Srs Holdings Co.,Ltd. (TSE:8163) signed a basic agreement to acquire Kazokutei Co., Ltd. and Sunrolly Co., Ltd. from H2O Retailing Corporation (TSE:8242) and H2O Foods Co., Ltd. on November 8, 2019. Srs Holdings Co.,Ltd. entered into an share exchange agreement to acquire Kazokutei Co., Ltd. and Sunrolly Co., Ltd. from H2O Retailing Corporation and H2O Foods Co., Ltd. on November 26, 2019. The transaction will be conducted through a share exchange with the share exchange ratio to be determined in after discussion based on the results of due diligence and the results of calculations by a third-party appraiser.

As of December 26, 2019, Srs Holdings Co.,Ltd will issue total 1.5 million shares. H2O Foods Co., Ltd. will sell Sunrolly Co., Ltd. while H2O Retailing Corporation will sell Kazokutei Co., Ltd. Pursuant to the transaction, Kazokutei Co., Ltd. and Sunrolly Co., Ltd. will become wholly-owned subsidiaries of SRS Holdings Co., Ltd. For the year ended March 31, 2019, Kazokutei Co., Ltd. reported net assets of ¥809 million, total assets of ¥4,914 million, sales of ¥8,778 million, operating income of ¥100 million and net income of ¥21 million and Sunrolly Co., Ltd. reported net assets of ¥569 million, total assets of ¥808 million, sales of ¥2,535 million, operating income of ¥2 million and net loss of ¥5 million. The transaction is subject to approval by shareholders of Srs Holdings Co.,Ltd and was approved by the board of Srs Holdings Co.,Ltd. on November 26, 2019.

The transaction is expected to be completed on January 1, 2020. As of December 26, 2019, the transaction is expected to be completed on February 1, 2020. As of February 1, 2020, Srs Holdings acquired Sunrolly Co., Ltd. Duff & Phelps LLC acted as third party in order to ensure fairness and validity in calculating the share exchange ratio for Srs Holdings Co.,Ltd. Mercury General LPC & Partners acted as legal advisor to Srs Holdings Co.,Ltd.