Announcement Execution of Memorandum of Understanding for Share Acquisition (Subsidiarization)
03 April 2024 - 2:23PM
MEDIROM Healthcare Technologies Inc. (“we”, “our” or “us”)
hereby announces that we resolved, at a meeting of our Board of
Directors held on March 29, 2024, to enter into a Memorandum of
Understanding (the “MOU”) for the purpose of acquiring all of the
shares of stock of Japan Gene Medicine Corporation (the “Target
Company”) and making it our subsidiary, and commencing the
processes and negotiations necessary to enter into the definitive
agreement for the transaction. The MOU was executed on April 2,
2024. Under the MOU we and the seller agree to negotiate in good
faith for the purpose of entering into the definitive agreement for
the acquisition by May 31, 2024, described in more detail below
under “2. Outline of Transaction Proposed in the MOU”.
- Purpose of
Share AcquisitionIn addition to our relaxation salon business
providing health management services with our iconic brand,
“Re.Ra.Ku®︎”, our group is committed to the healthtech business,
which is represented by our on-demand training application “Lav®︎”
that provides specific health guidance, our development and
manufacturing of the world’s first smart tracker bracelet that does
not require charging, “MOTHER Bracelet®”, and our deployment of our
device-based monitoring system, “REMONY”. We are also actively
expanding into new areas.The Target Company is a company engaged in
a prenatal diagnosis business providing genetic testing and
analysis services. By understanding the condition of the fetus and
the presence of any diseases or disorders before birth, it is
possible for medical professionals to consider the most appropriate
method of delivery and therapeutic education tailored to the
condition of the fetus. The target age group for these services is
women in their 20s to 40s, which matches the main users of our
group brand, “Re.Ra.Ku®︎”. We believe that business synergies will
be generated as we aim to improve the value of the customer
experience.This acquisition is in line with our ongoing strategy of
obtaining assets which can contribute to expanding our presence in
Japan. Through this acquisition, we will further aim to realize our
vision of becoming a “healthcare general trading company that can
provide comprehensive services from prevention to treatment” and to
enhance the corporate value of our group.
2. Outline of Transaction
Proposed in the MOU(1)
Target Company |
Name of Company: Japan Gene Medicine CorporationHead office: 15-9
Ichibancho, Chiyoda-ku, TokyoIncorporation date: December 17,
2019Registered paid-in capital: 5,000,000 yenTotal number of shares
issued: 500 shares of common stockHowever, the scope of the Target
Company is subject to change due to the existence of related party
transactions or other factors discovered as a result of due
diligence, etc. Also, at our request, any related party
transactions will need to be reviewed and reconciled to centralize
in the Target Company substantially all economic value generated by
the testing business which is the basis, as we recognize, of the
price stated below. Detailed terms and conditions will be agreed
and provided for in the definitive agreement. |
Proposed Price |
Total price of 2,400,000,000 yenHowever, the price is subject to
change after due diligence. The price will be determined by
reference to the amount of the Target Company’s adjusted EBITDA in
the testing business calculated through due diligence multiplied by
five (5), and the detailed terms and conditions will be set forth
in the definitive agreement. |
Method of Transaction |
Making the Target Company our subsidiary by purchase of shares
(cash settlement), share exchange (kabushiki koukan) or other
methods, or a combination thereof.Details will be agreed and
provided for in the definitive agreement. |
Fundraising Method |
Cash on hand and loan(s) |
Scheduled Execution Date of Definitive Agreement(2) |
May 31, 2024 |
Scheduled Closing Date(2) |
June 30, 2024 |
Due Diligence |
We expect to start due diligence upon the execution of the
MOU. |
Other Conditions |
The execution and of the definitive agreement and closing of the
transaction by us are conditioned on and subject to the following:-
Receipt of a written instrument (commitment letter) from a
financial institution that agrees to provide a loan in an amount
and on terms and conditions satisfactory to us.- The business of
the Target Company will continue after the contemplated transaction
as it was at the time of execution of the MOU.- It is ensured that
related party transactions of the Target Company have been resolved
to our satisfaction.- During the due diligence process, it has been
confirmed that there are no issues discovered such as connections
or transactions with anti-social forces that could preclude this
transaction.- It is agreed that matters confirmed during the due
diligence process will be reflected in the conditions precedent,
representations, warranties, and other appropriate provisions in
the definitive agreement to our satisfaction.- The procedures
required under the Foreign Exchange and Foreign Trade Act are
completed.- It is possible for us to meet any applicable disclosure
requirements for financial information of the Target Company
required under applicable U.S. securities laws, rules, and
regulations by the applicable deadlines.- Other general conditions
precedent, representations and warranties, covenants, and
indemnification clauses are set forth in the definitive
agreement. |
(1) This outline sets forth proposed non-binding terms and
conditions in the MOU for the acquisition and for entry into the
definitive agreement.(2) This proposed schedule assumes the timely
satisfaction of the conditions to entering into the definitive
agreement and the conditions to closing.
