EXPERIENCE CO LIMITED — Capital/Financing Update 2016

Jun 19, 2016

==> picture [154 x 77] intentionally omitted <==

20 JUNE 2016

SKYDIVE THE BEACH GROUP LIMITED (ACN 167 320 470)

(ASX: SKB)

ASX ANNOUNCEMENT

PROPOSED ACQUISTION OF SKYDIVE WANAKA

A$15 MILLION INSTITUTIONAL PLACEMENT

AFFIRMATION OF FY16 EARNINGS GUIDANCE

Highlights

• Skydive to acquire Skydive Wanaka ( Wanaka ), one of New Zealand’s leading jump sites

• Materially earnings accretive on an annualised basis

• Enhances Skydive’s market leading position with another major established New Zealand growth business

• Significant strategic advantage, synergies and cost savings

• Institutional Placement to raise A$15million, completed oversubscribed

• Skydive affirms its FY16 earnings guidance

1. Proposed Acquisition of Skydive Wanaka

Skydive the Beach Group Limited (‘SKB’, ‘the Company’, ‘Skydive’), Australia and New Zealand’s leading skydiving adventure tourism company, is pleased to announce that it has entered into a conditional agreement to acquire Skydive Wanaka ( Wanaka ), one of New Zealand’s leading jump sites located on the South Island, a one hour drive from Skydive’s ‘NZone’ at Queenstown, New Zealand’s premier skydiving operation

Skydive will acquire 100% of Wanaka for NZ$10.4 million (A$9.7 million)[1] , representing a multiple of 4.5 times Wanaka’s FY16 EBITDA[2] .

Skydive expects the acquisition to be materially earnings accretive on an annualised basis.

Wanaka is growing strongly with 24% 2 year CAGR in tandem skydives, and with 14,511 tandems in FY16.²

The agreement is expected to complete on 1 July. It is conditional on satisfactory due diligence and it contains escrow provisions to support warranties and to provide an incentive payment of NZ$400,000 if Wanaka achieves 17,000 tandem skydives in FY17.

Wanaka will not only enhance Skydive’s portfolio of assets and drop zones, it will also deliver a specific strategic advantage and many cost savings and synergies of scale because it is close to Skydive’s NZone operations in Queenstown.

Wanaka is only an hour’s drive from Skydive NZone, but the microclimates are quite different. When the weather prevents skydiving at Skydive NZone in Queenstown, it is often possible to skydive at Wanaka.

Skydive is acquiring an additional high capacity aircraft and 3 luxury coaches to transport Queenstown tandem jumpers to Wanaka so that these jumps can be completed and not cancelled on poor weather days, and vice-versa where required.

www.skydive.com.au info@skydive.com.au T: 1300 663 634 F: 1300 338 803

Skydive the Beach Group Limited ABN 56 167 320 470 PO Box 5361 Wollongong NSW 2500

==> picture [154 x 77] intentionally omitted <==

2. A$15 million Institutional Placement

To fund the acquisition, Skydive undertook an institutional Placement to sophisticated and institutional investors to raise A$15 million, which was completed on Friday 17 June.

The Placement was strongly oversubscribed.

The proceeds will be used as follows:

• A$9.7m acquisition of Skydive Wanaka

• A$2.4m acquisition of a new aircraft

• A$1.1m acquisition of 3 luxury coaches to bus customers between Queenstown and Wanaka

• A$1.8m costs of the Placement, due diligence and working capital

3. Affirmation of Earnings Guidance

Skydive affirms its earnings guidance for FY2016.

As outlined in its 1H16 results presentation, Skydive expects to achieve revenues of $54.9 million and EBITDA of $13.5 million for FY16, provided weather conditions remain normal and estimated jumps are completed.

Skydive also affirms its intention to continue its dividend of circa 1 cent per annum, payable in October.

4. Comments

Anthony Boucaut, CEO of Skydive said:

“The Skydive Wanaka acquisition strengthens Skydive’s position in the New Zealand market with another expanding and complementary New Zealand skydiving business with even stronger growth potential. It adds more international assets as part of our goal to become the leading global adventure tourism company. We will continue to pursue growth opportunities in adventure tourism.”

Anthony Ritter, CFO of Skydive, commented:

“Skydive Wanaka would be an outstanding acquisition by itself. But the strategic advantages, cost savings and synergies inherent in combining it with NZone in Queenstown will turbo-boost our New Zealand operations”.

5. Skydive Wanaka

Skydive Wanaka was established in 1995 and is a multi award-winning skydiving business having completed more than 100,000 tandem jumps.

It has:

• strong market position, reputation and brand

• 45 employees

• its own premium aircraft

• long-term airfield and hanger leases

• no debt

• excellent operating culture with quality systems and procedures

• engaged current owners who have strongly grown the business since 2013

www.skydive.com.au info@skydive.com.au T: 1300 663 634 F: 1300 338 803

Skydive the Beach Group Limited ABN 56 167 320 470 PO Box 5361 Wollongong NSW 2500

==> picture [154 x 77] intentionally omitted <==

1Exchange rate of AUDNZD of 1.07 used throughout the release

2Wanaka’s financial statements are unaudited, EBITDA refers to the Wanaka’s ‘normalised EBITDA’ for FY16, and its FY16 year end was 31 March 2016.

- ENDS -

CONTACT

ANTHONY RITTER

COMPANY SECRETARY

T 1300 663 634

E COMPANYSECRETARY@SKYDIVE.COM.AU

Skydive the Beach Group Limited (“SKB”) is an adventure tourism and leisure company. It provides tandem skydiving experiences in scenic locations across four Australian states. From origins in 1999, it has become a profitable business with a track record of earnings growth. In March 2015, SKB successfully completed an initial public offer (IPO) and listed on the Australian Stock Exchange. The offer was oversubscribed and raised $25 million. The acquisition of Australia Skydive Pty Ltd added an additional 5 drop zones and 2 more were added in the NZone Skydive acquisition in October 2015.

www.skydive.com.au info@skydive.com.au T: 1300 663 634 F: 1300 338 803

Skydive the Beach Group Limited ABN 56 167 320 470 PO Box 5361 Wollongong NSW 2500