Subject:

Disclosure of delayed inside information – commencement of negotiations concerning the execution of an acquisition agreement. Execution of an acquisition agreement.

Legal basis:

Art. 17 sec. 1 MAR – inside information.

Content:

The Management Board of R22 S.A. with its registered office in Poznań (the “Issuer”) hereby announces that on 8.07.2020 it decided to delay the disclosure of inside information concerning the commencement by Vercom S.A. with its registered office in Poznań (a subsidiary of the Issuer) (“Vercom”) of negotiations concerning the execution of an acquisition agreement, pursuant to Article 17(4) of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC.

The reason for disclosing the delayed inside information is the completion of negotiations concerning the execution of an acquisition agreement and the execution of the agreement today. The agreement was entered into between Vercom and Net Brokers Holding a.s. (owned by Bauer Media Group) (the “Seller”), as a result of which Vercom became the sole shareholder of ProfiSMS s.r.o. with its registered office in Prague (Czech Republic) (“ProfiSMS”) and, indirectly through ProfiSMS, the sole shareholder of Axima SMS Services s.r.o. with its registered office in Brno (Czech Republic) and SMSbrana s.r.o. with its registered office in Brno (Czech Republic) (the “Group”) (the “Agreement”).

The price for the shares in ProfiSMS was set at CZK 239.300.000, of which CZK 17.947.500 will be payable in 12 monthly instalments following the date of transfer of the interest in ProfiSMS, subject to the provision of services to the Group companies by the existing management board member (the “Price”). The Price will be paid from own funds and loan financing. The loan agreement referred to in Current Report No. 1/2020 dated 14 January 2020 was amended so that the total amount of the loan granted increased by PLN 36 million.

Closing of the transaction, including payment of the Price and acquisition of the shares in ProfiSMS by Vercom, will take place after the execution of an additional share transfer agreement.

The Seller provided Vercom with customary representations and warranties concerning the shares and the business, including warranties concerning tax matters. In the event of a breach of the truthfulness of these representations and warranties, Vercom will be entitled, on the terms and within the periods specified in the Agreement, to seek a reduction of the Price. The Seller’s liability for breaches of the Agreement and the representations and warranties contained therein is limited to the amount of the Price.

The Agreement provides for a right of withdrawal by the Seller and Vercom in certain circumstances customary for transactions of this type, in particular those related to failure to perform specified actions contemplated at the transaction closing stage. If either party entitled to withdraw from the Agreement exercises such right, the other party is obliged to pay damages of CZK 22.500.000.

For a period of 24 months after the transaction closing date, the Seller is obliged to comply with a non-compete obligation in the territory of the Czech Republic.

The Agreement was concluded under Czech law.

The ProfiSMS Group is the leader of the Czech transactional and marketing SMS communications market. The Group is also active in the Slovak market.

The acquisition of ProfiSMS not only establishes a strong position in the Czech market and creates opportunities to cross-sell further R22 Group services, but above all opens the way for the international development of the R22 Group’s CPaaS segment.