Techstep ASA — M&A Activity 2021

May 10, 2021

Techstep acquires software company Famoc adding MMS capabilities, increasing ARR by 40% and announce fully underwritten private placement of NOK 100 million

Techstep acquires software company Famoc adding MMS capabilities, increasing ARR by 40% and announce fully underwritten private placement of NOK 100 million

Oslo, 10 May 2021. Techstep ASA ("Techstep"), has signed an agreement to acquire

the entire share capital of Famoc S.A. and affiliates (collectively "Famoc"), a

software company based in Poland with a European customer base.

The transaction will be financed by raising NOK 100 million of new equity in

Techstep, fully underwritten by the largest existing shareholders, Datum AS,

Middelborg Invest AS and Karbon Invest AS, and a NOK 34 million acquisition

loan.

"Techstep executes its M&A strategy according to plan. This is the 11[th]

acquisition since the journey started and an important one progressing

Techstep's transformation into a software-driven company. Making work mobile at

scale in an easy, secure, and sustainable way represent a big value creation

opportunity, and Techstep aims to be a leader within the field", says Jens

Rugseth, Techstep chairman of the Board.

Acquisition strengthens MMS offering and unlocking European expansion

The acquisition of Famoc will provide Techstep with:

· Software complementing its Managed Mobility Services (MMS) offering to

enterprises in the Nordics

· A European footprint unlocking geographical expansion outside the Nordics

· An expected increase in annual recurring revenue (ARR) of ~40%

· Significant financial synergies from integration of Famoc's software into

Techstep's MMS offering and from cross-selling opportunities

Techstep's Managed Mobility Services (MMS) solution is delivered via an as-a

-service model to reduce complexity and cost and increase the value of mobility

for enterprises. The Famoc acquisition reduces third party software dependence

and provides software and systems that strengthens Techstep's capabilities

within Platform Management. Combined with Techstep's established capabilities

within Asset Management and Advisory Services, Techstep can offer customers a

complete and automated MMS solution that provides control, security, compliance

and lifecycle management - all on one Techstep dashboard.

By complementing Techstep's MMS offering, the transaction enables up-selling

opportunities to existing Techstep customers in the Nordics, as well as

increasing the gross profit potential per managed device, contributing towards

Techstep gross profit ambition of NOK 1,200 per managed device by 2025. In

addition, Famoc's existing 850,000 users represent a cross-selling opportunity

for Techstep's current own IP and solutions, as well as joint European expansion

and accelerated growth opportunities.

"Acquiring Famoc, its software, systems and European operations makes perfect

sense. The transaction strengthens our all-in-one Managed Mobility Services

solutions for enterprises in the Nordics, it unlocks a European growth

opportunity and should strengthen our financial performance going forward" says

Jens Haviken, Techstep CEO.

Famoc was founded in Poland in 2006 with offices in Gdansk and Warsaw. Famoc

delivers software solutions for mobility management to SMEs and enterprises via

channel partners, and offer products within the categories Software to manage

mobile devices and secure mobility in business, Security software to defend

confidential data, and Software that locks down the devices of users with

overdue payments.

As of February 2021, Famoc has an ARR of NOK 26 million, a 19% recurring revenue

CAGR, and an LTM EBITDA margin of 23%. Famoc will be acquired at an enterprise

value of NOK 103 million (PLN 47 million), which corresponds to an EV/ARR

multiple of 3.96x.

Transaction details

The total purchase price for Famoc is PLN 47,000,000 (equal to approximately NOK

103 million) on a cash and debt free basis. The purchase price will be

calculated based on a closing balance sheet of Famoc as of the completion of the

acquisition ("Closing"). At Closing, the purchase price will be settled with an

estimated NOK 11.7 million (PLN 5.3 million) in a seller's credit, NOK 19.1

million (PLN 8.7 million) by the issuance of 3,679,211 Techstep shares

("Consideration Shares"). The remaining amount will be settled in cash and

subject to closing accounts, currently estimated at NOK 79.1 million (PLN 35.9

million). The sellers' credit will accrue a WIBOR 3M plus 3 p.p. margin interest

rate per annum and matures in equal instalments 12, 24 and 36 months after

Closing. On the date which falls 18 months after Closing, the sellers may

require to partly convert the sellers' credit up to an amount which equals 50%

of the initial amount of sellers' credit to Techstep shares. The conversion

price shall then be based on 40 days volume weighted average price immediately

preceding the date which falls 18 months after Closing.

The Consideration Shares will be valued at NOK 5.18 pr share which equals the 40

trading days volume weighted average price immediately preceding the signing

date of the share purchase agreement. The Consideration Shares will be issued

under Techstep's current board authorization to issue shares approved at

the annual general meeting held on 22 April 2021 ("Authorization"). The

Consideration Shares will be subject to a lock-up period, of which 1/3 of the

shares will be released every 12 months following Closing.

Closing is subject to certain customary conditions and is expected to take place

during June 2021. The transaction is not subject to any regulatory approvals.

Nordhaven Corporate Finance and Deloitte are acting as financial advisors and

Seewald and CLP are acting as legal advisors to Techstep in connection with the

transaction.

Financing including fully underwritten Private Placement of NOK 100 million

In connection with the acquisition of Famoc and to further strengthen the

Company's balance sheet for further growth the Company intends to complete the

Private Placement of NOK 100 million. Arctic Securities AS and SpareBank 1

Markets AS have been engaged as Joint Bookrunners for the Private Placement (the

"Managers"). The subscription price in the Private Placement will be determined

following an accelerated bookbuilding process arranged by the Managers and the

Private Placement is fully underwritten by Datum AS (a company owned by the

deputy board member Jan Haudemann-Andersen), Middelborg Invest AS and Karbon

Invest AS (a company owned by the chairman Jens Rugseth) (the "Underwriters") in

equal portions. The Underwriters will receive an aggregate underwriting

commission of NOK 1 million. The waiver of the preferential rights inherent in a

Private Placement is considered necessary in the interest of time and successful

completion of the Private Placement and the acquisition of Famoc. The shares

issued in the Private Placement will be issued pursuant to the Authorization.

Further information regarding the Private Placement (including timing) will be

announced in due course. Techstep has also secured an acquisition loan of NOK 34

million.

Investor presentation Tuesday 11 May 2021 at 12:00 CET

Techstep invites to a virtual presentation covering the acquisition, strategy

and outlook on 11 May 2021 at 12:00 CET. A link to the presentation will be made

available at the company website www.techstepasa.no.

For further information, please contact:

Jens Haviken, CEO, Techstep ASA: +47 930 90 070

Marius Drefvelin, CFO, Techstep ASA: +47 958 95 690

About Techstep ASA

Techstep is purpose-built to become a leading Managed Mobility Services provider

in the Nordics. Techstep combines device management, software, hardware and

connectivity into a managed service. This enables enterprises and their

employees to do their work across mobile devices and locations, with a high

degree of security and operational stability. Techstep has 300 employees based

in Norway, Sweden and Denmark, serving 550+ enterprise customers across various

industries in the private and public sectors. The company is listed on the Oslo

Stock Exchange. For more information, please visit www.techstepasa.no.

IMPORTANT INFORMATION

These materials do not constitute or form a part of any offer of securities for

sale or a solicitation of an offer to purchase securities of the Company in the

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-12 of the Norwegian Securities Trading Act. This stock exchange release was

published by Marius Drefvelin, CFO, on 10 May 2021 at 07:00.