Innofactor Oyj - Tender offer

Innofactor and Swedish Cinteros AB to Merge – Innofactor Continues its Expansion in the Nordics

Innofactor Plc Stock Exchange Release December 22, 2015, at 08:30 Finnish time

With an agreement signed last night, Innofactor has agreed to acquire the
entire share capital of the Swedish company Cinteros AB from its management.
Cinteros is one of the leading Swedish IT services companies focusing on
providing Microsoft Dynamics CRM -based solutions by its over 100 employees.
The acquisition supports Innofactor’s Nordic growth strategy and strengthens
Innofactor’s position as one of the leading service providers in the Microsoft
Ecosystem in the Nordic countries. 

Cinteros AB – the No 1 Microsoft Dynamics CRM player in Sweden with an
excellent track record of fast and profitable growth 

Cinteros is focusing on providing Microsoft Dynamics CRM -based solutions
supporting the entire business process in selected industries such as labor
unions and other membership organizations, service companies, educational
organizations, real estate, construction and the public sector. The company is
highly ranked Microsoft Dynamics CRM Partner in Sweden, and has been awarded as
the Microsoft Dynamics CRM Partner of the Year in Sweden for several years.
Cinteros’ customers include companies like Svenskt Näringsliv, IF Metall,
Kommunal, Vision, Riksbyggen, Scandic and Sodexo. 

The net sales for the last fiscal year (January 1 to December 31, 2014) were
approximately 7.9 million euros (approximately 73 million SEK), with a 43%
growth from previous year. The operating profit (EBITDA) was approximately 0.7
million euros (approximately 6.9 million SEK) and the EBITDA margin was
approximately 9%. The net sales for the current fiscal year 2015 is estimated
to be approximately 11 million euros (approximately 100 million SEK) and EBITDA
approximately 9%. The company employs over 100 people in Stockholm, Gothenburg
and Malmö. Cinteros and its financials will be consolidated into Innofactor
Group from January 1, 2016. 

Purchase price, Payment and Financing

The purchase price will depend on Cinteros’ realized EBITDA during 2016 and the
sales growth during 2017. The minimum net debt free purchase price (Enterprise
Value) is approximately 2.7 million euros (approximately 25 million SEK) and is
paid in Swedish kroner at closing of the deal in January 2016. The rest of the
net debt free purchase price of maximum of approximately 5.3 million euros
(approximately 49 million SEK) is intended to be paid with Innofactor Plc’s
shares in 2017 and 2018. The maximum net debt free purchase price (Enterprise
Value) is approximately 8.0 million euros (approximately 74 million SEK). The
cash payment to the Sellers’ at closing is estimated to be approximately 2.9
million euros (approximately 27 million SEK) and is intended to be financed
partly with a new maximum 2.7 million euros bank loan. 75% of the shares are
subject to transfer restrictions which are gradually released during a period
of 36 months starting from the date of the purchase price payment in shares. 

All four sellers are a part of the acting management of Cinteros who all
continue in the Innofactor Swedish management team. CEO of Cinteros’ Robert
Erlandsson continues as a managing director of Innofactor Sweden, and becomes
Innofactor’s country manager in Sweden and a new member of the Innofactor Group
Executive Board. 

Cinteros AB will change its name into Innofactor AB in mid-2016 and after that
Cinteros’ services will be offered under the Innofactor brand. Integration of
Cinteros and Innofactor operations will start immediately and the goal is to
implement significant parts of it by the end of year 2016. 

Innofactor’s Nordic Growth Strategy Progresses

With Cinteros acquisition Innofactor’s total number of Microsoft based
competence and expertise grows to over 500 employees in the Nordic countries. 
Companies in Sweden, Finland and Denmark have together a strong customer base
covering commercial, public sector and third sector customers. Cinteros
strengthens Innofactor’s comprehensive Microsoft-based solutions, products and
services portfolio in the Nordics. This acquisition will bring significant
cross-sales opportunities for Cinteros’ customer vertical based solutions in
Finland and Denmark, and on the other hand provide Innofactor’s services in
Sweden for Cinteros’ customers. The new Innofactor will also reach more
attention from Microsoft on all levels in Sweden, in Western Europe and
globally. 

 “Acquisition of Cinteros is an important step in Innofactor’s Nordic growth
strategy and provides an excellent platform to grow a substantial
Microsoft-focused business in Sweden and in other Nordic countries. High level
of competence and strong customer base of Cinteros complement extremely well
Innofactor’s current business operations”, says Sami Ensio, the founder and CEO
of Innofactor. 

