Akastor — M&A Activity 2016

Oct 3, 2016

Appendix:

This appendix forms part of the stock exchange announcement of October 3, 2016 and is prepared in accordance with the requirements of the Oslo Stock Exchange Continuing Obligations section 3.4.

The transaction

Akastor has entered into a definitive agreement to sell all shares in Frontica Business Solutions AS, a wholly-owned subsidiary of Frontica Group AS ("Frontica Group"), to Cognizant for a cash consideration of NOK 1,025 billion on a debt and cash-free basis (enterprise value). The agreed purchase price will be adjusted for actual net debt and working capital as per closing of the transaction.

The completion of the transaction is subject to customary closing conditions, including regulatory competition filing in Norway. The transaction is expected to close during Q4 2016.

Description of Frontica Business Solutions

Frontica Business Solutions is global provider of ITO and BPO services to the oil and gas sector. The ITO division delivers services for IT infrastructure and workplace, application management and software development, as well as consulting services. The BPO division offers transaction finance, HR and payroll services. The business units in scope on the transaction have about 570 employees, with offices in Norway, UK, USA, Brazil and Malaysia. The Company has a global delivery model, serving clients in more than 20 countries worldwide.

In recent years, Frontica has embarked on a transformation agenda to shift the company from a predominantly internally-focused shared service unit to becoming a broader commercial provider of ITO and BPO services within the oil and gas industry. Cognizant, a leading provider of information technology, consulting, and business process services, aims to accelerate Frontica's transformation process and expand its business into new segments and geographies going forward.

Business units in scope of transaction

Cognizant will acquire all the shares in Frontica Business Solutions AS, which is owned by Frontica Group AS. Frontica Group AS, including its wholly owned subsidiary Frontica Advantage Group AS, is not included in the transaction.

During 2015 and 2016, Frontica Business Solutions has streamlined its service offering and discontinued or reduced the scope of certain services, including facility management and administrative / secretarial services.

Key financials

Key financials for Frontica Business Solutions are summarised in following table. Please note that the figures have been adjusted to reflect the businesses in scope of the transaction. The operations outside of the scope of the transaction, such as facility management, are not included in the figures.

NOKm	FY13	FY14	FY15	H1 15	H1 16
Revenues	1,598	1,654	1,488	767	667
EBITDA	153	178	98	62	57
EBIT	80	105	16	23	14
Capex	110	70	34	24	5
Total assets	830	1,271	1,012	1,132	593

Executive management and Board of Directors

The current management team of Frontica Business Solutions is

• Niels Didrich Buch, CEO
• Truls Gjestvang, CFO
• Morten Søgård, SVP and Head of Business Development and Strategy
• Tom Jetteng, SVP and Head of ITO
• Eirik Huseby, SVP and Head of BPO
• Ina T. Pettersen, VP and Head of HR
• Tore Mortensen, VP and Head of Operations

The management of Frontica Business Solutions AS is also the management of Frontica Group AS, which has 0 employees. In addition, Jens M. Mellbye, CEO of Frontica Advantage Group AS, is part of the Frontica Group management team. The current management team will continue as part of Frontica Business Solutions.

Other than customary retention arrangements for defined senior employees in order to secure orderly and fast completion and transition of the transaction, no agreements have been entered into or are expected to be entered into in connection with the transaction.

The current Board of Directors of Frontica Business Solutions AS comprises Niels Didrich Buch, Truls Gjestvang, Morten Søgård, Ina T. Pettersen, Siv Kristin Hestad, Jan Kåre Fjeldstad, Stian Haugland and Ingvill Gierløff, who are all employees of Frontica Business Solutions. The buyer will appoint a new Board of Directors as of closing.

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This release may include forward-looking information or statements and is subject to our disclaimer, see http://www.akastor.com/Terms-of-use/