Tinexta S p A : Acquisition of 20% of Defence Tech Holding

Acquisition of 20% of Defence Tech Holding

29 December 2022

Agenda

1

Executive Summary

Josef Mastragostino, Chief IRO

2

Transaction details & strategic rationale

Oddone Pozzi, CFO

3

Financials

Oddone Pozzi, CFO

4

Closing remarks

Josef Mastragostino, Chief IRO

5

Q&A

2

1 M&A: Acquisition of 20% of Defence Tech Holding

1/2

Tinexta Group to acquire 20% of Defence Tech Holding for € 4.9 per share, equal to about € 25 million

• Deal and Structure considerations:
• • Tinexta signed a binding agreement to purchase a 20% stake of Defence Tech Holding S.p.A. via a wholly-owned vehicle (Tinexta's Vehicle)
  • • The purchase of a minority stake, pro rata from its current reference shareholders (the sellers), which will initiate a reverse accelerated book building for the pro rata purchase on the market of approximately 1.4M shares (equal to approximately 5.6% of the share capital) at the price of € 4.9 per share
    • Contextual subscription of a call option for the remaining stakes of the selling shareholders* to be potentially exercised in 2024 following the approval of FY'23 results. (Call option pricing is set at: 2023 EBITDA Adjusted x 12, plus pro rata Adj. NFP)
    • Should such call option be exercised by Tinexta, it would trigger a takeover bid (Public Offer) to be launched on the whole share capital not owned (should the call option not be exercised by Tinexta's Vehicle, the selling shareholders* could exercise a call** to purchase back the 20%)
    • Following the launch of the takeover bid (Public Offer), the current shareholder "Starlife" - comprised of the company's management - has already expressed its intention to: (i) tender a portion of the shareholding representing 3% of the Issuer's share capital in acceptance of the Offer and, following completion of the Offer, (ii) confer the residual portion of the Issuer's shareholding in Tinexta's Vehicle
    • As a result of the transfer and in the event of a successful tender offer, the Vehicle Tinexta would be held for about 85% by Tinexta and about 15% by Starlife and would hold 100% of Defence Tech, which would no longer be listed
    • There is also a put/call option in place between Tinexta and Starlife regarding Starlife's stake in the Vehicle exercisable in 2029, to be settled in cash at fair market value
  • Equity Value for 100% consideration is equal to € 125M, equivalent to € 4.9 per share
  • 100% Cash payment at closing
• Strategic Rationale & Value creation:
• • Defence Tech Holding (DTM:IM) is a listed company on the Euronext Growth Milan market and is an Italian operator of strategic importance for national security
  • • Founded in 2010 and headquartered in Rome, the company has undertaken a growth journey in order to create a pole of excellence and technological innovation
    • Group of professionals, with strong technological and business skills, combined with proprietary solutions make Defense Tech a technological hub that is increasingly a reference point for the protection of the strategic assets of institutions and private companies
    • The group has proprietary Cyber ​​Communication, End Point Protection and Technology for Intelligence solutions and technological laboratories dedicated to security and Ce.Va. (Evaluation Center authorized to conduct security assessments in accordance with the provisions of the "National Scheme for the evaluation and certification of information technology security") accredited

*Comunimpresa S.r.l. and GE.DA Europe S.r.l.	3
**At the higher of the price paid by Tinexta at the time of the purchase of the 20% and the price of the Tinexta Call for the 20% share

1 M&A: Acquisition of 20% of Defence Tech Holding

2/2

Tinexta Group to acquire 20% of Defence Tech Holding for € 4.9 per share, equal to about € 25 million

• Acquisition to allow:
• • Consolidated presence in the government sector, acting as a partner on areas of strategic importance for national security
  • Acquisition of a strategic customer package, Defence Tech boasts a loyal and high-standing customer package which includes Public and Government Bodies, institutions and leading companies in their sectors (Italian Navy, MBDA and Fincantieri)
  • Increase of brand awareness, Defence Tech is an established brand within the market also thanks to the accreditations on security and permissions
  • Expansion of the offer and skills, the company has a strong specialization in services and products for the protection of critical infrastructures that are highly complementary to the products and services of the Cyber ​​BU
• Solid Financial Fundamentals:
• • 1H 2022 Value of production: € 12.88M, +16% vs PY, EBITDA Adjusted: € 4.06M, NFP is positive at € 8.1M
  • FY 2021 Value of production: € 22.65M, +19% vs PY, EBITDA Adjusted: € 6.71M, NFP is positive at € 12.3M
  • LTM 1H 2022 Value of production: € 24.40M, EBITDA Adjusted: € 7.26M
  • Products Sales (main driver of EBITDA growth) doubled in 2021 vs PY
  • Following the Transaction, Tinexta and Defence Tech will develop a plan for industrial and commercial synergies between the two Groups
  • Potential synergies will involve cross-selling and upselling products both from Defence Tech to Tinexta's Cyber corporate clientele as well as from Tinexta Cyber to Defence
    Tech's government customers
  • Expected cash out at closing: € 25M
• Approvals & Timing:
• • Closing, expected by the first half of 2023, is subject to the usual conditions for this type of transactions, including the Golden Power Rule, Conditions precedent and obtaining confirmation from Borsa Italiana's S.p.A. Panel about the non-existence of the obligation to promote a takeover bid following the mere signing of the Tinexta Call

4

1 The Group's perimeter - The stake in Defence Tech

	• Initial 20% stake at closing
Vehicle	• Call option on remaining stakes of sellers
• Equity Value: €125M or €4.9 per share

Digital Trust

Cyber Security

Business Innovation

• Refers to IT solutions for digital identity and the dematerialization of processes according to the applicable legislation.
• Products and services such as certified electronic mail, electronic archiving, digital signature, electronic invoicing, and solutions for the secure and simplified transmission of legal and financial documents.

• Strategic infrastructure and a key asset for the protection of citizens and their "social economy".
• To create the national cybersecurity hub, with custom and proprietary solutions for the mitigation and governance of risks related to the digital sector, pursuing the evolution of platforms and offer controls, as well as innovation profiles.

• Through Co.Mark and Warrant Group, offers a consultancy platform to SMEs to support them in phases of manufacturing growth, digital marketing and expansion of commercial activities, including abroad.

2021 Results

88.2%

100%

100%

88%

100%

			51%	70%	60%
€131M	28%	€36M	€73M	14%	€10M	€95M	43%	€41M
EBITDA	EBITDA	EBITDA	EBITDA	EBITDA	EBITDA
Revenues	Revenues	Revenues
Margin	Adj.	Margin	Adj.	Margin	Adj.

BU Revenues and EBITDA data do not include intra-sectoral intercompany and Tinexta S.p.A. costs

5