Nekkar — M&A Activity 2016

Jun 19, 2016

STATEMENT FROM THE BOARD OF DIRECTORS

The Board recommends the offer from Palfinger Marine GmbH

This statement is made by the Board of Directors (the "Board") of TTS Group ASA (the "Company") in connection with the voluntary offer by Palfinger Marine GmbH (the "Offeror") to acquire all the shares in the Company, announced on 19 June 2016 (the "Offer").

The Oslo Stock Exchange may pursuant to section 6-16 (4) of the Norwegian Securities Trading Act decide that a third party shall give the formal statement where a bid has been made in concert with the board of the company. Accordingly, this statement does not serve the purpose of being the formal company statement to be issued in accordance with section 6-16 (1) of the Securities Trading Act.

After careful consideration of the terms and conditions of the Offer, the Board has unanimously resolved to recommend that shareholders of the Company accept the Offer. The Board has based its recommendation on an assessment of factors the Board has deemed relevant in relation to the Offer, including, but not limited to its assumptions regarding the Company's business and financials, strategic alternatives available for the Company as well as shareholder matters. The Board has also taken into account the fact that shareholders representing a majority of the shares in the Company, including the Skeie family, Rasmussengruppen AS, Holberg Norge, Barrus Capital AS and Skagen Vekst, supports the Offer by having preaccepted it.

The price of NOK 5.60 per share of the Company (the "Offer Price") values the Company's outstanding shares at approximately NOK 485 million. Including the bonds that will be converted into shares in the Company as part of completion of the Offer, the Offer Price values the Company's shares (including such converted shares) at approximately NOK 600 million.

The Offer Price represents a premium to the historic price and volume weighted average price of the Company's shares as follows:

Last close: 65% Last 3 months: 76% Last 6 months: 94% Last 12 months: 83%

The Board has received a recommendation from its financial adviser Pareto Securities AS which concludes that the Offer represents an attractive consideration to all the shareholders of the Company from a financial point of view. As described above, the Company will appoint an independent adviser to issue a fairness opinion on the Offer in accordance with section 6-16 (4) of the Norwegian Securities Trading Act and the Norwegian Corporate Governance Code, subject to approval by the Oslo Stock Exchange.

In reaching its conclusion to recommend the Offer, the Board has also considered the positive effects the Offer might have for the other stakeholders of the Company, including employees, customers and business partners. The Board recognizes that the Offeror as a leading global producer of lifting solutions on commercial vehicles and ships, and to be in a strong position to develop the businesses of the Company further. The Board is of the opinion that both the Offeror and the Company stand to benefit from strong industrial and strategic integration and cross-selling of their respective products and capabilities.

With respect to employees, the Board notes that the Offeror has informed that a change of ownership is not expected to have any legal, economic or work related effects for the employees of the Company in relation to the Offer.

Furthermore, the Board has taken into account that shareholders, including members of the Board and CEO holding shares in the Company, representing 67% of the shares in the Company has pre-accepted the Offer and the consequences this will have for the liquidity of the shares in the future as well as the potential "lock-in" of non-selling shareholders. Further, the Board has also taken into account that 65.5% of the bondholders under the Company's existing bond loan support the Offer by having agreed to convert their bonds to shares and transfer such shares issued upon conversion to the Offeror. This implies that 66.3% of the fully diluted shares in the company have pre-accepted the Offer. The Board has also taken into account that the transaction likely will strengthen the Company's long term financing.

As provided for in the Norwegian Securities Trading Act, if the Offeror becomes the owner of the shares in the Company representing more than 90% of the total number of shares issued by the Company, the Offeror will have the right to commence a compulsory acquisition for cash of the shares not already owned by the Offeror. The Board notes that the Offeror intends to make such compulsory acquisition following completion of the Offer. The condition of 90% acceptance level may, however, be waived by the Offeror, implying that non-selling shareholders have a potential risk of "lock-in". In this respect, the Board also notes that if the Offeror no longer considers the listing of the shares in the Company on the Oslo Stock Exchange appropriate, the Offeror may propose to the general meeting of the Company that the Company shall apply for delisting of its shares from the Oslo Stock Exchange. Further, that the Offeror intends to propose to the general meeting of the Company that an application shall be made to the Oslo Stock Exchange to delist the shares in the Company from the Oslo Stock Exchange in the event the Offer is completed. An application to delist the shares in the Company would require the approval by 2/3 majority of votes cast and the share capital represented at such general meeting.

The Board also notes that CEO Toril Eidesvik and the board members Trym Skeie, Bjarne Skeie and Gisle Rike in their capacities as direct and indirect shareholders in the Company, are positive to the Offer and have pre-accepted the Offer for all their shares in the Company. None of the members of the Board or executive members of the executive management of the Company or close associates of such individuals has any current or recent affiliation with the Offeror. As part of the transaction agreement and subject to the Board's fiduciary duties, the Board has undertaken not to solicit offers from third parties and to inform the Offeror of any competing proposals.

The Company has entered into a transaction agreement with the Offeror, governing certain matters relating to the process, conduct of business and material aspects of the Offer. The Board would like to make the shareholders aware that the Board has undertaken only to amend or withdraw its recommendation of the Offer on certain terms and conditions.

Based on an overall evaluation of relevant factors, taking into account the Offer Price and other terms of the Offer, the Board has found the Offer made by the Offeror to be in the best interests of the Company and unanimously recommends its shareholders to accept the Offer.

Bergen, 19 June 2016

The Board of Directors of TTS Group ASA