Q-Free ASA — M&A Activity 2014

Mar 27, 2014

Q-Free acquires TDC Systems and strengthens its ATMS business

Q-Free acquires TDC Systems and strengthens its ATMS business

Trondheim/Oslo, 27 March 2014: Q-Free ASA has signed a share purchase

agreement for the acquisition of TDC Systems for an estimated cash and

equity consideration of GBP 10 million dependent on future financial

performance. This marks a clear strengthening of Q-Free's position in

the market for Advanced Transportation Management Systems (ATMS).

TDC Systems comprises TDC Systems Ltd in the UK and its sister company

TDC Systems Pty in Australia, both of which are 100 percent owned by

Founder and Managing Director Mark Phillips.

TDC Systems was established in 1998 in Weston-super-mare in North

Somerset in England, and now counts 40 employees running a 24/7 global

operation with customers in 50 countries from its main offices in the

UK, Australia and Malaysia. The company generated revenues of GBP 4.7

million, EBITDA of GBP 0.8 million, and EBIT of GBP 0.7 million in 2013,

and will be consolidated into the accounts of Q-Free with effect from

the first quarter 2014.

The SPA is based on enterprise value, net of debt and cash. Q-Free will

pay an initial consideration of GBP 5 million of which GBP 4 million in

cash and GBP 1 million through issuance of 704 037 new shares in Q-Free

at NOK 14,22 per share. Further consideration is tied to financial

performance in 2014 and 2015. It is estimated to GBP 5 million, assuming

significant revenue and earnings growth in both 2014 and 2015, and is

capped to GBP 7.5 million. The earn-out component may comprise at least

50 percent cash and up to 50 percent new shares in Q-Free, payable in

2015 and 2016.

- The acquisition of TDC Systems is in line with our long-term strategy

to build a strong position within Advanced Transportation Management

Systems (ATMS), which is a growth area complementing our current main

business in the Road User Charging (RUC) market, says CEO Thomas Falck

in Q-Free.

Q-Free expects to see significant growth in the ATMS market, given the

benefits of new technology deployment in terms of traffic safety and

traffic flow, pollution, and operating costs. The company in 2012

acquired the US based parking guidance company TCS International, which

was followed up with the acquisitions of the Serbian traffic management

company ELCOM and a strategic 10 percent investment in Intelight in the

US in 2013. TDC Systems significantly broadens Q-Free's ATMS portfolio.

TDC Systems is an industry leader in research, design, manufacture,

installation and maintenance of Intelligent Transport Systems (ITS),

including advanced weigh-in-motion systems, traffic counters and

classifiers, journey-time monitoring systems, air quality monitoring

systems, and detection systems for pedestrians and cyclists.

-TDC Systems holds advanced technologies, products, and systems software

solutions for highways, roads, bridges, tunnel management and urban

areas that provide a natural extension of Q-Frees´s solutions portfolio.

This gives us the opportunity to offer more traffic management solutions

to our customers in international markets, says Falck.

For TDC Systems the acquisition implies significant increase in market

reach, through Q-Free's international operations and partnership

network.

- Becoming a part of Q-Free will further strengthen our market

leadership, and all employees are very enthusiastic about the

opportunity to become part of a much larger international operation with

a global network. The additional market exposure and availability of

resources will contribute to further expansion of our business together

with the rest of the Q-Free family, says Mark Phillips, Founder and

Managing Director of TDC Systems.

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 will continue to

build its position through acquisitions as well as further development

of its current businesses within this area.

Please see the enclosed material for additional information in

accordance with Section 3.4 of Continuing Obligations for companies

listed on Oslo Stock Exchange.

For further information, please see www.q-free.com or contact:

CEO Tomas 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 within

Road User Charging and Advanced Transportation Management Systems. The

company has approximately 300 employees with offices in 14 countries and

presence on all continents. The company's head office is in Trondheim,

Norway. Q-Free is listed on Oslo Stock Exchange under the ticker QFR.

About TDC Systems:

TDC Systems is a privately held industry leader in research, design,

manufacture, installation and maintenance of Intelligent Transport

Systems (ITS). The company has 40 employees with offices in the UK,

Australia, and Malaysia and customers in 50 countries worldwide. The

company's head office is in Weston-super-mare in North Somerset in

England.