precedent. As of today, the Tender Offeror aims to commence the Tender Offeraround mid-June 2024. However, since it is difficult to accurately predict the time required for the review proceduresby the Australian authorities responsible for the Clearance process, the Tender Offeror will announce the detailed
schedule of the Tender Offer once it has been determined. In the event of any change in the expected timing of thecommencement of the Tender Offer, the Company will promptly announce such change.
For this reason, the Target Company's board of directors resolved in the above board of directors’ meeting that, at thetime of the commencement of the Tender Offer, it will request the Special Committee established at the Target
Company to examine whether or not there is any change in the Report which the Special Committee submitted to theTarget Company’s board of directors on May 10, 2024, and to inform the board of directors of the Target Company
to the effect that if there is no change and its revised opinion if there are any changes, and that, based on such opinion,
the Target Company's board of directors will express its opinion on the Tender Offer at the time the commencementof the Tender Offer.
⑤ Establishment by the Target Company of an Independent Examination Framework
In order to eliminate structural conflicts of interest, the Target Company has established a system within the Target
Company to examine, negotiate, and make decisions regarding the Transaction independently of the Tender OfferRelated Parties. Specifically, Mr. Mori has not participated in any deliberations or resolutions at the board of directors’
meeting regarding the Transaction because he has a structural conflict of interest with the Target Company inconnection with the Transaction and has not participated in any discussions or negotiations with the Tender OfferRelated Parties as having a role at the Target Company. The system for consideration, negotiation and determination
regarding the Transaction consists only of officers and employees who are independent of the Tender Offer-Related
Parties, and that such arrangement has continued up to date.
The business plan which is presented to the Tender Offeror and which is the basis of KPMG’s valuation of the valueof the Target Company Shares is prepared by a person who is independent of the Tender Offeror, and the details,
important assumptions, and the reasonableness of the process of preparation of the final business plan has been
confirmed by and approved by the Special Committee.
Furthermore, the system of examining the Transaction that is established within the Target Company, specifically thescopes and roles (including roles that require a high degree of independence, such as creation of a business plan thatserves as the basis for the valuation of the Target Company Shares) of the officers and employees who are involvedin the examination, negotiation, and determination of the Transaction, are based on the advice of the City-Yuwa
Partners, and it has been approved by the Special Committee that there are no issues of independence.
⑥ Securing Objective Conditions to Ensure the Fairness of the Tender Offer
The Tender Offeror sets the Tender Offer Period as thirty (30) business days, which is a generally accepted tender
offer period in the so-called management buyOut (MBO). Through this, the Target Company intends to secure
opportunities for the Target Company’s shareholders to make appropriate determination on tendering their shares in- 36-

the Tender Offer, and to secure opportunities for persons other than the Tender Offeror (hereinafter referred to as the“Competing Offerors”) to make competing tender offers and thereby secure the appropriateness of the Tender Offer
Price.
Neither the Tender Offeror nor the Target Company has entered into an agreement that restricts the Target Company's
contact with the Competing Offerors, such as an agreement containing a transaction protection clause that prohibits
the Target Company from contacting a Competing Offeror. In this way, securing the fairness of the Tender Offer has
been taken into account, by securing the opportunity for counter tender offers in conjunction with the establishmentof the Tender Offer Period.
③

Relationship with the Valuation Institution
Not applicable.

(5) Number of Shares, etc. to Be Purchased

Common Stock

Number of Shares to Be
Purchased
10,452,172 (shares)

Minimum Number of
Shares to Be Purchased
6,416,400 (shares)

Maximum Number of Shares
to Be Purchased- (shares)

Total

10,452,172 (shares)

6,416,400 (shares)-

Type of Shares, Etc.

(shares)(Note 1)In the event the total number of the Tendered Shares, Etc. is less than the minimum number ofshares to be purchased (6,416,400 shares), none of the Tendered Shares, Etc. will be purchased.
In the event the total number of the Tendered Shares, Etc. is not less than the minimum numberof shares to be purchased (6,416,400 shares), all of the Tendered Shares, Etc. will be purchased.

(Note 2)Since the maximum number of shares to be purchased is not set in this Tender Offer, the numberof shares to be purchased is stated as 10,452,172 shares, which is the maximum number of theTarget Company Shares to be purchased by the Tender Offeror in this Tender Offer. This
(10,452,172 shares) is the Total Number of Issued Shares After Deduction of Treasury Shares(12,107,372 shares) minus the number of Non-Tendered Agreed Shares (1,655,200 shares).

