SMRE : acquires control of Sistematica S.p.A

Umbertide (PG), 11 July 2017

S.M.R.E. (SMR:IM), an AIM Italia-listed company specialising in the development of hi-tech solutions in the Automation and Green Mobility sectors, has today signed an investment contract with Sistematica Consulting

S.r.l. and Sistematica S.p.A. that involves the acquisition by SMRE of a 50.9% holding in the share capital of Sistematica S.p.A.

The operation is consistent with the growth strategy of the SMRE Group, which is based on the consolidation of its know-how and offer in the field of software and high added value services for the world of new mobility.

The operation in question is considered significant pursuant to Art. 12 of AIM Italia Issuers' Regulation.

Samuele Mazzini, S.M.R.E. President and Managing Director:"Taking over the Sistematica Group has great strategic importance for us as it gives us a place in the world of connectivity and remote management of vehicles and machinery: in fact, mobility in general is becoming increasingly synonymous of connectivity and efficient energy and time management for both the traditional and electric or hybrid vehicles the Group operates in. Remote management is key if you want to be competitive on the market: everything is moving towards increasing levels of automation and connectivity, even in the field of vehicles where "smart" functionality, now made possible thanks to the Internet of Things, is arousing great interest and is increasingly popular amongst final clients. The Automation division will also benefit from this new technological platform given that, as part of Industry 4.0, it finds itself dealing with exactly the same dynamics as the Green Mobility sector in terms of demand for products that are better connected and controllable remotely. Sistematica has been collaborating with leading clients on a global level for over 20 years and so is the ideal target for the SMRE Group as it is a reality offering solutions that revolve around three main concepts: connectivity, the Internet of Things and the remote management of products and services, such as for example, pay per drive or pay per charge services or the management of fleets and vehicle sharing, where they are absolute pioneers. I am extremely proud we have reached this key goal; in fact, thanks to this takeover we are able to guarantee new products that are highly-innovative and synergic with our completely integrated offer and solutions, which are extremely difficult for our competitors to replicate as, unlike us, they offer components and not integrated systems and complete solutions. The operation has been positively received by our international partners too and the first synergic collaborations have already begun".

With 3 operational branches in Italy and employing over 100 engineers, researchers and developers, the Sistematica Group is a consolidated reality with over 20 years' experience in the development of software platforms and complex integrated systems with particular focus on the following areas:

• satellite remote sensing (geolocation and remote data transmission);

• supervision and control in the automotive and industrial fields (IOT - Internet of Things);

• management and monitoring of large production systems and energy management;

• work flow management and remote billing services (pay per drive and pay per charge);

• big data management (the management and storage of big data linked to remote monitoring of assets).

Sistematica is a pioneer in the development of hi-tech solutions in the field of geolocation, remote control and remote management, proposing clouding-based solutions and the management of large masses of data recorded in the field. Sistematica has products and experience that are easily transferrable to key sectors such as (i) IOT systems (Internet of Things), (ii) connected driving systems (connection and remote management of vehicles and/or services linked to mobility), (iii) systems for the management and efficient use of energy (intelligent management of electric vehicle charging points, energy storage and buffering systems) and (iv) hi-tech systems linked to driverless vehicles, which will not only be cars, but before that agricultural and commercial vehicles or vehicles used for logistical purposes.

In 2016, the production value of Sistematica SpA amounted to 7.7 million Euro, a growth of 11% compared to the previous year's figure of 6.9 million Euro, with an EBITDA of 1 million Euro. At 31 December 2016, the company's net financial debt was 0.5 million Euro and its net worth 4.5 million Euro.

Commercial synergies

Sistematica's prestigious client portfolio and its track record in international projects are an indication of how the group is able to provide the market with solutions that are hi-tech, highly customised and above all, successful. This takeover aims to exploit excellent commercial synergies: Sistematica is in the process of implementing collaboration agreements with current SMRE Group partners interested in software solutions linked to the world of geolocation. Meanwhile, through its subsidiary company IET, the SMRE Group is introducing into its offer Sistematica geolocation and remote-control solutions that will make it possible to provide the market with solutions that, at the moment, no other competitor is able to provide in terms of flexibility or integration. Like thousands of companies around the world, all the companies in the Group are dealing with the transition to a new generation industry that features higher technology products and Sistematica has all the tools needed to favour this global transition.

Technological synergies

Sistematica boasts exceptional and highly-specialised levels of know-how. Research and development are undisputed paradigms for the company. This means all parties benefit from technological synergies thanks to the sharing of the wealth of technological know-how held by both, maximising the level of innovation, which remains the real DNA of both companies.

In recent years, Sistematica has developed processes linked to the connectivity and remote management of the products that are of great value for the SMRE Group. With particular reference to the sharing of technological solutions, this is of great added value to the Group as:

1. it makes it possible to maximize technological know-how by creating products and systems that offer

   - from the moment they are conceived - all the very latest options in terms of connectivity and remote management.

2. it can be used across-the-board for all Group companies: SMRE, IET and Tawaki. Every client and every partner in the Group - whether interested in purchasing a product from the Automation division, a powertrain for electric vehicles produced by the Green Mobility division through the subsidiary IET or a storage battery module produced by the subsidiary Tawaki - can use this common technological platform to offer products with greater functionality and added value for final clients. The remote connectivity of systems, management and monitoring of efficient functioning and remote maintenance are now essential

requirements and the SMRE Group can now offer turnkey solutions, thus further promoting loyalty amongst its clients.

The operation - which involves the purchase of shares in Sistematica S.p.A. owned by Sistematica Consulting S.r.l., the purchase of own shares held by Sistematica S.p.A. and the underwriting of capital increase by SMRE in Sistematica S.p.A. - envisages overall investment by SMRE of 3,500,000 Euro.

A share of the amount paid to Sistematica Consulting S.r.l. for the purchase of shares in Sistematica S.p.A. by SMRE, for 1,900,000 Euro, will be used by the vendors to settle the amount due to Sistematica S.p.A. for company restructuring interventions that should be terminated by the operation completion date. SMRE intends to pay the amount using its own funds.

At the same time as completing the operation, expected before the end of July, special shareholders' agreements will be drawn up in order to guarantee that some Sistematica Consulting S.p.A. shareholders that also cover key managementroles within the company remain at Sistematica S.p.A., all in respect of the position of the controlling shareholder of Sistematica S.p.A., in other words, SMRE.

It is also envisaged that once the operation has been completed, special call option agreements will be drawn up, by virtue of which, upon expiry of specific time frames set by contract, SMRE will have the right to acquire the entire remaining share held by Sistematica Consulting S.r.l. in Sistematica S.p.A., equal to approximately 29% of post-closing share capital. Agreements envisage that, before exercising this option Sistematica Consulting S.r.l. must acquire the entire shareholding held in Sistematica S.p.A. by the shareholder Gepafin S.p.A., equal to 13% of post-closing corporate capital. Exercising the call option for the overall shareholding mentioned above will be made on the basis of the same evaluation methods adopted for SMRE to acquire the 50.9% share in Sistematica S.p.A., a minimum agreed price of 10,000,000 euro being understood.

The press release is available on the following websites: www.smre.itandwww.emarketstorage.com

ISIN: IT0005176299; ISIN Warrant S.M.R.E. 2016-2019: IT0005176463