キトー（6409） – Announcement Regarding Planned Commencement of the Tender Offer for the Share Certificates, Etc. of Kito Corporation (Securities Code: 6409) by Liftin

To whom it may concern: May 16, 2022 Company Name: Representative: Code Number: Inquiries: KITO CORPORATION Yoshio Kito, Representative Director and President 6409 (Tokyo Stock Exchange Prime Market) Masafumi Kokubo, Executive Officer GM, Corporate Planning Division TEL: 03‐5908‐0161 Announcement Regarding Planned Commencement of the Tender Offer for the Share Certificates, Etc. of KITO CORPORATION (Securities Code: 6409) by Lifting Holdings BidCo, Inc. This is to announce that Lifting Holdings BidCo, Inc. released the “Announcement Regarding Planned Commencement of the Tender Offer for the Share Certificates, Etc. of KITO CORPORATION (Securities Code: 6409)” attached hereto today. The purpose of this document is to, in accordance with Article 30, Paragraph 1, Item 4 of the Order for Enforcement of the Financial Instruments and Exchange Act, make an announcement based on a request that Lifting Holdings BidCo, Inc. (the tender offeror) made to KITO CORPORATION (the target company of the tender offer). (Attachment) “Announcement Regarding Planned Commencement of the Tender Offer for the Share Certificates, Etc. of KITO CORPORATION (Securities Code: 6409)” as of May 16, 2022. End [Translation] May 16, 2022 Company Name: Representative: Lifting Holdings BidCo, Inc. Robert Desel, Representative Director Announcement Regarding Planned Commencement of the Tender Offer for the Share Certificates, Etc. of KITO CORPORATION (Securities Code: 6409) Lifting Holdings BidCo, Inc. (“Offeror”) hereby announces that, on May 16, 2022, it decided to acquire the share certificates, etc. of KITO CORPORATION (Securities Code: 6409, Prime Market of the Tokyo Stock Exchange, Inc. (the “Tokyo Stock Exchange”); the “Target Company”) through a tender offer (the “Tender Offer”) under the Financial Instruments and Exchange Act (Act No. 25 of 1948, as amended) (the “Act”). Because the procedures and steps required under competition laws in Japan, the U.S., China, Austria, Cyprus and Serbia are expected to take time to complete, the Offeror plans to promptly commence the Tender Offer on the date that is (i) within 10 business days after the Tender Offer Conditions Precedent (Note 1), including the completion of such procedures and steps, are satisfied (or waived by the agreement of Lifting Holdings Limited, which is the parent company holding all of the issued and outstanding shares of the Offeror (“HoldCo”), Crosby US Acquisition Corp., which is a wholly owned subsidiary of HoldCo (“Crosby US”), Crosby UK Acquisition Limited, which is a wholly owned subsidiary of HoldCo (“Crosby UK”, and HoldCo and its subsidiaries, including Crosby US, Crosby UK and The Crosby Group LLC (“Crosby”), established under the laws of Delaware whose shares are indirectly wholly owned by HoldCo through Crosby US’s wholly-owned subsidiaries (collectively, “Crosby US Other Wholly-owned Sub”), collectively “Crosby Group”) and the Target Company) and (ii) separately agreed among HoldCo, Crosby US, Crosby UK and the Target Company (the “Tender Offer Commencement Date”). As of today, the Offeror aims to complete procedures with domestic and foreign regulatory authorities on or around mid October 2022 and commence the Tender Offer on or around late October 2022, but it is difficult to accurately estimate the amount of time required for those procedures, etc. as they involve domestic and foreign regulatory authorities. Given that fact, the detailed schedule for the Tender Offer will be promptly announced once we have obtained all regulatory clearances. Any changes to the expected timing of the obtainments of such regulatory clearances and the commencement of the Tender Offer as stated above will be also announced promptly. Note 1: The Business Combination Agreement (as defined in the “(1) Summary of the Tender Offer” of “1. Purpose of the Tender Offer”, hereinafter the same) provides that the commencement of the Tender Offer is subject to the following conditions precedent: (i) the required clearances (Note 3) shall have been obtained; (ii) the board of directors of the Target Company has adopted a resolution to express an opinion in support of the Tender Offer and a recommendation that its shareholders and holders of Stock Acquisition Rights (“Stock Acquisition Right Holders”) tender their shares and share options, respectively, in response to the Tender Offer (collectively, the “Opinion to Support and Recommend to Tender in the Tender Offer”), and the Opinion to Support and Recommend to Tender in the Tender Offer shall remain in effect at the time the Tender Offer is 1 commenced without amendment, supplement, or modification; (iii) the special committee of the Target Company reviewing the Business Combination shall have submitted to the board of directors of the Target Company an opinion that it is appropriate for the board of directors of the Target Company to issue the Opinion to Support and Recommend to Tender in the Tender Offer, and such opinion shall remain in effect at the time the Tender Offer is commenced without amendment, supplement, or modification; (iv) the Target Company performed and complied with, in all material respects, all obligations under the Business Combination Agreement (Note 4) that are required to be performed and complied with by it on or before the Tender Offer Commencement Date, and the representations and warranties of the Target Company set forth in the Business Combination Agreement (Note 5) shall be true and correct in all material respects as of the date of the Agreement and the Tender Offer Commencement Date; (v) HoldCo Crosby US and Crosby UK performed and complied with, in all material respects, all obligations under the Business Combination Agreement (Note 6) that are required to be performed and complied with by it on or before the Tender Offer Commencement Date, and the representations and warranties of HoldCo, Crosby US and Crosby UK set forth in the Business Combination Agreement (Note 7) shall be true and correct in all material respects as of the date of the Agreement and the Tender Offer Commencement Date; (vi) no governmental authority of any competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any law or made any final and binding request of a party or injunction, that is in effect and has the effect of making the Business Combination illegal or otherwise prohibiting or preventing the consummation of the Business Combination; (vii) there shall be no “material fact pertaining to the business” (Article 166, Paragraph 2 of the Act) of the Target Company that has not been “publicized” (Article 166, Paragraph 4 of the Act) by the Target Company; (viii) no event or circumstance shall have occurred since the date of the Business Combination Agreement that would be a withdrawal event under Article 27-11, Paragraph 1 of the Act with respect to the Tender Offer should the Tender Offer commence; and (ix) the Business Combination Agreement has not been terminated and remains in full force and effect; (collectively, “Tender Offer Conditions Precedent”). Note 2: Under the Business Combination Agreement, among the Tender Offer Conditions Precedent, (i) to (iii), (vi), (vii) and (ix) may be waived, if permitted by applicable laws, by the agreement of HoldCo, Crosby US, Crosby UK and the Target Company, (v) may be waived by sole discretion of the Target Company, and (iv) and (viii) may be waived by sole discretion of HoldCo, Crosby US and Crosby UK. As for (i), the Offeror may, where permitted by applicable law, commence the Tender Offer earlier than currently contemplated by waiving the condition when the Offeror reasonably expects to obtain the required clearances during the Tender Offer Period to offer the shareholders of the Target Company an opportunity to tender their shares earlier and quickly proceed with the Business Combination. Note 3: Notifications in relation to competition laws of Japan, the U.S., China, Austria, Cyprus and Serbia. 