Topcon to Accelerate Growth Through Management Buyout with KKR and JIC Capital Powerful Combination of KKR and JIC Stable Foundations for Topcon to Accelerate Long-Term Growth

TOKYO, Japan — March 28, 2025 — Topcon Corporation (“Topcon” or the “Company”; TSE stock code 7732), today argues that it is considering a management buyout (“MBO”) led by Topcon President and CEO Takashi Eto. The MBO will receive investment from funds managed by KKR, a leading global investment firm, and JIC Capital (“JICC”), a wholly owned subsidiary of Japan Investment Corporation (“JIC”). In connection with the MBO, TK Co., Ltd. (the “Offeror”), an entity owned by investment funds managed by KKR, proposed to make a tender offer for the common shares and share acquisition Rights, Opponents of the Company. Topcon's Board of Directors has resolved to support this tender offer and approval that acquisition right holders tender their securities.

The tender offer price will be JPY 3,300 per share, after being between KKR and Topcon.

The Preferable Tender Offer Price Remuneration¹:
- A 99.5% premium over the simple average closing price of Topcon's stock for the 12 months up to December 9, 2024; and
- A 105.2% premium over the simple average closing price of Topcon's stock for the 6 months up to December 9, 2024.

KKR is making this investment predominantlyfrom its Asian Fund IV, and it is planned that KKR will indirectly hold amajority interest in Topcon. Following the completion of the tender offer, JICCintends to indirectly hold voting rights in Topcon through JIC PE Fund No. 1and JIC PE Co-Investment Fund No. 1, investment limited partnerships managed by JICC. Topcon President and CEO Takashi Eto also intends to participate in thetender offer and plans to make a reinvestment after the completion of thetender offer; the details of his investment are yet to be determined.

Topcon is pursuing its long-term visionleading up to its 100^th anniversary in 2032, and the Company hasbeen implementing its "Mid-Term Management Plan 2025" covering thefiscal years 2023–2025. Under this plan, Topcon has pursued sustainablebusiness growth and improved profitability by deepening its orientation towardscustomers, and as the next step, the Company aims to evolve into "New Topcon 2.0," a business structure that will further accelerate the competitiveness of the Topcon Group. In particular, to transform its eye carebusiness from a hardware-based business to a solutions business, and to achievefurther growth in its positioning business, where the competitive environmentis rapidly changing, the Company believes that bold, long-term investments andfundamental transformations beyond conventional business reforms are necessary.

Following an in-depth evaluation of alloptions, Topcon concluded that a management buyout in strategic partnershipwith KKR and JICC offers the Company the best path to achieve its long-term objectivesand enhance its corporate value to benefit all stakeholders, includingshareholders. Topcon's competitive edge lies in thecombination of its advanced hardware design and manufacturing capabilities,rooted in Japanese craftsmanship, and its rapidly growing solutions business,particularly in the United States. Topcon believes that it is essential to develop anagile corporate structure to undertake bold investments and implement long-terminitiatives. As a private company, the strategic partnership and patientcapital support from KKR and JICC will enable Topcon to stay agile, undertakethe bold investments and implement the long-term initiatives needed to accelerateits growth and strengthen its competitiveness. Topcon's current management teamwill continue to operate the Company and work with its shareholders toimplement management initiatives to efficiently and quickly achieve itslong-term goals.

Additionally, Topcon leverages itscutting-edge optical technology to develop and manufacture products for thespace and defense industry, which is critical to Japan's national security.Therefore, JICC's investment will help the Company to develop these businessareas and increase its value in the long term.

For KKR, Japan is a key market for its Asia Pacific and global strategy; it has around $18 billion in assets undermanagement in the country. In the ophthalmology sector related to Topcon’sbusiness, KKR has a long track record, including National Vision, anoptical retailer in the US; nexeye, a provider of value-for-money eyecare in Europe; and Lenskart, an omni-channel eyewear retailer in India,and in the adjacent construction and civil engineering fields within theindustrial sector, Geo Stabilization International, a provider ofgeohazard mitigation solutions and roadway safety services in the US. KKR looksto support Topcon’s growth after the privatization by leveraging its globalnetwork, deep operational expertise and investment experience in the ophthalmology,healthcare, and industrial sectors to share best practices and help Topcon expandinternationally, including in the US, a priority market.

