Turpaz Industries Ltd.

M&A Activity • Sep 18, 2022

This is an English translation of a Hebrew immediate report that was published on September 18, 2022 (reference no.: 2022-01-118207) (hereafter: the "Hebrew Version"). This English version is only for convenience purposes. This is not an official translation and has no binding force. Whilst reasonable care and skill have been exercised in the preparation hereof, no translation can ever perfectly reflect the Hebrew Version. In the event of any discrepancy between the Hebrew Version and this translation, the Hebrew Version shall prevail.

Turpaz Industries Ltd. (the "Company")

Company number: 514574524 Address: Halahav 2 Holon Tel: 03-5560913; Fax: 03-5560915

September 18, 2022

To: To: Reported Via Magna Reported Via Magna

Israel Securities Authority ("ISA") Tel Aviv Stock Exchange Ltd. ("TASE")

Re: Acquisition of control in a fragrance company in the USA (Klabin)

Turpaz Industries Ltd. ("Tupraz") is honored to announce that on September 16, 2022, via Turpaz USA¹ , its wholly owned subsidiary, it signed an agreement to purchase 81% of the issued and paid-up share capital and voting rights in Klabin Fragrances, Inc. ("Klabin"), a private company incorporated in the USA, from its shareholders, in exchange for a total of 24.3 million USD. The afore mentioned consideration is subject to adjustments according to Klabin's business performance during the year 2022. Completion of the transaction is expected in the coming weeks. The Company intends to finance the transaction partly from independent sources and partly from bank financing, the scope and terms of which have not yet been decided as of the date of the report.

The agreement includes options (put/call) for the purchase of the remaining shares of Klabin by Turpaz, exercisable starting January 1, 2026, for a period of one year, until December 31, 2026. The exercise price of the option is based on the business performance of the combined operations of Klabin and Turpaz USA in the field of fragrance extracts in the USA, during a period beginning on January 1, 2023, until the date of exercise of the option.

Klabin's managers and its founders, Saul and Justin Klabin, will continue to manage and lead Klabin's activities in the coming years, as well as the activities of Turpaz USA in the field of fragrance extracts

¹ Turpaz Fragrances and Flavors Inc.

in the USA, which will be united as mentioned with Klabin, and will join the management team of the Turpaz group.

Klabin, founded in 1994 and began operations in 1998, engages in research, development, production, marketing, sale and supply of custom fragrance, natural oil blends, extracts, natural and synthetic ingredients, raw materials, applications and functional solutions for the cosmetics, toiletries, candles, body and hair care, diffusers, diffusers, detergents and fine fragrances markets.

The purchase of Klabin is a strategic acquisition for Turpaz in the USA, which enables the expansion of the group's portfolio of products and customers in the field of fragrances extracts, whilst leveraging synergies between the group's companies in development, procurement, marketing and sales. Klabin's activities, which will be merged with Turpaz's acitivites in the USA, will strengthen the position of Turpaz as a major player in the field of fragrances in the USA.

According to the financial data the company received from Klabin, based on its unaudited financial statements, for the years 2020 and 2021, Klabin's revenue cycle amounted to 9.9 million USD and 9.7 million USD respectively, the EBITDA amounted to 2.6 million USD and 2.4 million USD respectively, the total assets amounted to 2.5 million USD and 2.6 million USD respectively, with total liabilities amounting to 1.1 million USD and 0.7 million USD respectively.

Respectfully,

Turpaz Industries Ltd.

By: Karen Cohen Khazon, CEO and Chairperson.