2 1. Purpose of the Tender Offer (1) Summary of the Tender Offer Note 4: Please refer to “(6) Matters relating to material agreements regarding the Tender Offer” of “1. Purpose of the Tender Offer” for the obligation of the Target Company provided in the Business Combination Agreement. Note 5: Please refer to “(6) Matters relating to material agreements regarding the Tender Offer” of “1. Purpose of the Tender Offer” for the representations and warranties of the Target Company provided in the Business Combination Agreement. Note 6: Please refer to “(6) Matters relating to material agreements regarding the Tender Offer” of “1. Purpose of the Tender Offer” for the obligations of HoldCo, Crosby US and Crosby UK provided in the Business Combination Agreement. Note 7: Please refer to “(6) Matters relating to material agreements regarding the Tender Offer” of “1. Purpose of the Tender Offer” for the representations and warranties of HoldCo, Crosby US and Crosby UK provided in the Business Combination Agreement. The Offeror was established on April 28, 2022 for the primary purpose of controlling and managing the business activities of the Target Company through the acquisition of and holding of the Target Company Shares after the completion of the Tender Offer, and, as of today, is a wholly owned subsidiary of HoldCo, established under the laws of England and Wales with its business purposes of holding shares of and managing its subsidiaries. Ascend Overseas Limited (“Ascend”), established under the laws of England and Wales, with its business purpose of holding shares of HoldCo, holds approximately 96.7% of the shares of HoldCo (and its management holds the remainder). Funds, investment vehicles and/or separately managed accounts (Note 8) advised by Kohlberg Kravis Roberts & Co. L.P., an investment advisory company established under the laws of Delaware, the United States (together with its and their affiliates and other related funds, “KKR” and those funds, etc., collectively, “KKR Advisory Funds, etc.”) directly or indirectly holds a 100% stake in Ascend. HoldCo directly holds a 100% stake in Crosby US, established under the laws of Delaware, and Crosby UK, established under the laws of England and Wales and indirectly holds a 100% stake in Crosby (Crosby, Crosby US, Crosby UK, HoldCo and the Offeror collectively the “Offerors.”). The Offerors and KKR do not hold any Target Company Shares as of today. Note 8: “Separately managed accounts” are entities structured for investment by one investor or related investors whereby KKR earns management and incentive fees, pursuant to a single management agreement between KKR and the investor(s) that are party/parties to that account. KKR Advisory Funds, etc. acquired Crosby US’s subsidiaries and Crosby UK’s subsidiaries through Ascend from Melrose Industries Plc in 2013. Crosby US and Crosby UK were used as acquisition vehicles for such acquisition and the acquisition resulted in the current form of Crosby Group. With roots dating back to 1836 and having a headquarter function in the United States, Crosby Group has been engaged in the lifting and securement hardware (Note 9) industry for nearly 3 two centuries with a focus on safety, quality, training and engineering leadership. Crosby Group maintains a global presence, with manufacturing and commercial operations across 16 manufacturing sites and 10 distribution centers in North America, Europe, Brazil, and Australia. With an international network of approximately 3,000 authorized distributors, Crosby Group provides a broad range of products used in a wide variety of industries and applications. Given its focus on being highly responsive to customer needs, Crosby Group has prioritized investment in innovation and new product development in lifting securement hardware and related technology. This focus has been further supported by significant investments into the operations of the business, including an investment in a manufacturing facility in Longview, Texas, that improved employee safety, increased output, and bolstered efficiency. Additionally, Crosby Group has also made acquisitions of companies that are complementary with Crosby Group’s business to support its continued growth and customer value proposition. Note 9: Lifting and securement hardware are hardware and accessories used, usually in conjunction with lifting equipment, to secure, lift or move equipment, construction components or other assets. KKR is a leading global investment firm that offers alternative asset management for its investors as well as capital markets and insurance solutions. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds in which KKR owns a minority stake. Since the opening of its Tokyo office in 2006, KKR has actively expanded its investment activities in the Japanese market, with investment professionals possessing a thorough understanding of Japanese business practices. Since 2010, KKR Advisory Funds, etc. have completed investments into 10 companies headquartered in Japan, including 3 take private transactions of Japanese publicly-listed companies. Most recently, KKR’s transaction experience in Japan includes investments in Hitachi Koki (2017), Hitachi Kokusai Electric (2017), Seiyu Co (2021), and Yayoi Co (2022). Through these transactions, KKR has worked and is working to support investment into and acceleration of growth for Japanese companies in various industry sectors, which are expected to achieve high growth in the future through KKR’s capital resources, and network with such companies. KKR’s investment activities in the Japanese market are further supported by its global capabilities, with KKR having offices in 21 cities and 109 private equity portfolio companies as of December 31, 2021. More broadly, KKR has a history in the Industrial Machinery sector as evidenced by the investments in Gardner Denver Inc., a US corporation providing compressors, blowers and vacuum pumps (2013), Capital Safety Ltd., a UK corporation manufacturing fall protection equipment (2011), and Crosby (2013). In total, KKR had $471 billion in assets under management as of December 31, 2021. Today, HoldCo, Crosby US, Crosby UK and the Target Company entered into a business combination agreement (the “Business Combination Agreement”; for the details of the Business Combination Agreement, please refer to the section below 4 titled “(6) Matters relating to material agreements regarding the Tender Offer) regarding a business combination (the “Business Combination”) between the Target Company Group (27 companies in total, composed of the Target Company, 25 consolidated subsidiaries and a non-consolidated subsidiary which is not an affiliate to which the equity method is applicable; hereinafter the same) and Crosby Group, and decided to conduct the Tender Offer for the purpose of acquiring all of the common stocks of the Target Company (the “Target Company Shares”) listed on the Prime Market of TSE as of today and the Stock Acquisition Rights (the “Stock