Techstep ASA — M&A Activity 2015

Jan 6, 2015

Detailed Stock Exchange Announcement

A detailed stock exchange announcement is hereby released in compliance with the requirements pursuant to section 3.4 of the "Continuing obligations of stock exchange listed companies"/Oslo Børs, July 2013.

Birdstep Technology ASA ("Birdstep" or the "Company") has on January 2, 2015 entered into a Share Purchase agreement with Elektrobit Technologies Oy ("EB") whereby Birdstep sells to Elektrobit the entire shareholding in the Company's wholly-owned Finnish subsidiary, Birdstep Technology Oy ("BTOY"), which represents a decrease of more than 5% in the total revenue of the Company.

Due to the size of the transaction, an Information Document in accordance with section 3.5 of the "Continuing obligations of stock exchange listed companies" will be published within the stipulated timeframe.

1. The Transaction and the parties to the Transaction

1.1 Birdstep Technology Oy

BTOY is a wholly owned Finnish subsidiary of the Company.

1.2 The Agreement

The Company and EB entered into a Share Purchase Agreement on January 2, 2015 whereby EB acquired 100% of the shares in BTOY from the Company as of the same date.

The Company's sale of 100 % of the shares in BTOY to EB will herein be referred to as the "Transaction".

1.3 The Purchase Price

The purchase price for the Transaction is EUR 2,000,000 less the net debt plus the net working capital, totalling preliminary EUR 1,896,663 at closing.

The preliminary purchase price less the escrow amount, see section 1.4 below, was fully paid to the Company's bank account at closing.

Within 30 business days after the closing date, the Company shall deliver to EB audited financial statements for the period from 1 January 2014 until 31 December 2014 and a closing statement setting forth the final net working capital and net debt. Any deviation from the preliminary net working capital or preliminary net debt shall be paid within 5 business days after the closing statement have become final and binding.

1.4 Special conditions or license issues

The parties have agreed an escrow arrangement intended for the settling of claims for breach of warranties. The escrow amount is EUR 200,000, which amount, subject to any claims, will be released at the expiry of a period of 6 months from the closing date.

2. Description of the business to which the Transaction applies

2.1 The business to which the Transaction applies

BTOY is a global provider of secure, seamless mobility software and related services for enterprises, governmental organisations and defense forces. The portfolio spans products and services for secure and seamless connectivity for corporations.

BTOY has one main product area; Secure Mobility ("SM"), leveraging the demand for mobile broadband security through its main products SafeMove Mobile VPN and Secure Andriod Tool kit.

2.2 Board of directors, executive management and employees

2.2.1.2 Board of directors of BTOY

The table below sets forth the current board members up and until the transfer date:

Name	Position
Matti Mujunen	Chairman
Tom Nyman	Board member

2.2.2 Executive management

Birdstep Technology Group:

Name	Position
Lonnie Schilling	CEO
Sophie Rabenius*	CFO
Hassan Tabrizi	Acting CFO
Maria Johansson	Global HR Manager
Marie-Louise Nilsson	VP Market Communications
Anders Storm	VP Engineering & Operations
Sanna Tiilikainen	VP SM Sales

* on maternity leave from 17 October 2014

2.2.3 Number of employees

As of the date of the transfer, the total number of employees within BTOY was 19.

2.3 Key figures

The table below shows selected financial information for BTOY as at the dates and for the years indicated, which have been extracted without material adjustment from the Company's audited annual reports for 2013, 2012 and 2011, and which are incorporated by reference into this Detailed Stock Exchange Announcement. The financial figures in the table below are only an extract and must be read in conjunction with the complete financial statements including notes and auditor's statement for 2013, 2012 and 2011.

BTOY's key figures (in NOK 1 000):

	2013	2012	2011
Operating revenue	19 372	15 718	20 795
Operating result (EBITDA)	-2 357	-6 932	-15 687
Total assets	8 344	4 452	17 613

The table below shows selected financial information for BTOY for the third quarter of 2014, which have been extracted from the Company's unaudited interim financial report for Q3 2014.

BTOY's key figures (in NOK 1 000):

	Q3 2014	Q3 2013	1 Jan – 30 Sept 2014	1 Jan – 30 Sept 2013
- Operating revenue	5 791	4 491	17 525	13 069
- Operating result (EBIT)	266	-708	-1 114	-2 879
- Total assets (30/9)	4 016	3 555	4 016	3 555

2.4 Any significant assets or liabilities that are not shown in the balance sheet

At the date of this announcement there are no significant assets or liabilities that are not shown in the balance sheet.

3. The significance of the Transaction to the Company

Over the past years the Company has been evaluating and implemented ways to better leverage the synergies between Secure Mobility and Smart Mobile Data solutions. The first step was to alter the product- and development strategies to better leverage the same or similar products across the enterprise and service provider markets. Next step was to build a stronger sales team by consolidating its expertise into one team with the goal to leverage synergies, bringing more efficiency to the daily work and also to be able to look at the accounts with a wider perspective.

But despite the efforts to find synergies for Secure Mobility and Smart Mobile Data the strategic direction for the different business areas has further diverged. Smart Mobile Data has also established itself as the major area of growth for the Company. With this Transaction the Company provides opportunity and foundation for both to focus, grow and to create stronger positions in the market.

The Company will, after this Transaction, be able to focus entirely on Smart Mobile Data services, offering advanced solutions for Mobile Network Operators, Cable Network Operators and device manufacturers. The new capital will be used to further focus on growth, expanding geographically, develop the product portfolio and strengthening the Company´s position in high growth markets such as the US and Asia.

4. Agreements for the benefit of executive management or board members in connection with the Transaction

With the exception of the below, there are no agreements, existing or contemplated, in connection with the Transaction that involve extraordinary benefits for senior employees or members of the board of directors in the Company or BTOY.

A settlement agreement has been agreed between the Company and Matti Mujunen, chairman of BTOY, according to which Mr.Mujunen will receive an amount of EUR 15,000 for his role in the facilitation of the Transaction.

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