DWS : Presentation of DWS's proposed acquisition of SMS

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DWS Limited

Proposed Acquisition of SMS Management & Technology via Scheme of

Arrangement

May 2017

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A transformational transaction for shareholders.

• On 27 February 2017, DWS Limited (DWS) announced that it executed a Scheme Implementation Agreement to acquire SMS Management & Technology Limited (SMS) via Scheme of Arrangement (Transaction)

• Offer of $1.00 in cash and 0.39 DWS shares for each SMS share (Scheme Consideration)

  • Implied value of Scheme Consideration of $1.61 per SMS share1, representing total transaction enterprise value of $120m2, to be funded by $79m new debt and 26.7m new DWS shares

  • Additional value to those SMS shareholders able to realise the full benefit of franking credits of up to 4.4 cents per share in

    connection with a potential special dividend of up to 10.2 cents per share for eligible SMS shareholders3

• Attractive offer for SMS shareholders with immediate cash proceeds and the opportunity to participate in the ongoing performance of the combined entity

• The Transaction will be transformational for DWS, giving rise to significant benefits including material cost synergies, operational efficiencies and a broader service offering for clients

  • Estimated $5m near term synergies with further synergy potential from cross-selling of products and services and operational improvements

  • Materially EPS accretive for DWS shareholders in year 1

• The Independent Expert, KPMG, has concluded that the Transaction is both fair and reasonable, and is in the best interests of SMS Shareholders

  • Assessed underlying value of SMS of $1.52 to $1.76 per share

• Scheme Booklet was released to the ASX on 5 May 2017, with shareholder meeting to be held on 14 June 2017

• If approved, the transaction to be implemented on 3 July 2017

Notes: (1) Based on DWS share price as at the Last Practicable Date of $1.555. (2) Based on SMS net debt of $10.3m (excludes finance leases and bank guarantees) as at 31 December 2016 and SMS total issued shares of 68.5m. Enterprise value excludes SMS and DWS transaction costs. (3) The cash component of the Scheme Consideration will be reduced by the amount of any such special dividend which is at the discretion of SMS Directors.

Ownership in a leading Australian IT services provider

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Increased scale of the combined businesses, with ability to better compete in Australian IT services sector

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Anticipated material synergies, operational benefits and cross selling opportunities

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DWS's experienced Executive team to lead the combined businesses to deliver improved profitability

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Attractive dividends - Merged Group intends to maintain fully franked final dividend of 5.0 cps for FY17 and 5.0 cps fully franked interim and final dividends for FY181

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Greater relevance to equity investors through increased market capitalisation

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Positive broker reaction to transaction announcement2

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Note:. (1) After taking into account the Merged Group's financial performance and future capital requirements. (2) Based on CCZ and Ord Minnett broker reports dated 28 February 2017

Source: SMS Scheme Booklet dated 4 May 2017.

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DWS will have significantly more scale post transaction.

Revenue (CY16) $463.7m EBITDA (CY16) $42.7m $312.5m $27.3m $151.3m $10.4m $5.0m

DWS pre-	SMS	Annualised	Pro-forma	DWS pre-	SMS	Annualised	Pro-forma
transaction	Synergies	Merged Group	transaction	Synergies	Merged Group

NPAT (CY16) Billable Staff (CY16) $18.1m $25.7m

2

1,334 1,979 $5.9m $1.6m1 645

DWS pre- transaction

SMS Annualised Synergies

Pro-forma Merged Group

DWS pre-transaction SMS Pro-forma Merged

Group

Notes: (1) Synergies net of transaction adjustments (i.e. additional interest and tax). Does not include one-off costs of achieving synergies. Differences (if any) due to rounding. (2) Includes 471 M&T contractors.

Source: SMS Scheme Booklet dated 4 May 2017.