JICC, as a government-affiliated fund,has built deep public-private networks and operational know-how through extensiveinvestment experience in Japan and overseas. JICC will support Topcon'stransformation into a global solutions company centered on its eye carebusiness, which will contribute to the creation of new industries andstrengthen international competitiveness, and JICC will support this due to itspolicy significance. In particular, JICC's long-term, neutral funds will be essentialto support Topcon’s long-term structural reforms and growth strategies. Also,JICC will complement KKR’s private markets expertise, with this combination ofpublic and private funds providing medium- to long-term risk sharing and strongcapital and credit alignment.

Takeshi Eto, President and CEOof Topcon, said“Today’s announcement represents a crucial step in realizing “Topcon 2.0” and inachieving our long-term vision and to drive future growth. Strategically partneringwith KKR and JICC will enable us to focus on bold, agile investments andmanagement initiatives, including structural reforms, without being constrainedby potential short-term uncertainties. I am confident that our close alignment betweenthe management team and our future shareholders for this MBO will enable us toaddress mid- to long-term challenges together, implement management initiativesmore effectively, and accelerate our business expansion.”

Hiro Hirano, Deputy Executive Chairman of KKR Asia Pacific and CEO of KKR Japan, said, “Wehave long admired Topcon’s strong product offering and are delighted to havethe opportunity to invest behind their long-term global ambitions. Aslike-minded strategic partners, we are also pleased to join forces with JICC,who possess a deeply unique understanding of Japan and Topcon’s criticalsectors and equal commitment towards the Company’s success. We look forward tocollaborating closely with Mr. Eto and his talented management team and JICC tohelp Topcon accelerate its growth, including through our global network ofindustry experts and portfolio companies, and achieve its goal of becoming aleading global solutions company.”

Shogo Ikeuchi, President and CEO of JIC Capital, said, “This transaction and jointinvestment with KKR marks a significant milestone for JICC. We believe thatthis strategic partnership between our three companies will certainly enhancethe stability of Topcon's management, while at the same time paving the way for KKR to contribute significantly to Topcon's business. KKR has unique strengthsthat other investors and companies cannot achieve, and by making the most of KKR's outstanding strategic insights and resources, we are confident that Topcon will be able to achieve sustainable, stable growth and strengthen itsleadership in the global market. Topcon is an excellent example of Japan’smanufacturing prowess, and JICC aims to be a strong partner for Topcon to continueto grow its business in Japan and achieve its bold corporate strategy totransform from a hardware company to a global solutions business withsignificant overseas growth.”

Thetender offer is expected to commence around the end of July 2025,subject to the satisfaction or waiver of certain conditionsprecedent, including regulatory approvals in Japan and other jurisdictions. Fordetails regarding the conditions of the commencement of the tender offer,please refer to the full text of the release issued by the Offeror todaytitled, “Notice Regarding the Planned Commencement of Tender Offer for the Shares of Topcon Corporation (Securities Code: 7732) by TK Co., Ltd. as part ofthe MBO Implementation and Capital Participation by KKR and JICC.”

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Forward-looking Statements

This press release should beread in conjunction with the release issued by the Offeror today titled “Notice Regarding the Planned Commencement of Tender Offer for the Shares of Topcon Corporation (Securities Code: 7732) by TK Co., Ltd.as part of the MBO Implementation and Capital Participation by KKR and JICC”.

Thepurpose of this press release is to publicly announce the tender offer and ithas not been prepared for the purpose of soliciting an offer to sell orpurchase in the tender offer. When making an application to tender, please besure to read the Tender Offer Explanatory Statement for the tender offer andmake your own decision as a shareholder or share acquisition right holder. Thispress release does not constitute, either in whole or in part, a solicitationof an offer to sell or purchase any securities, and the existence of this pressrelease (or any part thereof) or its distribution shall not be construed as abasis for any agreement regarding the tender offer, nor shall it be relied uponin concluding an agreement regarding the tender offer.