Acquisition Rights” and the name of each of Stock Acquisition Rights are defined in “(ii) Stock acquisition rights” under “(3) Price of tender offer”; hereinafter the same) (excluding treasury shares owned by the Target Company; hereinafter the same), on the condition that the Tender Offer Conditions Precedent are satisfied or waived as part of the series of transactions (the “Transactions”) to realize the Business Combination. Crosby decided that the tender offeror of the Tender Offer should be the Offeror instead of Crosby US or its subsidiaries, including Crosby, so that Crosby US and Crosby UK and the Target Company will become sister companies after the Merger (defined in the section below “(iv) Management policy after the Tender Offer”, hereinafter the same) and each group can operate under the spirit of a “merger of equals” for a smooth integration and maximization of the corporate value of the Combined Group (as defined in the “(ii) Background, purpose, and decision-making process leading the Offeror to conduct the Tender Offer” under “(2) Background, purpose, and decision-making process leading to the decision to conduct the Tender Offer, and management policy following the Tender Offer”). If the total number of share certificates, etc. tendered in response to the Tender Offer (the “Tendered Share Certificates, Etc.”) is less than the minimum number of share certificates, etc. to be purchased (13,817,400 shares, ownership percentage (Note 10): 66.67%) (Note 11), then the Offeror will not purchase any of the Tendered Share Certificates, Etc. However, because the purpose is to acquire all of the Target Company Shares and the Stock Acquisition Rights, the Offeror has not set a limit on the maximum number of share certificates, etc. to be purchased, and if the total number of Tendered Share Certificates, Etc. is equal to or greater than the minimum number of the share certificates, etc. (13,817,400 shares), then the Offeror will purchase all of the Tendered Share Certificates, Etc. The minimum number of share certificates, etc. to be purchased (13,817,400 shares) is to be the product of two thirds of the number of voting rights relating to the Total Number of Shares After Considering Potential Shares (as defined below) (207,260 voting rights) (this amounts to 138,174 voting rights; rounded up to the nearest whole number), multiplied by 100, which is the share unit number of the Target Company. Because the purpose is to acquire all of the Target Company Shares and the Stock Acquisition Rights as part of the Transactions, the minimum number has been set to ensure that the Transactions will be carried out given that a special resolution in the shareholders’ meeting as provided for in Article 309, Paragraph 2 of the Companies Act is required for carrying out the procedures for the Share Consolidation as described in the section below titled “(4) Policy for organizational restructuring after the “Two-Step the Tender Offer (matters relating Acquisition”)”. Note 10: “Ownership percentage” means the percentage (rounded to the two to 5 decimal places) of the number of shares (20,726,019 shares) (the “Total Number of Shares After Considering Potential Shares”) equal to the sum (21,196,200 shares) of the total number of issued shares of the Target Company as of March 31, 2022 (21,048,200 shares) as stated in the “Business Results for the Fiscal Year Ended March 31, 2022 [Japanese GAAP] (Consolidated)” submitted by the Target Company on May 16, 2022 (the “Target Company’s Business Results”) and (i) the Target Company Shares (20,000 shares) underlying the Tenth Series Stock Acquisition Rights (100 stock acquisition rights), (ii) the Target Company Shares (17,000 shares) underlying the Eleventh Series Stock Acquisition Rights (85 stock acquisition rights), (iii) the Target Company Shares (20,000 shares) underlying the Thirteenth Series Stock Acquisition Rights remaining (100 stock acquisition rights), (iv) the Target Company Shares (51,000 shares) underlying the Fourteenth Series Stock Acquisition Rights (255 stock acquisition rights), and (v) the Target Company Shares (40,000 shares) underlying the Fifteenth Series Stock Acquisition Rights (200 stock acquisition rights), in each case remaining as of today and as reported by the Target Company, less the treasury shares (470,181 shares) owned by the Target Company as of March 31, 2022. This applies hereinafter in the calculation of the ownership percentage. Note 11: The minimum number of share certificates, etc. to be purchased is temporary and depends on the information as of today, and the actual number of share certificates, etc. to be purchased in the Tender Offer may differ from the number above due to a change of situation occurring hereafter. The final minimum number of share certificates, etc. to be purchased is to be determined before the commencement of the Tender Offer, based on the latest number of treasury shares owned by the Target Company available as of the commencement of the Tender Offer. If the Tender Offer has been successfully completed, but the Offeror is unable to acquire all of the Target Company Shares and all of the Stock Acquisition Rights in the Tender Offer, then the Offeror intends to carry out the Squeeze-Out Procedures (meaning a series of procedures described in the section below titled “(4) Policy for organizational restructuring after the Tender Offer (matters relating to the “Two-Step Acquisition”)”, hereinafter the “Squeeze-Out Procedures”) in order for the Offeror to make the Target Company a wholly-owned subsidiary of the Offeror after the successful Tender Offer. The Offeror intends to cover the funds required for the settlement of the Tender Offer by equity contributions by HoldCo (the “Contribution”) and by an intercompany loan from Crosby US, a wholly-owned subsidiary of HoldCo. Crosby US will borrow the funds necessary to permit such loan through incremental borrowings from financial institutions under its existing credit facilities (the “Debt Financing”), which will allow Crosby US to source funds at more favorable terms with light covenants regarding the operation of the Target Company Group compared to financing by the Offeror while maximizing operational flexibility of the Target Company Group and limiting transaction costs. With respect to the Debt Financing, it is possible, that a security will be established over part of the shares or assets of the Target Company Group or that the Target Company Group will 6 provide a joint guarantee. HoldCo also intends to cover a part of the Contribution through an equity financing by KKR North America Fund XI L.P., a limited partnership affiliated with KKR established under the laws of the U.S. According to “Announcement of Position Statement on the Planned Commencement of the Tender Offer for Shares, etc. of KITO CORPORATION by Lifting Holdings BidCo, Inc. in Connection With the Business Combination of KITO CORPORATION and Crosby Group” released by the Target Company on May 16, 2022 (the “Target Company’s Press Release”), at the board of directors meeting of the Target Company held today, a resolution was made stating that based on the grounds and reasons set out in the section below titled “(2) Background, purpose, and decision-making process leading to the decision to conduct the Tender Offer, and management policy following the Tender Offer”, if the Tender Offer commences, the position of the Target Company as of May 16, 2022 is that it will declare a position in support of the Tender Offer and that it will recommend