ITOKI CORPORATION (Head office: Joto-ku, Osaka City, President: Yoshiro Hirai, hereinafter "ITOKI") is pleased to announce that it will establish a new head office in China and create an overseas business platform in China and Asia with a sales base to be built through a strategic business alliance with major Taiwanese furniture manufacturer UB Office Systems Inc. (Head office: New Taipei City, Taiwan, hereinafter "UB"), and a manufacturing base to be acquired through the acquisition of shares in mid-sized Chinese chair manufacturer Shanghai Allbest Furniture Co., Ltd. (Head office: Shanghai, China, hereinafter "Allbest"), making it a subsidiary.

The Itoki Group has been proactively pursuing M&A and strategic business alliances since last year in order to establish overseas business as one of the pillar businesses in its 2020 medium-term management plan.
As the first step, we acquired the Singaporean interior design company Tarkus last year, and now we are planning to establish a new Chinese headquarters, Novo Workstyle (China) Ltd., to continue building an overseas business platform in China, the world's largest and fastest-growing country, and to develop our spatial office solutions business.

The new Chinese headquarters, Novo Workstyle (China) Ltd., will integrate Itouki (Suzhou) Furniture Co., Ltd. and the recently acquired subsidiary Allbest as a production base, and will use the sales resources and sales network acquired through the strategic business alliance with UB as a sales base, forming a platform for the Itoki Group's Asian business expansion from both the manufacturing and sales perspectives with an eye on the Chinese and Asian markets.
Itoki itself will specialize in governance, and by delegating a large amount of authority to local managers who are excellent at management and trustworthy with a proven track record, it aims to provide products and services that meet local needs in a timely manner.

Organizationally, Novo Workstyle (China) Ltd. will have Novo Workstyle Asia Ltd., an ITOKI Hong Kong subsidiary established in May, as its holding company, but at the same time, Novo Workstyle HK Ltd. will be established under the holding company to utilize the Novo Workstyle (China) Ltd. platform to promote sales in Hong Kong and ASEAN.

With this business expansion, the Itoki Group aims to achieve consolidated overseas business sales of approximately 17 billion yen (Note) in 2020, including China, ASEAN, and other regions.

Funding
The funds for this transaction will come from the Company's own cash on hand and external borrowings.

Impact on business performance
The impact of this matter on our business performance for the current fiscal year (ending December 2017) is expected to be minor. We will provide an update as soon as the outlook is finalized.

Other information will not be disclosed due to confidentiality reasons.

Other information will not be disclosed due to confidentiality reasons.