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Benesse Corporation (Headquarters: Okayama) has concluded a capital and business alliance related to Tetsuryokukai, an entrance exam prep school that caters to students seeking to enter such elite universities as the University of Tokyo. This prep school is jointly operated by IG Partners Co., Ltd. (Headquarters: Shibuya Ward, Tokyo) and Family Co., Ltd. (Headquarters: Nishinomiya, Hyogo Prefecture). Under the terms of the alliance, Benesse will acquire 80% of each operating companyﾂ's outstanding stock with the intention of pooling resources to increase corporate value and customer satisfaction.

1.Reasons for stock acquisition
Benesse Corporationﾂ's Education Group provides correspondence courses as well as support for schools and teachers. Core products include Kodomo Challenge, targeting pre-school children; Shinkenzemi, for schoolchildren from elementary to high school; and Shinken Simulated Exams, mock university entrance exams offered in high schools.

The Japanese school system and university entrance process are undergoing major change, spurring Benesse to action. In October 2006, the Company acquired Ochanomizu Seminar Co., Ltd., a leading exam prep school for students targeting elite private universities. Then, in June 2007, Benesse acquired Tokyo Individualized Educational Institute, Inc., a major prep school company providing tailored learning programs. These acquisitions enable the Company to supply products and services that cater to diversifying customer needs, which should boost its educational brand image and make prep school operations into a second pillar of the Education Group.

Since its founding in 1983, Tetsuryokukai has made a name for itself prepping students for entrance exams to the University of Tokyo and other elite universities. For more than 20 years the school has produced steady growth and outstanding results, especially in terms of the number of its students gaining entry to the University of Tokyo. Tetsuryokukai has many exceptional teachers among its staff, and, supported by both its students and their parents, it has retained a strong brand.

Benesse has long been interested in Tetsuryokukai due to its unparalleled track record in educational services for the high-end market. Believing that the two companies can increase corporate value and improve customer satisfaction via efficient pooling of management resources, Benesse and Tetsuryokukai entered into discussions regarding a capital and business alliance.

As a result, the parties agreed to cooperate in enhancing Tetsuryokukaiﾂ's corporate value and brand image while preserving its existing brand value and management policy. A contract was signed to that effect on November 30, 2007.

Specific areas for development will be identified going forward, but these are expected to include a number of initiatives leveraging Tetsuryokukaiﾂ's resources: support for top students in rural areas; pursuit of educational material and curriculum synergies; effective use and sharing of university placement information; and collaboration on English-language teaching and expanded overseas operations, including support for students wishing to study at top universities and graduate schools outside Japan.

Benesse in turn expects to benefit significantly from synergies with Tetsuryokukai. The Company hopes to generate further competitive advantages via Tetsuryokukaiﾂ's resources, and to increase the added value of its existing businesses by leveraging the schoolﾂ's outstanding staff and curriculum.

The cooperation of current Tetsuryokukai management is vital to achieving the above objectives. The parties therefore agreed that current management will remain in place.

2. Impact on fiscal 2007 results
This alliance will have minimal impact on Benesseﾂ's consolidated results for the fiscal year ending March 31, 2008. There will accordingly be no revisions to fiscal 2007 performance forecasts.