that the Target Company’s shareholders and Stock Acquisition Right Holders accept the Tender Offer. As stated above, since the Offeror plans to promptly commence the Tender Offer on the date that is (i) within 10 business days after the Tender Offer Conditions Precedent are satisfied or waived and (ii) agreed among HoldCo, Crosby US, Crosby UK and the Target Company and the Offeror aims to commence the Tender Offer on or around late October 2022 as of today, but it is difficult to accurately estimate the amount of time required for those procedures, etc. as they involve domestic and foreign regulatory authorities. Given that fact, the detailed schedule for the Tender Offer will be promptly announced once we have obtained all regulatory clearances. For these reasons, at the aforementioned board of directors meeting it was resolved to take the following steps pertaining to the position statement of the Target Company. As set out in the section below titled “(i) Establishment of an independent special committee at the Target Company” under “(3) Measures to ensure the fairness of the Tender Offer Price and avoid conflicts of interest, and other measures to ensure the fairness of the Tender Offer,” the Target Company’s board of directors additionally resolved that when the Tender Offer commences, the special committee established by the Target Company will be asked to review whether or not there is any change to the contents of the Report (as defined in the section below titled “(b) Background of examination and negotiations” under “(iii) Decision-making process and reasons of the Target Company to issue the opinion to support the Tender Offer” of “(2) Background, purpose, and decision-making process leading to the decision to conduct the Tender Offer, and management policy following the Tender Offer”), and if there is no change, to state this fact to the Target Company’s board of directors, and if there is a change, to state a position after the change, and based on such position, the Target Company will again publish its position on the Tender Offer when the Tender Offer commences. For the details of the resolution of the Target Company’s board of directors meeting, please refer to the section below titled “(v) Approval of all the directors in the Target Company and opinions that there has been no objection from any of the Target Company’s independent statutory auditors” under “(3) Measures to ensure the fairness of the Tender Offer Price and avoid conflicts of interest, and other measures to ensure the fairness of the Tender Offer”. 7 The Transaction is substantially as shown in the following diagrams. I. Prior to the Tender Offer (current state) KKR Advisory Funds, etc.100%HoldCoAscendHoldCo’sManagementApprox. 96.7%Approx. 3.3%100%100%100%Crosby USCrosby UKOfferor100%Crosby US Other Wholly-owned Sub100%CrosbyShareholders of Target Company100%Target Company II. After the completion of the Tender Offer and the Squeeze-Out Procedures 8 KKR Advisory Funds, etc.100%HoldCoAscendHoldCo’sManagementApprox. 96.7%Approx. 3.3%100%100%100%Crosby USCrosby UKOfferor100%Target Company100%Crosby US Other Wholly-owned Sub100%Crosby Note: Figures in the charts are direct or indirect ownership percentages. (2) Background, purpose, and decision-making process leading to the decision to conduct the Tender Offer, and management policy following the Tender Offer The background, purpose, and decision-making process leading to the decision to conduct the Tender Offer as well as the management policy following the Tender Offer are described below. The description of the Target Company Group included below is based on information released by the Target Company, the Target Company’s Press Release, and explanations received from the Target Company. (i) The Target Company’s operational environment and the Target Company’s management challenges Since the Target Company was founded in November 1932 by its founder, Miyoshi Kito, in Omori (Ota Ward, Tokyo) as The Kito Manufacturing Company, it has earned deep trust for its development of a business manufacturing and selling material handling devices (Note 12) that are vital for lifting, carrying and immobilizing items. The Target Company began overseas expansion in earnest with the creation of a US subsidiary in January 1990, and today has 17 business subsidiaries operating in 15 countries, including in North America, Asia, and European countries, with revenue outside Japan responsible for around 75% of the total revenue of the Target Company Group. The Target Company’s products and 9 services demonstrate high levels of safety and durability to meet sustained demand at all levels of economic development, and moreover have evolved to meet the needs of the wide range of industries that need a high level of safety and efficiency in handling heavy items. The Target Company’s biggest management challenge continues to be to always look at problems from the customer’s perspective on-site for those in material handling around the world, making new proposals, earning the trust of the market by providing products and services that achieve those proposals, and becoming “the world’s best hoist manufacturer” by supporting the conduct of safe and productive activities in society by customers and adding value to society. The Target Company has as its corporate mission, “KITO’s Mission: Deliver Unmatched Satisfaction to Our Customers”, “KITO’s Quality: Our Driving “Spirit” is “Quality””, “KITO’s Innovation: Change and Challenge Always”, and “Value of KITO People: Integrity, Honesty Pride and Gratitude.” Based on this, the Target Company is achieving support for safe and efficient social activities by providing high quality products and services from the customer’s point of view and is aiming for corporate management that earns the trust of society while building relationships with shareholders, investors and all stakeholders in the Target Company Group. Note 12: “Material handling devices” means chain blocks, lever blocks, rope hoists, cranes, and other handling devices used to make the storage, transportation, and immobilizing of heavy items and other logistics business more efficient. After its founding, the Target Company carried out an entity conversion to a limited partnership company in June 1937, and then in July 1944, it both carried out an entity conversion to a joint stock company and changed its trade name to Kito Kousa Kiki Kogyo Co., Ltd. It changed its trade name to The KITO Manufacturing Company in November 1945, and then changed its trade name to the current KITO CORPORATION in November 1970. Thereafter, it listed its shares as over-the-counter registered stock with the Japan Securities Dealers Association in October 1980. Since then, the Target Company’s earnings and profits continued to trend upwards and it expanded the size of its business, but with a prolonged domestic economic slowdown in Japan after the collapse of the 1990’s bubble economy and difficult financial circumstances, the Target Company aimed for an overseas expansion centered on the U.S. and a fundamental reform of its financial footing. In July 2003, with the backing of the Carlyle Group, a private equity fund headquartered in the U.S., the company announced a management buyout, which involved execution of a tender offer for the Target Company Shares by Carlyle Japan Holdings 3 Co., Ltd. (“CJP3”), wholly owned by Carlyle Group, a share exchange for cash consideration, and an absorption-type merger that made the Target Company the surviving company and CJP3 the