(Note 3)Fractional shares of less than one unit are also subject to this Tender Offer. In the event a
shareholder's right to demand purchase of fractional shares of less than one unit is exercised inaccordance with the Companies Act, the Target Company may purchase its own shares during
the Tender Offer Period in accordance with the procedures set forth in the laws and regulations.

(Note 4)

There is no plan to acquire the treasury shares owned by the Target Company through the Tender
Offer. In the event the total number of the Tendered Shares, Etc. is less than the minimum
number of shares to be purchased (6,416,400 shares), none of the Tendered Shares, Etc. will bepurchased. In the event the total number of the Tendered Shares, Etc. is not less than theminimum number of shares to be purchased (6,416,400 shares), all of the Tendered Shares, Etc.
will be purchased.

(Note 5)

“Number of Shares to Be Purchased” and “Minimum Number of Shares to Be Purchased” above areprovisional figures based on the information available as of today. The actual figures in the Tender
Offer may differ from the figures above due to changes in the number of treasury shares owned by theTarget Company, etc. after said date. The final “Number of Shares to Be Purchased” and “Minimum
Number of Shares to Be Purchased” will be determined prior to the commencement of the Tender
Offer, based on the latest information available as of the commencement of the Tender Offer.

(6) Changes in Ownership Ratio of Shares, etc. Due to Purchase, etc.

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Number of voting rights represented byshares, etc. owned by the Tendervoting rights
Offeror before the purchase, etc.

(Ownership ratio of shares, etc. before the purchase,etc.: -%)

Number of voting rights represented by47,794
shares, etc. owned by the specialvoting rights
related parties before the purchase, etc.

(Ownership ratio of shares, etc. before the purchase,etc.: 39.48%)

Number of voting rights represented by104,521
shares, etc. owned by the Tendervoting rights
Offeror after the purchase, etc.

(Ownership ratio of shares, etc. after the purchase,etc.: 86.33%)(Ownership ratio of shares, etc. after the purchase,etc.: 13.67%)

Number of voting rights represented byshares, etc. owned by the special16,552
voting rights
related parties after the purchase, etc.

Number of voting rights of all119,563
shareholders, etc. of the Targetvoting rights
Company(Note 1)
“Number of voting rights represented by shares, etc. owned by the Tender Offeror after thepurchase, etc.” refers to the number of voting rights represented by the number of shares to bepurchased in the Tender Offer (10,452,172 shares) as stated in “(5) Number of Shares, etc. to
be Purchased” above.
(Note 2)

“Number of voting rights of all shareholders, etc. of the Target Company” is the number ofvoting rights of all shareholders as of September 30, 2023, as described in the Target Company’s
Third Quarter Quarterly Report for the 27th fiscal year (the number of shares per unit was statedas 100 shares). However, since fractional shares of less than one unit are also subject to theTender Offer, the number of the voting rights (121,073 voting rights) represented by the numberof shares (12,107,372 shares) obtained by deducting the treasury shares owned by the Target
Company as of March 31, 2024 (230,993 shares) from the total number of issued shares as ofMarch 31, 2024 (12,338,365 shares) as described in the Target Company’s Financial Results isused as the denominator for the calculation of “Ownership ratio of shares, etc. before thepurchase, etc.” and “Ownership ratio of shares, etc. after the purchase, etc.”(Note 3)“Ownership ratio of shares, etc. before the purchase, etc.” and “Ownership ratio of shares, etc.
after the purchase, etc.” are rounded to two decimal places.

(7) Aggregate Tender Offer Price
29,266,081,600 yen (planned)(Note)The “Aggregate Tender Offer Price” indicated above is the amount calculated by multiplying
the number of shares to be purchased stated in “(5) Number of Shares, etc. to be Purchased” above(10,452,172 shares) by the tender offer price per share (2,800 yen). If the final number of shares
to be purchased and minimum number of shares to be purchased are determined, the “Aggregate
Tender Offer Price” may be subject to change.

(8) Other Conditions and Methods for Purchase, etc.
①

Other Conditions and Methods for Purchase, etc.

