Basic Net SpA

M&A Activity • Apr 1, 2022

PRESS RELEASE - The BasicNet Group acquires 100% of K-Way France.

K-Way S.p.A. signed yesterday evening an agreement to fully acquire K-Way France S.a.s, the K-Way® brand licensee company in France, operating in the country through a network of mono-brand, direct and franchising stores, alongside a distribution network of selected multi-brand stores.

The French company reported revenues of over Euro 27 million in 2021 and a net profit of Euro 6.4 million, shareholders' equity of Euro 11.8 million, and a positive net financial position of Euro 6.7 million (*) .

As previously disclosed in the press release at December 23, 2021, the agreed purchase consideration includes a fixed and a variable component.

The fixed component to be settled upon closing, expected by the end of April 2022, amounts to Euro 19.8 million.

The variable component ("earn-out") shall be determined as a portion of K-Way France's net profits in the 2022-2025 period and shall be paid at pre-established maturities between 2023 and 2026.

The overall cost of the investment is preliminarily estimated at approx. Euro 33 million.

The financial commitment required for the acquisition shall be supported by existing credit lines, in addition to expected Group cash generation.

The acquisition will allow the Group to further consolidate the growth of the K-Way® brand in one of its main markets and also the country where the brand was created in the mid-1960's.

"I am very glad when a long and passionate entrepreneurial story joins ours - stated Chairman and Founder of BasicNet Marco Boglione – Robert [Dodd] and all his team made an unbelievable job repositioning in just ten years the K-Way® Brand in its home market, starting from scratch. It has been a great experience, both from a human and professional point of view, in line with the Group's philosophy and business model. I believe that K-Way France could not have better foundations and a better management team to go for the next investment stage towards growth and consolidation of the Brand".

Turin, April 1st, 2022

(*): before application of IFRS16