Reunert : Voluntary announcement – Acquisition of the entire issued share capital of Etion Create Proprietary Limited

Reunert Limited

(Incorporated in the Republic of South Africa) (Registration number: 1913/004355/06)

JSE code: RLO

ISIN: ZAE000057428

("Reunert" or the "Company")

VOLUNTARY ANNOUNCEMENT - ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF ETION CREATE PROPRIETARY LIMITED ("ETION CREATE")

1. INTRODUCTION
   Reunert shareholders ("Shareholders") are advised that on 20 May 2022 an agreement ("Sale Agreement") was entered into between, inter alia, Reunert Applied Electronics Holdings Proprietary Limited (the "Purchaser"), a wholly owned subsidiary of the Company, and Etion Limited (the "Seller") in terms of which the Purchaser will, subject to the fulfilment or waiver (where applicable) of the Conditions Precedent (as defined in paragraph 3.2 below) acquire 100% of the issued share capital of Etion Create ("Sale Shares") from the Seller, for the Purchase Price (as defined in paragraph 3.1 below) ("Acquisition").
2. OVERVIEW OF ETION CREATE AND RATIONALE FOR THE ACQUISITION
   Etion Create is a leading original design manufacturing company, specialising in the design, manufacture, integration and support of advanced technology. Etion Create creates customised electronic subsystems and products for clients across a range of sectors including mining and industrial; defence and aerospace; internet of things (IoT) and sensors; and cyber security.
   The Company wishes to expand its Applied Electronics segment and believes that the augmentation of its existing assets with the strategic positioning, value proposition and original design manufacturing skills of Etion Create will accelerate these ambitions.
   The value of the net assets of Etion Create as at 30 September 2021 was R159.4 million and the profit attributable thereto for the six month period then ended was R15.7 million. This financial information has been extracted from the unaudited and unreviewed interim financial results of Etion Create for the six months ended 30 September 2021, stated to have been prepared in accordance with International Financial Reporting Standards (IFRS).
3. SALIENT TERMS OF THE ACQUISITION
   Subject to the Conditions Precedent being fulfilled or waived (as the case may be), the Acquisition will be implemented on the first business day of the month following the month in which the last of the Conditions Precedent has been fulfilled or waived (as the case may be), or such later date as may be provided for in the Sale Agreement ("Closing Date").
   Subject to the payment by the Purchaser of the final Purchase Price on the Closing Date, as contemplated in the Sale Agreement, (i) the risks in and benefits arising out of the Acquisition shall be deemed to have passed to the Purchaser with effect from 1 April 2022 ("Effective Date"); and (ii) ownership of the Sale Shares shall pass to the Purchaser on the Closing Date.

3.1 Purchase Consideration

The aggregate purchase consideration ("Purchase Price") payable for the Sale Shares amounts to an initial amount of R168 million, being the assumed value of the Sale Shares on a cash-free and debt-free basis on the Effective Date, which shall be adjusted for certain net debt and net working capital adjustments as well as interest to be accrued on the

Purchase Price between the Effective Date and the Closing Date ("Accrued Interest"). It is currently envisaged that the Purchase Price, excluding the potential successful recovery of a receivable of approximately R2.6 million and the Accrued Interest will amount to approximately R197 million. The Purchase Price shall be subject to an absolute maximum of R210 million.

3.2 Conditions Precedent

Implementation of the Acquisition is subject to the fulfilment (or where applicable, waiver) of conditions precedent customary for a transaction of this nature, including the following:

• the passing of the ordinary and special resolutions required to approve and implement the Acquisition by shareholders of the Seller;
• the release of Etion Create by the relevant funders from, and termination of, all security arrangements given by Etion Create and/or its business in favour of such funders (excluding encumbrances in the ordinary course of business);
• obtaining all necessary written consents and waivers, on an unconditional basis, pursuant to any change in control provisions, broad-based black economic empowerment (B-BBEE) or any other provisions, in terms of material contracts;
• obtaining all necessary consents required to assign and/or transfer the intellectual property held by the Seller and required to conduct the business of Etion Create to the Purchaser and transferring such intellectual property to Etion Create;
• Etion Create receiving the necessary outstanding contracting and export permits;
• no material adverse change (including the cancellation of a material contract) shall have occurred between the signature date of the Sale Agreement and the Closing Date; and
• the approval of the Acquisition by the competition authorities of South Africa.

(collectively, the "Conditions Precedent").

Fulfilment or waiver of the Conditions Precedent shall be possible by no later than 20 November 2022, or such date as may be agreed in writing by the parties to the Sale Agreement.

3.3 Warranties and Indemnities

The Sale Agreement contains warranties and indemnities given by the Seller in favour of the Purchaser, which warranties and indemnities are typical for a transaction of this nature.

Shareholders are referred to the announcement published by the Seller, Etion Limited, on SENS on 20 May 2022, for further information regarding the terms and conditions of the Acquisition https://www.etion.co.za/investor-relations-new/.

4. CATEGORISATION

The Acquisition falls below the threshold for categorisation for Reunert, in terms of the JSE Limited Listings Requirements ("Listings Requirements"), and therefore this is a voluntary announcement provided for information purposes only.

The Company hereby confirms, in accordance with paragraph 9.16 of the Listings Requirements, that nothing contained in the memorandum of incorporation of Etion Create will in anyway frustrate or relieve Reunert from its compliance with the Listings Requirements.

Johannesburg 20 May 2022

Sponsor One Capital