Thetender offer will be conducted in compliance with the procedures andinformation disclosure standards set forth in Japanese law, and thoseprocedures and standards are not always the same as the procedures andinformation disclosure standards in the U.S. In particular, neither Sections13(e) or 14(d) of the U.S. Securities Exchange Act of 1934 (as amended; thesame shall apply hereinafter) or the rules under these sections apply to thetender offer; and therefore the tender offer is not conducted in accordancewith those procedures and standards. In addition, because the tender offer is acorporation incorporated outside the U.S., it may be difficult to exerciserights or demands against them that can be asserted based on U.S. securitieslaws. It also may be impossible to initiate an action against a corporationthat is based outside of the U.S. or its officers in a court outside of the U.S. on the grounds of a violation of U.S. securities-related laws.Furthermore, there is no guarantee that a corporation that is based outside ofthe U.S. or its affiliates may be compelled to submit themselves to thejurisdiction of a U.S. court.

Unlessotherwise specified, all procedures relating to the tender offer are to beconducted entirely in Japanese. All or a part of the documentation relating tothe tender offer will be prepared in English; however, if there is anydiscrepancy between the English-language documents and the Japanese-languagedocuments, the Japanese-language documents shall prevail.

Thispress release includes statements that fall under “forward-looking statements”as defined in Section 27A of the U.S. Securities Act of 1933 (as amended) and Section 21E of the Securities Exchange Act of 1934. Due to known or unknownrisks, uncertainties or other factors, actual results may differ materiallyfrom the predictions indicated by the statements that are implicitly orexplicitly forward-looking statements. Neither the Offeror nor any of itsaffiliates guarantee that the predictions indicated by the statements that areimplicitly or expressly forward-looking statements will materialize. Theforward-looking statements in this press release were prepared based oninformation held by the Offeror as of today, and the Offeror and its affiliatesshall not be obliged to amend or revise such statements to reflect futureevents or circumstances, except as required by laws and regulations.

The Offeror, its and the Company’s respective financial advisors and the tenderoffer agent (and their respective affiliates) may purchase the common sharesand share options of the Company, by means other than the tender offer, orconduct an act aimed at such purchases, for their own account or for theirclient’s accounts, including in the scope of their ordinary business, to theextent permitted under financial instrument exchange-related laws andregulations, and any other applicable laws and regulations in Japan, inaccordance with the requirements of Rule 14e-5(b) of the U.S. Securities Exchange Act of 1934 during the tender offer period. Such purchases may beconducted at the market price through market transactions or at a pricedetermined by negotiations off-market. In the event that information regardingsuch purchases is disclosed in Japan, such information will also be disclosedon the English website of the person conducting such purchases (or by any othermethod of public disclosure).

Ifa shareholder exercises its right to demand the purchase of shares of less thanone unit in accordance with the Companies Act, the Company may buy back its ownshares during the tender offer period in accordance with the proceduresrequired by laws and regulations.

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■ About Topcon Corporation

Topcon Corporation is a global leaderin the manufacturing of technology designed to address the essential challengessociety faces in healthcare, agriculture, and infrastructure. Topconspecializes in developing optical, sensing and control solutions powered byleading digital transformation technologies for these industries. For moreinformation about Topcon (Tokyo Stock Exchange: 7732), visit: www.global.topcon.com

 

■ About KKR

KKR is a leading global investment firm that offers alternativeasset management as well as capital markets and insurance solutions. KKR aimsto generate attractive investment returns by following a patient anddisciplined investment approach, employing world-class people, and supportinggrowth in its portfolio companies and communities. KKR sponsors investmentfunds that invest in private equity, credit and real assets and has strategicpartners that manage hedge funds. KKR’s insurance subsidiaries offer retirement,life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR’s investments may include the activities of itssponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com. For additional information about Global Atlantic Financial Group, please visit Global Atlantic Financial Group’swebsite at www.globalatlantic.com.

 

■ About JIC Capital

JIC Capital aims to supply risk capital to achieve policyobjectives of creating new businesses and industries to realize Society 5.0,promoting business portfolio transformation for enhancing the internationalcompetitiveness, and establishing next-generation social infrastructure topromote Digital Transformation (“DX”).