Notice of Absorption-Type Merger (Simplified Merger and Short Form Merger) of Wholly-Owned Subsidiaries

• IR

　SMS Co., Ltd. (the “Company”) hereby announces that, on October 1, 2020, its Board of Directors has resolved to merge its wholly-owned subsidiaries, SMS Career Co., Ltd. (“SMSC”), Zweig Co., Ltd. (“Zweig”), and WorkAmbitious Co., Ltd. (“WorkAmbitious”) into the Company through an absorption-type merger (the ”Merger”), effective as of January 1, 2021. Please note that the disclosed items and details are partially omitted because the Merger is a simplified merger of the Company’s wholly-owned subsidiaries.

１．Purpose of the Merger

　With the Group mission of “We aim to improve the quality of life by providing information infrastructure for aging society,” the Company provides more than 40 services in Elderly Care, Medical Care, Healthcare, and Senior Life domains in Japan and abroad, including career business like recruiting agent, management support platform for elderly care operators (Kaipoke) and drug information service in Asia-Oceania.
　Since its establishment, the Company marked rises in sales and profits for 16 consecutive years. To achieve the Group mission, however, we need to continue to grow the existing businesses and develop new businesses for further business expansion.
　In advancing the above strategy, the Company believes that it is important to further promote synergies among businesses within the SMS Group, while strengthening its business foundation and pursuing greater efficiency by consolidating management resources. Therefore, the Company decided on the Merger of three subsidiaries (SMSC, Zweig, and WorkAmbitious) that provide career-related services in the Elderly Care and Medical Care domains, into the Company.

２．Summary of the Merger

（１） Timeline
Merger resolution by the Board of Directors: October 1, 2020
Date of the Merger agreement: October 1, 2020
Date of the Merger (the effective date): January 1, 2021 (planned)

(Note 1) According to simplified merger rules in Company Law article 796 clause 2, the Company is proceeding with the Merger without receiving approval at the General Shareholders Meeting.
(Note 2) According to short form merger rules in Company Law article 784 clause 1, SMSC, Zweig, and WorkAmbitious are proceeding with the Merger without receiving approval at the General Shareholders Meeting of each company.

（２） Merger method
The Company will be the surviving company under absorption-type merger. SMSC, Zweig, and WorkAmbitious will be dissolved.

（３） Details of allotment related to the Merger
Since this will be a merger of wholly-owned subsidiaries, there will be no issuance of new shares, no increase in shareholders’ equity, and no payment for the Merger.

（４） Treatment of stock acquisition rights and bonds with stock acquisition rights of the absorbed companies
Not applicable.

３．Overview of the companies involved in the Merger

（１） Surviving company (as of March 31, 2020)

（２） Dissolving companies (as of March 31, 2020)

４．Post-merger details

The Merger will cause no change in the name or address of the Company, the title, position or name of its representative, or its main business, capital or fiscal year-end.

５．Impact on business performance

The Merger is a merger between the Company and its consolidated subsidiaries and therefore it will not affect the Company’s consolidated earnings.

(Reference) Consolidated earnings forecast for the current fiscal year (announced on April 30, 2020) and actual results for the previous fiscal year

(million yen)

Notice of Absorption-Type Merger (Simplified Merger and Short Form Merger) of Wholly-Owned Subsidiaries