HRL : Enters Into Bid Implementation Agreement With ALS

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ASX Announcement

30 June 2022

HRL Enters Into Bid Implementation Agreement With ALS Limited

HRL Holdings Limited (ASX: HRL) (HRL) announces that it has entered into a Bid

Implementation Agreement (BIA) with ALS Limited (ASX: ALQ) (ALS) under which ALS will make offers to acquire all of the ordinary shares of HRL it does not already own by way of an off-market takeover at A$0.16 cash per share (Offer).1

Key Highlights

The cash price of A$0.16 per HRL share1 implies an equity value, on a 100% fully diluted basis, of approximately A$82.2 million and represents:

• 95.1% per cent over the undisturbed closing share price on Monday, 27 June 2022 (27 June 2022 being the trading day prior to the media announcement that ALS was in exclusive negotiations with HRL);
• 85.8% per cent over the undisturbed 30-day volume weighted average price (VWAP) up to and including 27 June 2022;
• 84.2% per cent over the undisturbed 90-day VWAP up to and including 27 June 2022; and
• 43.8% per cent over the undisturbed 2-year VWAP up to and including 27 June 2022.

HRL Directors Unanimously Recommend the Scheme

HRL's Board of Directors unanimously recommend the Offer to shareholders in the absence of a superior proposal.2 HRL Directors, who in aggregate own or control 18.59% of the HRL shares on issue as at the date of this announcement, have indicated that they intend to accept the Offer for the HRL shares that they own or control, in the absence of a superior proposal.2

HRL non-executive chair Mr Greg Kilmister noting that the HRL Board has considered and approved the offer said:

"The HRL Board is unanimous in its view that this transaction is in the best interests of HRL shareholders. In making this assessment, the Board has carefully considered a range of matters including its view of the intrinsic value of HRL taking into account the company's current position and future prospects, and the certainty for shareholders of this all-cash offer. We believe this transaction is a very good outcome for HRL's shareholders, and for stakeholders more broadly, including our customers, staff and suppliers."

1. A$0.16 cash per share (less the amount or value of any 'rights' (to be defined in the Offer) attaching to each HRL share which arise or are paid on or after the date of ALS' Bidder's Statement and which ALS does not receive), subject to any improvement permitted by the Corporations Act.
2. At the date of this announcement the HRL Board had not determined whether it would engage an independent expert to prepare a fairness and reasonableness opinion in relation to Offer. In the event that such an opinion is sought, the recommendation and statement of intention is also subject to the independent expert concluding, and not withdrawing such conclusion, that the Offer is fair and reasonable or not fair but reasonable.

www.hrlholdings.com | ABN 99 120 896 371 | ASX Code: HRL

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Details of the Offer

HRL has entered into a BIA with ALS Limited under which ALS is seeking to acquire 100% of the issued share capital of HRL for a cash price of A$0.16 per HRL share1 by way of an off- market takeover.

The Offer is unconditional. HRL shareholders who accept the Offer will receive consideration under the Offer within five business days after receipt of valid acceptance.

HRL and ALS and have agreed to a deal protection regime including no shop and no talk rights, a right to match any superior offers and payment of an agreed break fee of A$800,000 by HRL to ALS in certain circumstances.

The transaction is fully funded by ALS cash resources and binding on the parties. It is subject to limited conditions described below.

Full details of the conditions to the Offer are set out in the BIA which is attached to this announcement.

Indicative Timetable and Next Steps

The Offer is expected to open by early-July and will remain open for acceptances for a period of no less than six weeks, with the opportunity to extend the Offer Period if required.

Further details regarding the Offer will be detailed in ALS's Bidder's Statement and HRL's Target's Statement, which are expected to be despatched to HRL shareholders in the coming weeks. The Bidder's Statement and the Target's Statement will contain detailed information relevant to the Offer, including benefits for HRL shareholders; and how shareholders can accept the Offer.

HRL's shareholders should consider both ALS's Bidder's Statement and HRL's Target's Statement, and may wish to seek independent financial, legal and taxation advice, before making a decision as to whether to accept the Offer.

This announcement has been approved by the Board

Paul Marshall

Company Secretary

For further information contact:

Investor and media:

Mr Steven Dabelstein

CEO

Ph: [phone] [e-mail]

www.hrlholdings.com | ABN 99 120 896 371 | ASX Code: HRL

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About HRL Holdings Limited

HRL provides sampling, laboratory testing, and data management services across Australia and New Zealand.

About ALS Limited

ALS is a global Testing, Inspection & Certification business. The company's strategy is to broaden its exposure into new sectors and geographies where it can take a leadership position.

www.hrlholdings.com | ABN 99 120 896 371 | ASX Code: HRL

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Annexure 1 Bid Implementation Agreement

www.hrlholdings.com | ABN 99 120 896 371 | ASX Code: HRL

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Bid Implementation Deed

Australian Laboratory Services Pty. Ltd. (ACN 009 936 029)

HRL Holdings Ltd (ACN 120 896 371)

Baker & McKenzie ABN 32 266 778 912 Level 8

175 Eagle Street Brisbane QLD 4000 Australia www.bakermckenzie.com