Q-Free ASA — M&A Activity 2014

Apr 23, 2014

Q-Free acquires Traffic Design in Slovenia and strengthen its ATMS business

Q-Free acquires Traffic Design in Slovenia and strengthen its ATMS business

Trondheim/Oslo 23 April 2014: Q-Free ASA signed on 22 April a share

purchase agreement for the acquisition of Traffic Design d.o.o. for a

cash and equity consideration of EUR 2.3-3.6 million pending future

financial performance. Traffic Design is the market leader in traffic

management, parking systems and tolling in Slovenia. Following the

recent acquisition of TDC Systems in the UK, the acquisition reflects a

continuation of Q-Free's strategy to strengthen its business within

Advanced Transportation Management Systems (ATMS).

Traffic Design d.o.o. was established in 1990 in Ljubljana, and is the

market leader with nationwide traffic management systems, more than 60

parking systems, and operations of the entire tolling system in

Slovenia. Traffic Design reported revenues of EUR 2.1 million and an

EBIT of EUR 0.51 million in 2013, and will be consolidated into the

accounts of Q-Free as of the second quarter 2014.

The transaction is net of cash and bank debt. Q-Free will pay an initial

consideration of EUR 2.3 million, of which 91 percent in cash and 9

percent through issuance of 121,686 new shares in Q-Free at NOK 14 per

share. The Board of Directors will as soon as possible issue new shares

in Q-Free under existing authorisation given by the General Meeting.

Further consideration is estimated to EUR 0.8 million, assuming EBIT

growth to EUR 0.66 million in 2014 and EUR 0.74 million in 2015. The

earn-out consideration is capped at EUR 1.3 million, assuming EBIT

growth to EUR 1 million in 2014 and 1.1 million in 2015. The earn-out

consideration will also be at least 91 percent payable in cash and up to

9 percent in new shares, payable in 2015 and 2016.

- The inclusion of Traffic Design's products and solutions into our

portfolio is a further important step towards realising our ambitions in

the Intelligent Traffic Systems market. Traffic Design strengthens both

our ATMS business and our already leading position in the Road User

Charging market, says CEO Thomas Falck in Q-Free.

Q-Free has acquired a series of ATMS companies over the past 18 months,

including TCS International in the US and Canada, Elcom in Serbia, TDC

Systems in the UK, and the 10 percent strategic investment in US-based

Intelight. The acquisition of Traffic Design provides further synergies

in the process of broadening Q-Free's product range.

- Traffic Design has historically been operating in local markets, with

limited access to international customers. Joining forces with Q-Free

will enable a global reach for our products, which we believe is a

unique possibility for Traffic Design. We are impressed with Q-Free's

employees and products, and are looking forward to working on the same

team in the future, says CEO Blaz Gostisa in Traffic Design.

In the longer-term, Q-Free expects that the markets for ATMS and Road

User Charging will converge into a joint market for Intelligent

Transport Systems (ITS) - both technologically and commercially. Q-Free

intends to play an important role in this market, and considers Traffic

Design's products, solutions and services as a strong addition to its

product offering.

For further information, please contact:

CEO Thomas Falck, cell: +47 468 00 767

CFO Roar Østbø, cell: +47 932 45 175

About Q-Free:

Q-Free is a leading global supplier of products and solutions for Road

User Charging and Advanced Transportation Management. The company has

approximately 350 employees, offices in 17 countries and is represented

on all continents. The headquarter is based in Trondheim, Norway. Q-Free

is listed on the Oslo Stock Exchange with the ticker QFR.

www.q-free.com

Twitter: @Q-FreeASA

About Traffic Design:

Traffic Design is a privately held company focusing on development,

integration and implementation of Intelligent Transport Systems (ITS).

The company has 14 employees and is located in Ljubljana, Slovenia.

Traffic Design's offerings include:

Traffic Management; ITS Central Management SW Systems, integrations of

CCTV, VMS, radar and vehicle Classification, Video Detection, Microwave

Technologies, Weather stations and Info-mobility in road infrastructure.

Parking Systems; end-to-end solutions for on-street parking management

and parking garages.

Tolling systems; combines the development and integration of toll

technology applications for ETC, Contactless Chip card payment and

manual payments in the 28 Toll plazas in Slovenia.

www.traffic-design.si