Easton Investments : Update on HUB24 Proposed Investment in Easton

Via ASX Online
ASX ANNOUNCEMENT - 21 December 2020
ASX Market Announcements Office
ASX Limited	ASX Code: EAS
Update on HUB24's Proposed Investment in Easton

The Directors of Easton Investments Limited (Easton or the Company) refer to Easton's announcement to the ASX on 28 October 2020 regarding the proposed investment by HUB24 Limited (HUB24) of up to 40% of Easton.

The Directors are pleased to advise that following completion of due diligence and discussions with HUB24, the parties have entered into a transaction implementation deed under which HUB24 will make a recommended proportional takeover offer (the Offer) at a price of $1.20 per share for 1 in every 3 shares held in Easton (being substantially the same in terms of price and proportion as previously announced1).

The Offer represents a variation of the arrangements previously announced1, whilst retaining the key features of the proposed investment in Easton and with comparable financial outcomes for HUB24 and Easton shareholders.

The previously announced1 transaction included Easton making a share placement to HUB24 to raise $14.05m in cash, with Easton then undertaking an equal access, off-marketbuy-back which would result in HUB24 having a shareholding of up to 40% of Easton, depending on the level of shareholder acceptances of the buy-back offer. These arrangements are in effect replaced by the Offer.

Importantly, the revised form of Offer will eliminate the need for Easton to make a share placement to HUB24, the related requirement to convene a special (extraordinary general) meeting of Easton shareholders and the uncertainty associated with the off-marketbuy-back offer in terms of Easton's share capital and cash position at the completion of the buy-back.

To give effect to the current arrangements between Easton and HUB24, the parties have entered into:

• A Transaction Implementation Deed (TID), attached as Annexure A, under which it is agreed that HUB24 will make a recommended proportional takeover offer for 1 in every 3 fully paid ordinary shares in Easton held by shareholders other than HUB24. The TID also provides for the special, fully franked dividend of $0.05 per share to eligible Easton Shareholders, details of which were announced to the ASX on 14 December 2020, and the issuance of 1.7 million options to HUB24 over Easton shares for nil issue price, exercisable within three years at an exercise price of $1.20 per option. HUB24 will also have the right to appoint two nominee directors to Easton's Board;
• A Technology Partnership and Distribution Agreement which serves as a framework under which (and subject to more detailed agreement on a project by project basis), HUB24 will provide innovative technology and data solutions to Easton in consideration for the issue by Easton of 1.7 million options on the terms noted above;
• A Share Sale Agreement (SSA) on terms comparable to those previously disclosed1 to the market, under which Easton will issue approximately 3.3m shares to HUB24 (Paragem Shares) in consideration for the transfer by HUB24 of all the shares in Paragem Pty Ltd (Paragem) to Easton. It is expected that the transaction will be effective in early February 2021, while the Paragem Shares will be issued on 4 January 2021 and will be subject to a holding lock until completion. On completion of the Paragem transaction, Nathan Jacobsen will be appointed as Managing Director of Easton; and

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1 Reference to 'previously announced' or 'previously disclosed' means the ASX announcement made by the Company on 28 October 2020 headed 'Important Strategic Partnership with HUB24'.

• A Transitional Services Agreement under which HUB24 will provide certain services to Paragem on a transitional basis for a period of 3 months following completion of the SSA.

If all Easton shareholders accept the Offer, HUB24 would be entitled, on completion of the Offer, to approximately 39.2% of the total fully paid ordinary shares in Easton.

The Easton Board regards the Offer and related arrangements with HUB24 as a transformational opportunity for Easton, with clear and compelling benefits for Easton shareholders (the key features and benefits of the arrangements with HUB24 are as set out in the Company's announcement to the ASX on 28 October 2020). The Easton Board intends to recommend that shareholders accept the Offer from HUB24 in the absence of a superior offer.

Easton Directors and their associates intend to accept the Offer and have entered into Pre-Bid Acceptance Agreements in respect of 1 in every 3 shares in Easton held or controlled by each of them. These arrangements in aggregate represent 3.41 million shares or 9.9% of Easton's issued capital.

Transaction Timetable and Next Steps

Easton shareholders do not need to take any action in relation to the Offer at this stage. A Bidder's Statement from HUB24 and a Target Statement from Easton will be sent to Easton shareholders in the coming weeks, which will contain important information in relation to the Offer, including how to accept the Offer, information about HUB24 and reasons for and against why Easton shareholders should accept the Offer.

An indicative timeline and next steps are set out below:

∙	21 December 2020	Today's ASX announcement
∙	23 December 2020	Special Dividend Record Date
∙	4 January 2021	Paragem Shares are issued to HUB24
∙	5 January 2021	Bidder's Statement lodged with ASIC, ASX and Easton
∙	20 January 2021	Bidder's Statement is despatched to Easton shareholders
		The Offer opens (minimum offer period of 1 month)
∙	21 January 2021	Special Dividend Payment Date
∙	25 January 2021	Target's Statement lodged with ASIC, ASX and HUB24
		Target's Statement is despatched to Easton shareholders
∙	1 February 2021	Acquisition of Paragem completed
		Options issued to HUB24.

Authorised for release by Kevin White, Executive Chairman.

Kevin White

Executive Chairman

Mobile [phone]

[e-mail]

ANNEXURE A

Transaction Implementation Deed

DocuSign Envelope ID: C732F1CF-864F-459C-84D7-36763BF49C5E

Transaction Implementation Deed

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Easton Investments Limited (ABN 48 111 695 357) (Target)

HUB24 Limited

(ABN 87 124 891 685) (Bidder)

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