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The settlement method, the date of public notice of the Tender Offer, and other conditions and methods for purchase,
etc. will be announced once decided. Daiwa Securities will be appointed as the tender offer agent.
②

Whether there are conditions set forth in each item of Article 27-13, Paragraph 4 of the Act, and the details
thereofIf the total number of the Tendered Shares, Etc. is less than the minimum number of shares to be purchased (6,416,400
shares), none of the Tendered Shares, Etc. will be purchased. In the event the total number of the Tendered
Shares, Etc. is not less than the minimum number of shares to be purchased (6,416,400 shares), all of theTendered Shares, Etc. will be purchased.
3. Management Policy, etc. After the Tender Offer and the Future Prospects
For the management policy, etc. after the Tender Offer and the future prospects, please refer to “(2) Background, Purpose
and Decision-Making Process of the Tender Offer, and Management Policy After the Tender Offer” and “(5)Likelihood of Delisting and the Grounds therefor” of “1. Purpose of the Purchase, etc.” above.
The potential effects of the Tender Offer on the business forecasts for the current fiscal year of the Target Company are
currently being analyzed. If it becomes necessary to amend the business forecasts or if any event which should be publicly
announced occurs going forward, we will promptly disclose it.
4. Other Information(1) Agreements between Tender Offeror and Target Company or its Officers, and Details Thereof①

Consent to the Tender Offer

According to the Notice by the Target Company, the Target Company resolved at its board of directors’ meetingon May 13, 2024, in the opinion of the Target Company as of the same date, if the Tender Offer is commenced,
to express the opinion in favor of the Tender Offer and recommend its shareholders to apply for the Tender
Offer.
For details on the decision-making process of the Target Company, please refer to the Notice by Target Company andthe section titled “④ Unanimous Approval by All of the Non-Interested Directors (including directors who are Audit& Supervisory Committee members) of the Target Company” in “(Measures to Secure the Fairness of the Tender
Offer, Such as Measures to Secure the Fairness of the Price of Tender Offer, etc. and Measures to Avoid Conflicts ofInterest)” under “② Background of Calculation” of “(4) Basis of Calculation of the Tender Offer Price, Etc.” in “2.
Outline of Tender Offer” above.
②

The Tender Offer Agreement and the Shareholders Agreement

The Tender Offeror, the Tender Offeror’s Parent Company and BX Fund entered into the Tender Offer
Agreement with Mr. Mori and Mr. Mori’s Asset Management Company as of May 13, 2024, in which theyagreed (i) that Mr. Mori will tender his shares in the Tender Offer in relation to the Tendered Agreed Shares(3,124,250 shares, ownership ratio: 25.80%), (ii) that Mr. Mori shall not tender his shares the Tender Offer
for any of the Non-Tendered Agreed Shares (1,655,200 shares, ownership ratio: 13.67%), (iii) that Mr. Mori
will endeavor to have Ms. Rie Mori (825,000 shares, ownership ratio: 6.81%) and Mr. Ryusuke Mori (75,000
shares, ownership ratio: 0.62%), who are relatives of Mr. Mori, tender their shares in the Tender Offer, (iv)that the security interest that has been established on the Non-Tendered Agreed Shares shall be released, and(v) that the Squeeze-Out Procedures, the Share Transfer and the Reinvestment shall be implemented.
In addition, BX Fund entered into the Shareholders Agreement with Mr. Mori and Mr. Mori’s AssetManagement Company as of May 13, 2024 concerning the Merger, management of the Tender Offeror’s
Parent Company, the Tender Offeror and the Target Company after the Transaction and the handling of theTender Offeror’s Parent Company Shares.

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For details of each agreement, please refer to “(6) Material Agreements Related to the Tender Offer” in “1.
Purpose of the Purchase, etc.” above.
(2) Other Information Deemed Necessary for the Investors in Deciding Whether to Tender in the Tender①

Announcement of “Summary of Consolidated Financial Results for the Fiscal Year Ended March 31,
2024 (Based on Japanese GAAP)”On May 13, 2024, the Target Company announced the “Summary of Consolidated Financial Results for the
Fiscal Year Ended March 31, 2024 (Based on Japanese GAAP).” For more information, please refer to suchannouncement.
②

Announcement of “Notice of Differences Between Business Forecasts for the Fiscal Year Ending March
31, 2024 and Actual Results”

On May 13, 2024, the Target Company announced the “Notice of Differences Between Business Forecasts
for the Fiscal Year Ending March 31, 2024 and Actual Results.” For more information, please refer to suchannouncement.
③

Announcement of “Notice of the Revision of Year-end Dividend Forecast for Surplus for the Fiscal YearEnding March 31, 2024 (No Dividend)”