 “The demand for Dynamics CRM -based solutions has increased tremendously in
recent years in Sweden. We are also excited about the opportunity to expand our
offering with other productivity solutions offered by Innofactor, for which we
also see significant market potential”, says Robert Erlandsson, the CEO of
Cinteros AB, who through the merger will become country manager of Innofactor
in Sweden and a member of the Executive Board of Innofactor Group. 

Cinteros AB key financials

Cinteros AB's net sales, EBITDA and operating income in the financial periods
from January 1 to December 31, 2014 and January 1 to December 31, 2013 were
according to Swedish Accounting Standards as follows (thousand euros): 

Thousand euros           Jan 1 to Dec 31,2014  Jan 1 to Dec 31,2013
Net Sales                               7,850                 5,570
EBITDA                                    685                   678
Operating Profit (EBIT)                   679                   663

Cinteros AB’s balance sheets on December 31, 2014 and December 31, 2013 were as
follows (thousand euros*): 

Thousand euros                  Dec 31, 2014  Dec 31, 2013
Fixed Assets                              70            70
Receivables and current assets         2,883         1,996
Total                                  2,953         2,066
Equity                                 1,365           841
Liabilities                            1,588         1,226
Total                                  2,953         2,066

The currency rate used in the above figures: 1 euro = 9.30 Swedish crowns.



Espoo, December 22, 2015

INNOFACTOR PLC

Sami Ensio, CEO


Additional information:

Sami Ensio, CEO
Innofactor Plc
Tel: +358 50 584 2029



Briefings concerning the acquisition

On December 22, 2015, at 8:30 Finnish time, Innofactor will hold a briefing
concerning the acquisition in Finnish for investors and analysts at
Innofactor’s offices in Keilaranta 9, 02150 Espoo, Finland. 

During the same day on December 22, 2015 at 11:30 Finnish time, Innofactor will
hold a press conference concerning the acquisition in Finnish for the Finnish
media at Glo Hotel Kluuvi in Kluuvikatu 4, 00100 Helsinki, Finland. 

In both events, the acquisition and its effects will be presented by
Innofactor's CEO Sami Ensio and Chairman of the Board Ari Rahkonen. The
presentations of the briefings will be available on Innofactor's web site after
the briefings. Admission to both events is free. 

Innofactor will also hold a conference call in English for analysts, media and
investors on Tuesday, December 22, 2015, at 16:00 Finnish time. Registrations
to ir@innofactor.com before 14:00 Finnish time on Tuesday, December 22, 2015. 


Distribution:

NASDAQ OMX Helsinki
Main media
www.innofactor.com



Innofactor
Innofactor is one of the leading Nordic IT solution providers focused on
Microsoft platforms. Innofactor delivers business critical solutions and
maintenance services as a system integrator and develops its own software
products and services. Innofactor’s own product development is focused on
Microsoft -based cloud solutions. Innofactor's customers include over 1,000
private and public sector organizations in Finland, Denmark, Sweden, and
elsewhere in Europe. The company has over 400 (over 500 in Jan/2016) motivated
and skilled employees in several locations in Finland, Denmark and Sweden. From
2010 to 2014, Innofactor's annual net sales growth has been 45% on average.
Microsoft has named Innofactor Plc as the Finnish Partner of the Year in 2015.
Innofactor was also selected into the Microsoft’s international finals in two
categories. The Innofactor Plc share is listed in the technology section of the
main list of NASDAQ OMX Helsinki Oy. www.innofactor.com 

Cinteros
Cinteros is focusing on providing Microsoft Dynamics CRM -based solutions
supporting the entire business process in selected industries such as unions
and other membership organizations, service companies, educational
organizations, real estate, construction and the public sector. The company has
over 100 motivated and skilled employees in three locations in Sweden. From
2010 to 2014, Cinteros’ annual net sales growth has been 19% on average. The
company is highly ranked Microsoft Dynamics CRM Partner in Sweden, and has been
awarded as the Microsoft Dynamics CRM Partner of the Year in Sweden for three
consecutive years. Cinteros’ customers include large Swedish organizations both
in public and private sector, including companies like Svenskt Näringsliv, IF
Metall, Kommunal, Vision, Riksbyggen, Scandic and Sodexo. www.cinteros.se