Techstep ASA — M&A Activity 2017

Jul 3, 2017

Techstep announces acquisition of BKE Telecom AB, and thereby creates a broader foundation for expansion in Sweden

Techstep announces acquisition of BKE Telecom AB, and thereby creates a broader foundation for expansion in Sweden

Oslo, Norway, 3 July 2017, Techstep ASA ("Techstep" or the

"Company") entered into a binding agreement to acquire BKE Telecom

AB ("BKE") for an aggregated purchase price of SEK 81 million.

BKE, headquartered in Karlstad, Sweden, was founded in 1983 and is

one of the leading providers of business telecommunication

equipment and services, employing 43 full time equivalents. The

product and services offering comprises hardware communication

equipment, cloud PBXs, operator services and other services for the

public sector and corporates in Sweden.

The hardware offering comprises, e.g. mobile, fixed, wireless and

conference phones, headsets, tablets and other associated

communication equipment, from, e.g. Apple, Dell, Jabra, HTC,

Huawei, LG, Microsoft, Samsung and Sony.

BKE offers an industry leading cloud-based (UCaaS) PBX solution,

where users may choose to communicate via mobile, fixed, wireless

phones, web or computer applications. BKE is one of few market

players in Sweden offering cloud-based PBXs integrated with all the

largest Swedish operators, i.e. Tele2, Telenor, Telia and 3, and

also Telavox.

BKE delivered revenues of SEK 166.6 million, SEK 239.6 million and

SEK 189.1 million in 2014/2015, 2015/2016 and 2016/2017,

respectively, and delivered adjusted EBITDA of SEK 14.1 million,

SEK 18 million and SEK 15.5 million in 2014/2015, 2015/2016 and

2016/2017, respectively (BKEs fiscal year ends 30 April in

respective years). In 2016/2017 hardware accounted for

approximately 77 % of BKEs turnover. Total assets as at 30 April

2017 were SEK 50.1 million with an equity ratio of 32.1%.

The purchase price payable at closing of SEK 81 million will be

settled with SEK 38.5 million in cash, SEK 15 million in seller

credit and SEK 27.5 million in Techstep shares, to be issued at a

price of NOK 5.70 per Techstep share ("BKE Consideration Shares").

The shares will be issued under Techstep's current board

authorization to issue shares approved at the extraordinary general

meeting held on 28 February 2017.

In addition, it has been agreed that the sellers will have the

right to an earn-out payment up to SEK 22.5 million based on

certain criteria related to increased profitability.

Closing is subject to customary conditions, including certain

third-party consents, and is expected end of August 2017. The

transaction is not subject to any regulatory approvals. The sellers

will have a lock-up on the BKE Consideration Shares with 1/3 until

August 2018, 1/3 until February 2019 and 1/3 until August 2019. BKE

is currently indirectly owned by Daniel Råd (33.3%), Peter

Gustavsson (33.3%) and Thomas Gustavsson (33.4%).

Except for the sellers' right to receive the BKE Consideration

Shares, the transaction does not involve any specific rights to the

benefit of the members of the Board of Directors or the executive

managements of Techstep or BKE respectively, nor is any such

agreements expected to be entered.

Strengthening offering in the Nordics and expanding customer base

Techstep has established itself as a Nordic enabler of the digital

workplace and is experiencing a push from customers to be able to

service them with mobile phones, laptops and tablets across the

Nordics. The acquisition of BKE provides Techstep with a scalable

setup to act as a cross border one-stop-shop.

Moreover, BKE offers a wide and solid customer base already asking

for the enterprise mobility solutions which is the core of Techstep

current offering. The combination makes a foundation for increased

solution sales to BKEs current customers. In addition, the

acquisition of BKE provide Techstep with a Swedish hardware,

logistics and distribution platform which will be an integrated

part of Techstep's unique Mobile as a Service (MaaS) concept. MaaS

allows Techstep's customer to purchase the combination of hardware

and solutions on a monthly payment OPEX-model.

BKE has a strong market position with their cloud PBX (switchboard

and contact centre) solutions, which is well integrated with normal

phone use and other communication technologies (such as Skype for

business). Techstep is experiencing increased demand for pan-Nordic

solutions in this area making the BKE offering an attractive

alternative to solutions provided today.

BKE is one of the leading providers of communication equipment and

telephony services in Sweden, with a significant growth potential

to increase both the number of end-users and the degree of

solutions delivered.

"With the acquisition of BKE we are expanding our customer base in

the Nordics and strengthening our offering. We now have complete

delivery capacity in Sweden, including hardware, mobile device

management solutions, service and support, and BKEs leading cloud

PBX solution. This will increase the scalability of our business

model with our newly launched MaaS offering and create a truly pan-

Nordic offering to many of our larger Nordic customers", Gaute

Engbakk, CEO of Techstep, says.

"We are very much looking forward to become part of the Techstep

family. We have a solid customer base ready for the wider product

offering from Techstep, and we have a logistics and support setup

that can service Techstep's Swedish customer base with a wider

product range. Being part of Techstep we expect to be able to more

effectively capitalize on our growth potential, in a strong and

growing market", Daniel Råd, the newly appointed CEO of BKE (and

one of the current owners) comments.

For further information please contact:

Gaute Engbakk, CEO of Techstep: +47 91633281

Marius Drefvelin, CFO of Techstep: +47 95895690

Daniel Råd, CEO of BKE: +46 733-303132

Techstep ASA - we make the worklife mobile

Techstep is positioning itself as a leading Nordic enabler of the

digital workplace. Techstep's unique "Mobile as a Service" (MaaS)

offering is a one-stop-shop solution combining hardware,

subscription & connectivity, mobile device management, managed

services and related software, in addition to financing. The MaaS

solution enables enterprises to let employees do their work across

mobile devices and locations with a high degree of security and

operational stability. Techstep employs approximately 160 team

members based in Norway and Sweden, that serve close to 5,000

customers and 450,000 end users across various industries in the

private and public sector. The company had pro forma sales of

approximately NOK 720 million in 2016 and is listed on Oslo stock

exchange. For more information, please visit http://techstep.no/.

This information is subject to the disclosure requirements pursuant

to Section 5-12 of the Norwegian Securities Trading Act.