Componenta Oyj — M&A Activity 2019

May 16, 2019

Componenta to acquire Komas Oy and become the leading metal component manufacturer in Finland

Componenta to acquire Komas Oy and become the leading metal component manufacturer in Finland

Componenta Corporation Stock Exchange Release, Insider Information, 16 May 2019
at 8.00

Componenta Corporation (“Componenta”) has signed an agreement on purchasing the
shares and capital loans of Komas Oy (“Komas”), a machining operation company,
from funds managed by CapMan, Fortaco Oy and certain private persons. Komas is a
manufacturer of machined components, forged blanks, hydraulic pipes and plate
cuttings. In 2018, Komas had net sales EUR 44.9 million according to Finnish
Accounting Standards (FAS) and EBITDA of EUR 2.0 million (FAS). At the end of
2018, the company employed 313 people in Jyväskylä, Härmä, Kurikka, Leppävesi
and Sastamala. Key customers of Komas include major international OEMs of
machinery and equipment. According to the arrangement, the entire purchase price
is paid with the shares of the Componenta Corporation.

Componenta CEO Harri Suutari:

“The acquisition of Komas expands Componenta’s range of products and services
and improves the quality of our customer service by creating a one-stop-shop for
industries purchasing cast and machined components. A large number of our
customers wish to purchase the casting and the related services as a ready-made
component from a single supplier. Componenta and Komas already have several
common customers with ideal prerequisites for cooperation. The acquisition of
Komas will improve the level of expertise within the Group and expand our
presence in the Finnish market. Long distances between locations increase the
total cost of a product. By acquiring machining locations close to our
foundries, we are able to increase our competitiveness.

We have focused heavily on increasing profitability and carrying out measures
defined in the restructuring programme in recent years. We are determined to
continue this work while improving our customer service and establishing the
foundation for the profitable growth of Componenta.”

CapMan partner Jan Mattlin:

”Komas has significantly grown and developed during CapMan’s ownership and has
established a good position among its customers. In particular, we have focused
on measures that improve quality, delivery accuracy and operational efficiency.
Companies of sufficient scale and with professional management that are able to
offer added value to clients will, in my opinion, continue to succeed in this
industry. I see the acquisition as a good solution for Komas and the combination
with Componenta is a logical next step for the development of the operations. I
want to especially thank Komas’ management for their dedication over these past
years. Our journey continues as shareholders of Componenta.”

Purchase price

The purchase price of Komas consists of 60 million new shares issued by
Componenta, which is approximately 25.3% of issued Componenta Corporation shares
after the share issue or 24.3%, if all rights and privileges attached to shares
are considered. The purchase price is EUR 6.6 million if the closing price of
Componenta’s share on 15 May 2019, EUR 0.11, is used as share price. The final
purchase price is determined in accordance with the share price on the closing
date.

Componenta is planning to issue shares for the sellers of Komas as a form of
paying the purchase price. For this purpose, the company will convene an
Extraordinary General Meeting in order to authorise the Board of Directors to
decide on the share issue. Prospectus including pro forma information on the
impacts of the transaction is prepared for the listing of new shares. The
majority owners of Komas, i.e. the funds managed by CapMan and CapMan’s
portfolio company Fortaco Oy (“Majority Owners”) have in the share purchase
agreement undertaken not to exercise voting rights attaching their prospective
shares until the shareholding of the Majority Owners has decreased below 10%. In
accordance with the restriction the Majority Owners will abstain from exercising
the voting rights in the general meetings of Componenta to the extent that the
voting rights represent 50% or more of the votes represented in the general
meeting concerned.

Financial performance and situation of Komas Oy

The income statement and balance sheet of Komas Oy are displayed below in
accordance with the Finnish Accounting Standards (FAS).

INCOME STATEMENT

TEUR 1 January– 1 January–
31 December 2018 31 December 2017

Net sales 44,880 41,856

Changes in inventories of finished 342 292
goods and work in progress
Other operating income 339 175
Materials and services -22,468 -21,135
Personnel expenses total -14,644 -13,935
Depreciation, amortisation and -2,147 -2,008
write-down of non-current assets
total
Other costs of operations -6,442 -6,196
Operating result -140 -952

Financial income and expenses -753 -369
total
Operating result before -892 -1,320
appropriations and taxes

Net profit -892 -1,320

BALANCE SHEET

TEUR 31 December 2018 31 December 2017
EUR EUR
Assets

Non-current assets
Intangible assets total 926 641
Tangible assets total 6,834 7,526
Non-current assets total 7,760 8,167

Current assets
Inventories total 4,659 4,396
Short-term receivables 1,053 1,431
Cash and cash equivalents 31 816
Current assets total 5,743 6,642

Assets total 13,503   14,809

TEUR 31 December 2018 31 December 2017
EUR EUR

Liabilities and shareholders’
equity

Shareholders’ equity

Share capital 3 3
Other equity -8,560 -7,668
Total shareholders’ equity -8,558 -7,666

Liabilities

Capital loans 11,586 11,605
Other non-current liabilities 2,569 1,900
Total non-current liabilities 14,155 13,505
Total current liabilities 7,906 8,970
Liabilities 22,061 22,475

Total liabilities and 13,503 14,809
shareholder’s equity

The capital loans presented in Komas’ balance sheet are granted by the company’s
current owners. Componenta shall acquire these capital loans as part of the
acquisition. Componenta is planning to convert these capital loans into the
equity of Komas after the acquisition.

Closing of the transaction and its impact on Componenta

The closing of the transaction depends on the usual terms of business
acquisitions, including any possible approvals from authorities and the decision
on the share issue by the Extraordinary General Meeting. It is the intention of
the parties to conclude the transaction on 1 July 2019 and to consolidate Komas
and Componenta on the date of closing the transaction. Componenta will release a
separate announcement regarding the closing of the transaction.

The transaction is estimated to increase Componenta’s net sales by approximately
EUR 20 million in 2019, provided that the closing of the transaction on 1 July
2019. The transaction is also estimated to have a positive impact on
Componenta’s EBITDA.

COMPONENTA CORPORATION
Harri Suutari
President and CEO

For further information, please contact:

Harri Suutari
President and CEO
tel. +358 10 403 2200

Marko Karppinen
CFO
tel. +358 10 403 2101

Componenta is an international technology company. Componenta specializes in
supplying cast and machined components to its global customers, who are
manufacturers of vehicles, machines and equipment. The company’s share is listed
on Nasdaq Helsinki.