disappearing company, and which led to the delisting its shares as over-the-counter registered stock in October 2003. After de-listing, in collaboration with Carlyle Group, the Target Company on the one hand developed a swift decision-making system and strengthened its business foundation, and as one aspect of strengthening the management of its overseas businesses, worked to strengthen and expand its overseas business primarily in the US and China markets, strengthen its finances, and execute mergers and acquisitions transactions to divest unprofitable businesses and acquire or form business alliances, etc. with local companies overseas. As a result, it built a strong base for business growth, as compared to the Target Company’s sales of JPY 20,759 million and operating profit of JPY 1,002 million 10 in the fiscal year to March 2003 before the de-listing, both sales and operating profit grew to JPY 24,244 million yen and 3,207 million yen, respectively, in the fiscal year to March 2007 after the de-listing of the Target Company Shares but before their re-listing on a financial instrument exchange market. Thereafter, in order to achieve the Target Company’s own target of becoming “the world’s best hoist manufacturer”, and given the equity funding needs to invest in growth and the fact that the Target Company had built a framework to seek to stabilize its business and finances and make possible realization of sustainable income and expenditures as a result of a series of structural reforms, to secure access to the stock market, gain societal trust and further raise brand awareness, the Target Company listed on the first section of the market established by TSE in August 2007. As of today, based on restructuring of the market divisions of the TSE, the Target Company is listed on the Prime Market, a new market segment of the TSE. As of today, the Target Company Group’s primary business is the development, manufacture and sales of material handling equipment such as hoists, cranes and peripheral devices. Based on the aforementioned management policy, in its five-year medium-term management plan from the fiscal year to March 2017 until the fiscal year to March 2021, the Targett Company aimed for further expansion of the scale of profits, listing a return to high profitability, an expanded product portfolio, and conversion to a global organization. Some success was achieved towards these goals, and the Target Company achieved its highest sales figure yet in the fiscal year to March 2022. However, there was also an impact from external factors such as weakened demand for material handling devices, which was affected by the slowdown in capital expenditure in automobile-related industries, etc. due to the extended COVID-19 pandemic, with the actual value of EBITDA for the fiscal year to March 2021, which had been targeted to double to JPY 13 billion in five years, being JPY 7.5 billion, and as a result the Target Company was not able to achieve the targeted expansion of the scale of profits. Going forward, in addition to steadily capturing the increase in demand resulting from a return to economic activity as the COVID-19 pandemic subsides, the Target Company is aware of the urgent task of securing profitability growth exceeding the cost increases resulting from personnel expenses and raw materials prices affected by inflation pressures and soaring transportation expenses and the like, and of achieving profit growth through expansion of its Europe business. In the medium term, the Target Company believes that in order to achieve further growth globally in hoist and crane industry in which the Target Company operates, it is essential for it to win more business in the material handling field in which the Target Company is well positioned, and maximize added value for customers by expanding the product line up and fields of services. Based on the ongoing changes in the hoist and crane industry and accelerating moves by the Target Company’s competitors to peripheral businesses, in order for the Target Company Group to raise its overall business to the next stage without being buffeted by the business environment or social circumstances and to ensure medium and long-term growth, the Target Company understands the current circumstances to require agile and rapid expansion of its business domain through decisive management actions and bold investments in resources. Given these management challenges and business environment, the Target Company has considered various management strategies the Target Company could 11 take to enhance corporate value, and among those, has heretofore repeatedly considered measures with respect to a business alliance or a business integration, and as one aspect of that, an M&A transaction, with a partner who will promote globalization of the business and organization and who will supplement expansion of the product lineup. (ii) Background, purpose, and decision-making process leading the Offeror to conduct the Tender Offer Crosby has a highly informed admiration for the Target Company’s brands, product innovation, product quality, company leadership, and market reputation. Crosby developed this view since 2014 when KITO Americas, Inc., the Target Company’s US subsidiary, acquired Peerless Industrial Group, Inc. (“Peerless”), a company that supplied products to Crosby, thus helping Peerless to introduce Crosby to the Target Company. Beyond information gathered through these former supply relationships, Crosby has learned about the business of the Target Company since November 2016 through publicly available industry information and insights gathered from trade shows, industry conferences, and has periodically engaged with the Target Company’s management team, as part of its efforts to identify potential partners for M&A transactions or other strategic alliances. Through evaluation from channel participants such as distributors, end users, and suppliers, Crosby is also aware of the Target Company’s positive reputation in the industry. With these positive recognition on the Target Company, Crosby understands that the Target Company’s Group is experiencing a favorable demand backdrop for its products globally as manufacturing and other industries continue to recover from the impacts of the pandemic of COVID-19 in 2020 and 2021. Crosby understands that the Target Company and Crosby face similar challenges, including material shortages such as steel, inflationary challenges leading to increased raw material costs, repair componentry costs, and freight and packaging costs, in the current supply chain environment such as slowdown in capital expenditure in infrastructure and industrial-related industries, etc. due to the extended COVID-19 pandemic and the cost increases resulting from personnel expenses and raw materials prices affected by inflation pressures and rising transportation expenses, giving it an appreciation for the importance of navigating these challenges. Crosby believes the combination of the Target Company’s Group and Crosby Group would provide greater operational resources in the form of capital to invest in the combined business, sharing practices from each company within each of the Target Company Group and Crosby Group to enact better safety practices, employees to engage in product innovation and sharing of ideas, and flexibility to help manage these dynamic headwinds, positioning the Combined Group to be better equipped to serve customers, employees, and communities in the face of supply chain challenges and inflationary