3. Schedule
The following is the proposed schedule for the
transaction set forth in the MOU. This schedule assumes the timely
satisfaction of the conditions to entering into the definitive
agreement and the conditions to closing.
(1) Date of execution of the MOU |
April 2, 2024 |
(2) Date of execution of the definitive agreement |
May 31, 2024 |
(3) Date of closing |
June 30, 2024 |
Forward-Looking Statements
Certain statements in this press release are
forward-looking statements for purposes of the safe harbor
provisions under the U.S. Private Securities Litigation Reform Act
of 1995. Forward-looking statements may include estimates or
expectations about the Company’s possible or assumed operational
results, financial condition, business strategies and plans, market
opportunities, competitive position, industry environment, and
potential growth opportunities. In some cases, forward-looking
statements can be identified by terms such as “may,” “will,”
“should,” “design,” “target,” “aim,” “hope,” “expect,” “could,”
“intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,”
“predict,” “project,” “potential,” “goal,” or other words that
convey the uncertainty of future events or outcomes. These
statements relate to future events or to the Company’s future
financial performance, and involve known and unknown risks,
uncertainties and other factors that may cause the Company’s actual
results, levels of activity, performance, or achievements to be
different from any future results, levels of activity, performance
or achievements expressed or implied by these forward-looking
statements. You should not place undue reliance on forward-looking
statements because they involve known and unknown risks,
uncertainties and other factors which are, in some cases, beyond
the Company’s control and which could, and likely will, affect
actual results, levels of activity, performance or achievements.
Any forward-looking statement reflects the Company’s current views
with respect to future events and is subject to these and other
risks, uncertainties and assumptions relating to the Company’s
operations, results of operations, growth strategy and liquidity.
Some of the factors that could cause actual results to differ
materially from those expressed or implied by the forward-looking
statements in this press release include:
- the Company’s ability to obtain the necessary financing to
complete the contemplated acquisition transaction on acceptable
terms;
- the Company’s satisfactory completion of due diligence;
- the satisfaction of the conditions to entering into the
definitive agreement for the acquisition and, if the definitive
agreement is entered into, the satisfaction of the conditions in
such agreement to close the acquisition;
- the Company’s ability to realize the anticipated benefits of
the transaction;
- the Company’s ability to successfully integrate the acquired
business;
- the Company’s ability to obtain necessary regulatory
approvals;
- potentially significant transaction costs and unknown
liabilities;
- the Company’s ability to achieve its development goals for its
business and execute and evolve its growth strategies, priorities
and initiatives;
- changes in Japanese and global economic conditions and
financial markets, including their effects on the Company’s
expansion in Japan and certain overseas markets;
- the Company’s ability to achieve and sustain profitability in
its Digital Preventative Healthcare Segment;
- the Company’s ability to maintain and enhance the value of its
brands and to enforce and maintain its trademarks and protect its
other intellectual property;
- the Company’s ability to raise additional capital on acceptable
terms or at all;
- the Company’s level of indebtedness and potential restrictions
on the Company under the Company’s debt instruments;
- changes in consumer preferences and the Company’s competitive
environment;
- the Company’s ability to respond to natural disasters, such as
earthquakes and tsunamis, and to global pandemics, such as
COVID-19; and
- the regulatory environment in which the Company operates.
More information on these risks and other
potential factors that could affect the Company’s business,
reputation, results of operations, financial condition, and stock
price is included in the Company’s filings with the Securities and
Exchange Commission (the “SEC”), including in the “Risk Factors”
and “Operating and Financial Review and Prospects” sections of the
Company’s most recently filed periodic report on Form 20-F and
subsequent filings, which are available on the SEC website at
www.sec.gov. The Company assumes no obligation to update or revise
these forward-looking statements for any reason, or to update the
reasons actual results could differ from those anticipated in these
forward-looking statements, even if new information becomes
available in the future.
About MEDIROM Healthcare Technologies Inc.
MEDIROM, a holistic healthcare company, operates
311 (as of February 29, 2024) relaxation salons across Japan,
Re.Ra.Ku® being its leading brand, and provides healthcare
services. In 2015, MEDIROM entered the health tech business and
launched new healthcare programs using an on-demand training app
called “Lav®”, which is developed by the Company. MEDIROM also
entered the device business in 2020 and has developed a smart
tracker “MOTHER Bracelet®”. In 2023, MEDIROM launched REMONY, a
remote monitoring system for corporate clients, and has received
orders from a broad range of industries, including nursing care,
transportation, construction, and manufacturing, among others.
MEDIROM hopes that its diverse health-related product and service
offerings will help it collect and manage healthcare data from
users and customers and enable it to become a leader in big data in
the healthcare industry. For more information, visit
https://medirom.co.jp/en.
Contacts
Investor Relations Team
ir@medirom.co.jp
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