PHC Holdings Corporation (PHCHD) Completes Stock Exchange with Life Science Institute, Inc. (LSII) as Part of their Strategic Capital Alliance Agreement -PHCHD Has Acquired All Shares of LSI Medience Corporation and LSII Has Received a Proportion of Shares of PHCHD

August 1, 2019
PHC Holdings Corporation

TOKYO, August 1, 2019 - PHC Holdings Corporation (headquarters: Tokyo, Japan, hereafter PHCHD) today announced the completion of the planned stock exchange with Life Science Institute, Inc. (headquarters: Tokyo, Japan, hereafter LSII), a subsidiary of Mitsubishi Chemical Holdings Corporation, that was part of their previously announced agreement to enter into a Strategic Capital Alliance. As a result of this transaction, PHCHD has acquired all shares of LSI Medience Corporation (headquarters: Tokyo, Japan, hereafter LSIM), a wholly owned subsidiary of LSII, and LSII has received a proportion of the shares of PHCHD.

With its strength in testing and analytical technologies, LSIM is one of the leading comprehensive healthcare service companies in Japan and operates across three core businesses: clinical testing, diagnostic reagents and instruments, and drug development support services. After becoming a wholly owned subsidiary of PHCHD, LSIM will continue to run its business as a stand-alone company, operating primarily in Japan.

PHCHD offers value-added products and services across diabetes care, diagnostics, life sciences, and healthcare IT. On June 29, it announced the completion of the acquisition of the anatomical pathology business (the new company name: Epredia) from Thermo Fisher Scientific, designed to strengthen its global diagnostics business. By maximizing synergies with LSIM as part of the PHC Group, PHCHD aims to further strengthen its healthcare services business in Japan. This will enable PHC Group to enter high growth segments of the market with LSIM’s domestic oncology and genetic testing services, and create a more comprehensive healthcare services business in Japan, together with its healthcare IT business.

Michael Kloss, President and CEO of PHCHD, explained, “We are pleased to complete the stock exchange with LSII and add LSIM, the third biggest player in the domestic clinical testing industry, to our group. We are also delighted to have LSII join as a new shareholder of PHCHD. Adding LSIM as a wholly owned subsidiary of PHCHD is a very important step to help our group achieve further growth in the future. We see significant potential for growth in all the LSIM business areas. Due to the rising aging population in Japan, the clinical testing market is expected to increase steadily, especially in the areas of oncology testing and lifestyle-related diseases. The genetic testing field is also forecasted to grow significantly following recent technological innovations. We believe that this deal will provide various opportunities for synergies with our existing businesses, such as utilizing mutual customer bases and creating further innovation by bringing together the technologies and expertise of both companies.

Haruo Watanabe, President of LSIM, commented, “We are excited to join the PHC Group and continue to serve the healthcare services business, focused on the domestic clinical testing industry. We are confident that we will be able to drive further innovation and provide higher quality equipment and services that meet the needs of our customers more effectively with the support and expertise of the PHC Group. We believe we can further develop our highly reputable business in Japan and expand it globally.”

Michael added, “Following the acquisition of Epredia from Thermo Fisher Scientific, the addition of LSIM as a wholly owned subsidiary of PHCHD is another exciting step forward for PHC Group as we continue to build a leading global healthcare company that can have a positive impact on the health of society and improve the lives of people.”

In addition, PHCHD has bought back 14,230,617 of its own shares from Kohlberg Kravis Roberts (including its affiliated companies and organizations except for PHCHD, hereafter KKR) and Panasonic Corporation, and canceled them. The purchase amount accounts for 13.7% of the total number of issued shares. With this successful closing, KKR now owns approximately 52.0% of PHCHD shares, Mitsui 22.0%, LSII 13.7%, and Panasonic Corporation 12.3%.

About PHC Holdings Corporation

Incorporated in 2014, PHC Holdings Corporation is a global healthcare company with its subsidiaries including PHC Corporation and Ascensia Diabetes Care Holdings AG. Committed to its corporate mission, “We contribute to the wellbeing of society through our diligent efforts by creating new value propositions for all the people who wish for better health,” the company develops, manufactures, sells and services medical equipment and solutions across diabetes care, diagnostics, life sciences and healthcare IT. PHC Holdings Corporation group’s consolidated net sales in FY2018 was 186.8 billion yen with global distribution of products and services for more than 125 countries.
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About Life Science Institute, Inc.

Founded in 2014, Life Science Institute, Inc. promotes business in three healthcare domains: health and medical ICT business, next generation healthcare, and drug discovery solutions. By offering diverse solutions to people hoping for good health, such as a solution to meet patients’ unmet medical needs, it aims to realize KAITEKI society in which people can lead healthy and comfortable lives. The consolidated net sales of Life Science Institute, Inc. in FY2018 131.8 billion yen.
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About LSI Medience Corporation

Founded in 1975, LSI Medience Corporation is engaged in clinical testing, diagnostics reagents and instruments, and drug development support service as its three core businesses. By utilizing its power of analysis developed in various testing fields in its long history as a core competence and analytical abilities on test results, LSI Medience Corporation aims to create new solutions. Contributing to prevention and early detection of diseases and medical care, it also actively supports next-generation healthcare including personalized medicine. LSI Medience is one of the comprehensive leading comprehensive healthcare service companies in Japan with 88.7 billion yen net sales in FY2018 and approximately 3,500 employees consolidated.
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