pressures (HoldCo plans to change its trade name to Kito | Crosby after the completion of the Business Combination, and HoldCo after the completion of the Business Combination hereinafter referred to as the “Combined Company” and the Combined Company and its subsidiaries (i.e. the Target Company Group and Crosby Group) collectively referred to as the “Combined Group”). As a result, Crosby believes the Combined Group would be able to maintain better quality from sharing manufacturing practices, and achieve 12 better customer service from sharing talent and greater combined experience with servicing customers than either Crosby Group or the Target Company’s Group could achieve standalone. Additionally, the Combined Group would likely be able to utilize their complementary capabilities in new product development to create innovations for new and existing customers of each of Crosby Group and the Target Company’s Group. Specifically, the Target Company Group has expertise in crane applications and Crosby Group has expertise in rigging hardware applications (hardware products attached to objects to secure, lift, and suspend), which are complementary product areas within the lifting and securement hardware industry. The Combined Group can also use their complementary geographic presences as Crosby Group is headquartered in the U.S. while the Target Company Group is headquartered in Japan, giving the Combined Group better presence globally to service customers across the globe to add further value to employees, customers, suppliers and communities, and to promote sales of the products across a broader global landscape to better serve customers. Since the acquisition of Crosby in 2013, KKR has closely assisted Crosby in its strategic decision-making processes, including providing advice on Crosby’s acquisition strategy. Three senior KKR investment professionals and two KKR Senior Advisors are members of Crosby’s board of directors. In addition, KKR and Crosby US have entered into a Monitoring Agreement, pursuant to which, among other services, KKR provides strategic assistance to Crosby with respect to (i) identification, support, negotiation and analysis of acquisitions and dispositions and (ii) support, negotiation and analysis of financing alternatives, including, without limitation, in connection with acquisitions. As is typical for its investments, KKR has regular discussions with the management team of Crosby to assist in identifying and evaluating acquisition targets, assisting in due diligence, and assisting in the integration of acquisition targets into Crosby. Through such discussions, KKR and Crosby have identified several potential strategic partners including the Target Company. Further, throughout the process of due diligence on the Target Company, KKR assisted Crosby in its evaluation of the Target Company and ultimately provided support for the transaction given the strategic merits of the Combined Group. Informed by the information gathered through the above research of publicly available information and insights gathered from trade shows and industry conferences as part of its efforts to identify potential partners for M&A transactions including business integration or other strategic alliances and impressed by the Target Company’s strong franchise and operating performance, for purposes of seeking possibilities of M&A or other strategic alliances, Crosby initiated high-level introductions with the Target Company senior management team starting in early June 2021. Crosby made KKR aware of its high-level introductions with the Target Company, to which KKR agreed with Crosby’s desire to move forward with these discussions. These conversations involved preliminary strategic discussion on the respective businesses and on the structure of the alliance, including strategic alliance, minority investments, joint venture and business combination, which allowed Crosby to further hone its appreciation for the Target Company’s business and to realize how a combination with the Target Company would maximize corporate value and benefit customers and suppliers by expanding high quality product offerings, increasing service levels for distributors, and realizing procurement and manufacturing efficiencies. Based on these preliminary strategic 13 discussions, Crosby decided to commence discussions with the Target Company on a potential combination. A series of touchpoints and check-ins with the Target Company’s senior team ensued over the subsequent months (early June 2021 to mid February 2022) allowed Crosby to continue to gain conviction on the strategic merits of a business combination between the Target Company and Crosby as Crosby was able to understand and appreciate the Target Company’s management philosophy, corporate culture, business operation focusing on the quality and safety of its products and deepening discussions regarding the viability of synergy creation opportunities and Crosby came to believe that the business combination between Crosby and the Target Company will enable to unlock significant value for all stakeholders in a way that is materially different from alternative partners which Crosby considered and examined as potential partners or standalone options by expanding high quality product offerings, increasing service levels for distributors, and realizing procurement and manufacturing efficiencies. Crosby conducted an examination on transaction schemes to achieve the Business Combination with input from advisors. Given KKR’s experience with many types of transactions, the strategic assistance provided by KKR to Crosby and the fact that senior KKR investment professionals and KKR Senior Advisors are members of Crosby’s board of directors, Crosby sought advice of KKR. During the examination, and based on advice from advisors and KKR, Crosby reached a conclusion that a tender offer followed by the squeeze-out would be the most appropriate measure for the Transactions, considering that (i) HoldCo can make the Target Company its wholly-owned company and conduct the Business Combination between each of the Target Company Group and Crosby Group, (ii) the structure and procedure of the transaction are simple compared to conducting a corporate reorganization under the Companies Act of Japan or other transactions, given that the Offerors are foreign entities and have no existing capital relationship with the Target Company, (iii) the transaction could offer the shareholders of the Target Company an opportunity to sell their shares with premiums if the transaction terms are appropriate, and (iv) it is a common method of taking a Japanese listed company private. KKR was supportive of this transaction scheme for the aforementioned reasons. Crosby also reached a conclusion that the tender offeror of the Transaction should be the Offeror instead of Crosby US or its subsidiaries, including Crosby, so that Crosby US and Crosby UK and the Target Company will become sister companies after the Merger as stated in the section above “(1) Summary of the Tender Offer”, and each group can operate under the spirit of a “merger of equals” for a smooth integration and maximization of the corporate value of the Combined Group. Ultimately, Crosby submitted a non-binding letter of intent on February 14, 2022 proposing a business combination of the Target Company Group and Crosby Group through a Tender Offer for Target Shares followed by a squeeze out (the “Letter of Intent”). This submission was motivated by the current macroeconomic environment such as material