Techstep ASA — M&A Activity 2017

Mar 21, 2017

Techstep announces acquisition of Apro

Techstep announces acquisition of Apro

Reference is made to the stock exchange announcement made by

Techstep ASA ("Techstep" or the "Company") on 2 February 2017

regarding an agreement in principle to acquire the entire share

capital of Apro Tele og Data AS ("Apro") for an aggregate purchase

price of NOK 15.5 million (the "Transaction").

On 21 March 2017, Techstep entered into a binding share purchase

agreement on the Transaction.

Apro delivers communication solutions with focus on mobile

communications. Apro sells hardware, mobile subscriptions and offers

consulting services for larger clients and customer support /

maintenance and repair inhouse. Apro is the largest franchisee

within Telering chain that serves both Telenor and Telia B2B mobile

subscription customers. Apro has a strong presence in eastern Norway

and in particular within the public sector. The Transaction supports

Techstep's strategy to increase its core-adjacent customer base and

leverage this customer base with a leading solutions and service

offering.

Apro had a turnover of NOK 71.5 million in 2016 and an EBITDA of NOK

4.3 million. In 2015 the turnover was NOK 74.8 million and the

EBITDA respectively NOK 3.9 million. Total assets of Apro were NOK

18.6 million at year end 2016. Apro had, given certain adjustments

related to the transaction, a net debt position of approximately NOK

1.3 million at year end 2016. Apro currently has 18 employees and

has a recently established sales office in Oslo through a wholly

owned subsidiary called Apro Oslo AS.

The purchase price will be settled with NOK 7 million in cash and

NOK 8 million in shares based on a Techstep share price of NOK 6.00

per Techstep share, corresponding to 1,333,333 new Techstep shares

("Consideration Shares"), and a seller note in the amount of NOK 0.5

million. The Consideration Shares equal 1.00 per cent of the

currently issued share capital of Techstep. In addition, it has been

agreed that the sellers will have the right to an earn-out payment

up to NOK 2.5 million based on certain criteria regarding increased

profitability.

The Consideration Shares will be issued under Techstep's current

board authorization to issue shares approved at the extraordinary

general meeting held at 28 February 2017. The Consideration Shares

will be issued on a separate ISIN pending approval and publication

of a listing prospectus which is currently being prepared by the

Company. Following publication of the prospectus, the Consideration

Shares will be transferred to the ordinary ISIN of the Company and

will from such time be admitted to trading on Oslo Børs. Closing is

subject to customary conditions, including certain third party

consents and is expected during April 2017. The sellers will have a

lock-up on the Consideration Shares with 1/3 until 7 November 2017,

1/3 until 7 May 2018 and 1/3 until 7 November 2018.

Apro is currently owned 14.29 per cent each by Morten Alexander

Bull, Jan Hellevik, Helge Antonsen, Ketil Rune Romstad, Reidar

Olsen, Alf Inge Skatvedt Thengs and Parero AS. The owners are all

currently employed in Apro with the exception of Parero AS which is

owned by affiliates of Ronny Røsand who is employed by Apro. The

Board of Directors currently consists of Ronny Røsand, Morten

Alexander Bull, Ketil Rune Romstad, Jan Hellevik and Torkel Kvammen.

Techstep has entered into a bonus agreement with Ronny Røsand with a

payment of up to NOK 3 million subject to certain criteria regarding

the commercial and financial development of Apro.

Gaute Engbakk, CEO of Techstep, says:

"The acquisition of Apro strengthens our core customer base and a

team particularly skilled in serving the public sector. Together

with our newly acquired InfraAdvice, which also have many

municipalities on their customer list, we now have a significant

combined reach towards the public sector in Norway and Sweden.

Within the Techstep umbrella we will actively engage with these

customers to ensure that we can offer leading mobility as a service

to assist with digital transformations. We believe Apro will be an

efficient partner and distribution channel for services delivered by

other Techstep companies such as Smartworks and Mytos."

Ronny Røsand, Chairman of the Board of Apro, says:

"We are very excited about joining Techstep and believe this will be

a major step in our continued efforts to offer leading services to

our customers. I believe we this is the start of a new journey both

for our customers and employees. We have long standing relationships

with our customers and will, together with Techstep, be able to

strengthen our offering of 'as-a-service' solutions."

For further information please contact:

Gaute Engbakk, CEO of Techstep: +47 91633281

Marius Drefvelin, CFO of Techstep: +47 95895690

This information is subject to the disclosure requirements pursuant

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

About Techstep

Techstep has established itself as a leading B2B provider of

mobility and communications services in Norway. Digitization of

society and business is changing the mentality of the telecom

industry as well as the organizations and people it serves. Focus is

moving from infrastructure and devices to value adding services.

This creates new market opportunities, and Techstep, along with its

subsidiaries, are building and expanding their market offerings to

become the preferred digital workplace vendor. The strategy for

building the solutions platform is through organic innovation,

acquisitions and partnerships with an aim to become a fully

integrated digital solutions provider. In pursuit of the growth

strategy, Techstep is backed by strong investors known for creating

value through transformation.

Techstep has two main business segments: Hardware, represented by

Nordialog Oslo, and Solutions, represented by SmartWorks and Mytos.

These companies are subsidiaries of Teki Solutions, which is

controlled by Techstep. Nordialog Oslo represents one of Telenor's

key distribution channels of devices and mobile subscriptions to the

Norwegian business segment.