TAKKT AG : Ad-hoc: Acquisition of leading US direct marketing company for display articles

Ad-hoc statement, 22 March 2012

Today, the TAKKT Group company K+K America Corporation has signed a contract to acquire George Patton Associates, Inc. (GPA), based in Rhode Island, USA. The Supervisory Board of TAKKT AG has already approved the transaction. The contract is subject to the customary closing conditions, e.g. the expected approval of the cartel authorities. By acquiring the B2B direct marketing company for display articles, TAKKT strengthens its US portfolio. The new company will form a part of the Specialties Group within TAKKT AMERICA.

With multiple web sites serving many industries, GPA generated turnover of ca. USD 52 million and an EBITDA margin of ca. twenty percent in 2011. This makes GPA a leading B2B direct marketing specialist in the US display product category. Approx. eighty percent of turnover is generated online. Therefore, the acquisition is an ideal addition for TAKKT.

A purchase price to be paid in two instalments was agreed on for acquiring the entire interest in GPA. On the closing date (expected in early April), a first instalment will approx. be USD fifty million. A second instalment was stipulated for early 2015. The minimum guaranteed amount of this second payment will be USD 48 million. A supplemental variable earn-out opportunity up to approx. USD 22 million is based on three year turnover goals. The current owners have agreed to long-term employment contracts and will remain responsible for management after the transaction has been closed. TAKKT funds the acquisition with already committed long-term credit lines. Even after closing the transaction and paying out the proposed dividend of 85 cents per share in May 2012, TAKKT will still have a very solid balance sheet structure with an equity ratio of more than forty percent.