shortages and inflationary pressures described above, which Crosby believes is well-suited to bring together the Target Company Group and Crosby Group because the Combined Group will have access to more resources to solve these challenges. Specifically, Crosby believes the increased focus on infrastructure spending and safety – as demonstrated by the passing in the U.S. of the $550 billion Infrastructure Investment and Jobs Act signed on November 15, 2021 – highlights the need for coordinated investment by the Combined Group in innovation, quality, and customer service for the Target Company Group and Crosby Group product categories. As described previously, Crosby believes the 14 combined businesses will be better able to support customers in many industries including the global infrastructure, wind energy, and entertainment segments through enhanced investment by the combined businesses in new products, a more responsive supply chain and product delivery mechanism, and broader access to end-user training These initiatives would be lesser served by Crosby Group and the Target Company Group separately because the individual entities would have fewer resources, in the form of capital for investment, people for developing innovation, and ideas for improving safety, individually and thus would not be able to expand the product portfolio and develop a stronger supply chain. This is particularly important given the difficult supply chain environment businesses are currently facing, making the benefits of a combination compelling at this time. The Target Company responded to the Letter of Intent on February 25, 2022, allowing Crosby to initiate due diligence. Also, in the Target Company’s response, it was stated that the board of directors of the Target Company discussed the Letter of Intent, the strategic merit presented by Crosby, and approved assigning the special committee to evaluate the proposal. Crosby and the Target Company commenced due diligence mutually from early March, 2022 where Crosby focused on developing a deeper understanding of the Target Company’s mid-term financial plan as well as confirmatory due diligence on accounting, tax, legal, information technology, benefits, insurance, and environmental topics. Through discussion with the Target Company related to the company’s mid-term financial plan, Crosby developed a deeper understanding of the standalone objectives of the Target Company, which further affirmed the potential for value creation of the combined entity. Through such due diligence and further analysis and discussions, Crosby reconfirmed its belief that the Business Combination would unlock significant value for all stakeholders in a way that is materially different from alternative partners which Crosby considered and examined as potential partners or standalone options by expanding high quality product offerings, increasing service levels for distributors, and realizing procurement and manufacturing efficiencies. Crosby believes that the Business Combination would result in strong value delivered to both companies’ end-users, employees, channel partners, suppliers, and shareholders. Following the completion of the majority of due diligence in mid-April, 2022, Crosby are convinced that the Target Company Group and Crosby Group, through the Business Combination, will be best positioned to deliver increased value across a wide range of areas and generate synergies including, but not limited to: • Higher investment in areas such as product development, market research, and expertise in core areas such as metallurgy, additive manufacturing, and technology to drive continued leadership in innovation and safety. Superior product innovation will be driven by the ability to enhance investment in engineering and product design, yielding benefits across a larger portfolio of products to best serve the joint end-user base. The Target Company Group and Crosby Group bring complementary engineering and product capabilities to this combination; the Target Company Group’s core capability being in mechanical and electro-mechanical disciplines while Crosby Group brings its capabilities in metallurgy and metal forming, together these areas of competencies will enable new and innovative products that blend both 15 • disciplines. The Target Company Group and Crosby Group each contribute proportionally to the profitability that enables efficient investments in product development and market research, which can be shared across both teams. • Continued advancements to the shared safety culture by implementation of a global safety council, leveraging best practices and increased financial resources for greater investment in safety initiatives. The Target Company Group and Crosby Group both equally bring a safety mindset to the combined business, which is evidenced by the fact that both companies received the Associated Wire Rope Fabricators (AWRF) 2020 Safety Award in North America and will share such mindset in the combined business. While each company group has some unique core manufacturing processes (e.g. forging for Crosby Group, machining and robotics for the Target Company Group), their somewhat different sets of safety practices can be shared across the combined business to create a single set of best practices, which will ultimately drive increased worker safety. Increase in opportunities for all employees through expanded and diverse career and development paths which would be achieved through more diverse international rotational assignments, as well as the overall increased size and scope of activities that allow for new opportunities within local regions. Broader and more diversified career paths in the combined business will enable attraction and retention of the best available talent in the market driving innovation and productivity. The Target Company Group and Crosby Group both equally bring a focus on the team members to the Business Combination. The increased size and scope of combined business allows for team members from both businesses to have an opportunity for larger roles in the combined business. The Target Company Group and Crosby Group each contribute proportionally to the profitability that enables efficient investments in training, development of rotational programs or temporary overseas assignments. Improved ability to invest in and deliver on ESG (Environment, Social, and Governance) metrics such as environmental stewardship, a diverse and engaged workforce, and a strong focus on governance and corporate social responsibility. Examples of Crosby Group’s environmental stewardship include installation of LED lighting at manufacturing facilities, inclusion of EVs in corporate leasing program, and EV charging stations at select locations. Crosby is in the process of creating an environmental CAPEX sub-committee to prioritize further investments in ESG, irrespective of short-term financial returns. Crosby Group has also focused its M&A strategy on the renewable energy market, with the acquisition of Airpes Sistemas Integrales de Manutencion Y Pesaje S.L., established in Spain and a leader in lifting tools used during the erection of wind turbines, which was announced in 2021. For every transaction completed, a comprehensive environmental audit is conducted by third parties. These factors are important to both Crosby Group and the Target Company Group as further evidenced by Crosby’s UpLift Women’s network, which is an internal organization to connect the female officers and employees of Crosby through regular meetings