Syn — M&A Activity 2018

Nov 1, 2018

Reykjavik, November 1st 2018

Sýn hf. sells majority of its shares in Hey P/F through a merger of Hey with Nema P/F

Sýn and the Faroese company Tjaldur have agreed on heads of terms in a merger of Hey a subsidiary of Sýn and the Faroese IT company Nema a subsidiary of Tjaldur. The transaction will create a leading ICT company in the Faroese market with diversified income streams from enterprise and consumer market in the Faroe Islands. The merger will realize cost synergies and unlock potential for further value creation through extended product supply to the enterprise ICT market. The new business is expected to have an income of approximately DKK 150m, an EBITDA of DKK 20m and CAPEX of DKK 8-10m.

Key terms agreed between parties:

• Sýn will hold 49,9% of the merged business and Tjaldur owning 50,1%.
• Sýn will receive a payment of DKK 22m.
• Respective interests of the parties will be protected by a shareholder agreement.

Impact on Sýn:

• The transaction will result in a profit of DKK 46m for Sýn from an increase in the booked value of Hey
• Hey in 2017: Income was DKK 77,5m, EBITDA was DKK 9,8m and CAPEX was DKK 7,7m.
• Hey's forecast for 2018: Income of DKK 73,3m, EBITDA of DKK 12,0m and CAPEX of DKK 9,5m
• Following the transaction Sýn's stake in the merged business will most likely be accounted for using the equity method and therefore not on a consolidated basis.

The transaction is subject to several prerequisites such as completion of a final share purchase agreement and approval of the Faroese competition authorities.

Further information and assistance:

☑ Mr. Guðfinnur Sigurvinsson, director of communications at Sýn hf., via e-mail fjarfestatengsl@syn.is or tel. +354-669-9330.

sýn

Sýn hf. • Suðurlandsbraut 8 • 108 Reykjavík • Kt. 4709051740 • syn.is