The Target Company resolved at its board of directors’ meeting on May 13, 2024 to revise the dividend
forecast for the fiscal year ending March 31, 2024 and not to distribute year-end dividends for the fiscal year
ending March 31, 2024. For more information, please refer to the “Notice of the Revision of Year-end
Dividend Forecast for Surplus for the Fiscal Year Ending March 31, 2024 (No Dividend)” announced by theTarget Company.
END

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-

【Restrictions on Solicitation】
This press release is a press release to announce the Tender Offer to the public and has not been prepared for the purpose of soliciting sales.
When applying for the offer to sell, please make sure to read the Tender Offer Explanatory Statement regarding the Tender Offer and apply forthe offer at your own discretion. This press release does not constitute or form part of any offer or invitation to sell or solicitation of any offer tobuy any securities, nor shall this press release (or any part thereof) or the fact of its distribution form the basis of any agreement relating to theTender Offer, nor may it be relied upon in entering into any such agreement.

【U.S. Regulations】
・The Tender Offer is for the acquisition of the Target Company Shares. The Tender Offer will be conducted in accordance with the procedures
and information disclosure standards prescribed by the Financial Instruments and Exchange Act of Japan, which may differ from the procedures
and information disclosure standards in the United States. In particular, Section 13(e) and Section 14(d) of the U.S. Securities Exchange Act of1934 (as amended, the same applies hereunder) and the rules prescribed thereunder do not apply to the Tender Offer, and the Tender Offer does
not conform to those procedures and standards. The financial information included in this press release was prepared based on the Japanese
Accounting Standards, which may differ significantly from those of other countries, including the United States. As the Tender Offeror and theTarget Company are incorporated outside of the United States, and all or some of its executives are not residents of the United States, it may bechallenging to exercise rights or requests based on securities-related laws of the United States. Also, courts of the United States may be unable
to take legal action against entities incorporated outside of the United States or their executives based on violation of securities-related laws of
the United States. Furthermore, entities incorporated outside of the United States, their subsidiaries and affiliates and their executives may falloutside of the jurisdiction of the courts of the United States.
・The financial advisors to the Tender Offeror and the Target Company, as well as the tender offer agent (including their related parties) may
engage in purchases of Target Shares, not through the Tender Offer, for their own account or for their customers’ accounts or may engage inacts for such purchases to the extent undertaken in the ordinary course of their businesses and to the extent permitted under the Financial
Instruments and Exchange Act of Japan and other applicable laws and regulations, in accordance with the requirements of Rule 14e-5(b) of the
U.S. Securities Exchange Act of 1934, during the Tender Offer Period. Such purchases may be conducted at a market price through a market
transaction, or at a price determined through negotiations off-market. In the event that information regarding such purchases is disclosed inJapan, such information will also be disclosed on the English website of the financial advisor, the Target Company, or the tender offer agent
conducting such purchases, or will otherwise be made publicly available.
・Unless otherwise specified, all procedures relating to the Tender Offer are to be conducted entirely in Japanese. All or a part of the
documentation relating to the Tender Offer will be prepared in the English language; however, if there is any inconsistency between the Englishlanguage documentation and the Japanese-language documentation, the Japanese-language documentation will prevail.
・This press release includes statements that fall under “forward-looking statements” as defined in Section 27A of the U.S. Securities Act of1933 (as amended) and Section 21E of the U.S. Securities Exchange Act of 1934. Due to known and unknown risks and uncertainties, actual- 41 -

results may differ significantly from the statements that are implicitly or explicitly forward-looking. The Tender Offeror and its affiliates do notguarantee for such implicit and explicit forward-looking statements to materialize. The “forward-looking statements” in this press release wereprepared based on information obtained by the Tender Offeror as of the date hereof, and unless required by law, the Tender Offeror and its
affiliates are not obligated to amend or revise such forward-looking statements.
・In the event a shareholder’s right to demand the purchase of fractional shares of less than one unit is exercised in accordance with theCompanies Act , the Target Company may purchase its treasury shares during the Tender Offer Period in accordance with the procedures set
forth in the laws and regulations.

【Other Countries】
Certain countries or regions may impose legal restrictions on the announcement, publication or distribution of this press release. In such cases,
please be aware of and comply with those restrictions. This shall not constitute a solicitation of an offer to purchase or an offer to sell shares inconnection with the Tender Offer, and shall be deemed to be merely the distribution of materials as information.

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