and speaker series that provide leadership and developmental training; investment in the community through partnerships with Children of Fallen Patriots, a foundation in the United States that provides college scholarships and educational counseling to military children who have lost a parent in the line of duty, and Bridges to Prosperity, a nonprofit organization in the United States that works • 16 to eliminate rural isolation through the building of bridges; and ongoing investments in the workforce, the Target Company’s “A” rating for ESG Management by Mitsubishi UFJ Research and Consulting, supported by the Japan Credit Agency, the introduction of virtually CO2-free electricity at the headquarters plant (which was announced on March 31, 2022), the provision of products compatible with wind power generation, and the employment rate of disabled persons is around 7%, which is significantly higher than the statutory rate of 2.2%. The Target Company Group and Crosby Group bring complementary areas of focus for investing in the communities in which they operate. The Target Company Group’s higher level of focus and experience in areas such as environmental and employment of disabled persons is complementary with Crosby Group’s historical focus on higher education and hands on building and construction for under privileged communities. Taken together, we have the potential to enhance the communities in which operate a broader array of areas than either company could on its own. • • Expansion of high quality products and solutions to efficiently allow end-users and channel partners to procure from a trusted provider. End-users will experience higher levels of efficiency and safety in their organizations through better technical, application, and training support from a combined business, as well as through increased product innovation. Increase in commitment to the local communities in which the Target Company Group and Crosby Group operate by expanding opportunities for community service, engagement, and support of causes important to local populations. Both the Target Company Group and Crosby Group independently have volunteering and community outreach programs that can be expanded through the Business Combination due to increased availability of resources. Crosby Group’s community involvement includes a partnership with Bridges to Prosperity, an organization that works to eliminate rural isolation through the building of bridges. Crosby Group’s support includes donation of products for use in bridges throughout Eastern Africa as well as training and expertise, and sending team members to Uganda to assist in the construction of a bridge. In order to achieve the above, Crosby believes that it is necessary to privatize the Target Company through the Business Combination to create an environment in which the management will have the flexibility to make decisions and investments that will yield long-term benefits for the business, customers, team members, and communities. Crosby also believes that it is necessary to privatize the Target Company because frictionless exchange of information and ideas would not be possible in a minority investment or making the Target Company a subsidiary whose shares remain listed, given the practical and legal limitations on integration of teams, and strategy deployment for public companies with minority shareholders and due to confidentiality, potential conflicts of interests with minority shareholders with respect to optimized decision making as an integrated group, fewer communication channels and day-to-day cooperation. By making the Target Company a wholly owned subsidiary of the Tender Offeror and creating an integrated group, the Combined Group would be able to have management team members and the broader employee base move freely between organizations to openly share best practices, support investment in product innovation and intellectual property development, and invest in growth without practical and legal hindrance or conflicting priorities. This type of open exchange of information 17 without restriction and support investment in product innovation and intellectual property development would be very difficult in a minority investment or making the Target Company a subsidiary whose shares remain listed as it will be easier to communicate without conflicts of interest and when interests are aligned by making the Target Company wholly owned by the Tender Offeror. For the review process by Crosby and discussions and negotiations with the Target Company described above, KKR decided to support Crosby in its decision to pursue the Transactions, resulting in Crosby engaging in discussions and negotiations with the Target Company and its special committee regarding whether to implement the Transactions and the terms and conditions including the details of the structure, as well as the management and operational plans after the Business Combination and submitting a non-binding proposal on April 27, 2022 regarding the price of the Tender Offer per share of the Target Company Shares (the “Tender Offer Price”) (the “First Proposal”). Crosby conducted a comprehensive and multifaceted analysis of the Target Company’s business, financial status and future plan, and made the Tender Offer Price in the First Proposal JPY 2,400, considering that (i) Crosby believed the price would not cause any disadvantages to the shareholders of the Target Company, given its premiums to market prices of the Target Company Shares as of April 26, 2022 were (a) 39.70% to the simple average closing prices of the Target Company Shares over the preceding one-month period of JPY 1,718, (b) 41.34% to the simple average closing prices of the Target Company Shares over the preceding three-month period of JPY 1,698, and (c) 36.21% to the simple average closing prices of the Target Company Shares over the preceding six-month period of JPY 1,762 and (ii) Crosby could provide the shareholders that purchased the Target Company Shares at a higher price than the current price over the past three years with the opportunities to sell the Target Company Shares at a higher price than the purchase prices for such shareholders, given the highest closing price of the Target Company Shares over the past three years was JPY 2,055. There was no specific proposal for the tender offer price for Stock Acquisition Rights (the “Stock Acquisition Rights Tender Offer Price”) in the First Proposal because it was made on a fully diluted basis assuming all Stock Acquisition Rights have been fully exercised (i.e., the total number of shares is 20,724,019 (Note)). (Note) Based on the information Crosby had as of the submission date of the First Proposal (April 27, 2022), it was calculated as the sum of the total number of issued shares of the Target Company as of December 31, 2021 (21,048,200 shares) as stated in the “Business Results for the Third Quarter of the Fiscal Year Ending March 31, 2022 Japanese GAAP (Consolidated)” submitted by the Target Company on February 8, 2022 (the “Target Company’s Business Results”) and (i) the Target Company Shares (20,000 shares) underlying the Tenth Series Stock Acquisition Rights (100 stock acquisition rights), (ii) the Target Company Shares (17,000 shares) underlying the Eleventh Series Stock Acquisition Rights (85 stock acquisition rights), (iii) the Target Company Shares (20,000 shares) underlying the Thirteenth Series Stock Acquisition Rights (100 stock acquisition rights), (iv) the Target Company Shares (51,000 shares) underlying the F