AEL: ALLIED ELECTRONICS CORPORATION LIMITED - Voluntary announcement relating to the acquisition by Altron of Ubusha Technologies. Voluntary announcement relating to the acquisition by Altron of Ubusha Technologies. Allied Electronics Corporation Limited (Registration number 1947/024583/06) (Incorporated in the Republic of South Africa) Share code: AEL ISIN: ZAE000191342 ("Altron" or "the Company") VOLUNTARY ANNOUNCEMENT RELATING TO THE ACQUISITION BY ALTRON OF UBUSHA TECHNOLOGIES 1. INTRODUCTION The board of directors of Altron ("the Board") is pleased to announce that the Company has concluded a Share Sale Agreement on 6 December 2019, through its wholly owned subsidiary, Altron TMT SA Group Proprietary Limited, to acquire the entire issued share capital of Gydan Investments (RF) Proprietary Limited ("Gydan"), the holding company of Ubusha Technologies Proprietary Limited ("Ubusha") with an anticipated effective date of 1 March 2020 ("the Acquisition"). 2. NATURE OF THE ACQUIRED GROUP Founded in 2003, Ubusha is the largest identity security provider in Africa and provides its clients with identity security solutions for their workforce, suppliers and customers. Ubusha combines best of breed software from global industry leaders together with its core intellectual property, and professional and managed services to provide identity based security solutions. Identity security is an essential foundation for customers´ digital transformation strategies and governance structures. Ubusha, as a next-generation IT security services provider enables dynamic authentication and authorisation, identity management and governance and privileged account security for leading local and international banking, financial services, insurance, telecommunications and retail customers. 3. RATIONALE FOR THE ACQUISITION The Acquisition significantly enhances Altron´s existing capability in the IT security market, one of the group´s strategic growth areas, others being cloud, IoT and data analytics. Altron is already a significant player in IT security and together with Ubusha, Altron will also be the industry leader in identity security in Africa, an increasingly critical component of the security market. Through Ubusha, Altron will strengthen its capabilities and will now be able to offer customers a securely managed identity profile for their clients across devices, platforms and locations. Altron has the geographic footprint, extensive customer base and complimentary security offerings to continue the growth trajectory of Ubusha into new markets and customer segments. The Board is of the opinion that the Acquisition of Ubusha will materially enhance its security capabilities, accelerate its market positioning and provide a strong and strategic platform for the creation of a stand-alone security business. 4. PURCHASE CONSIDERATION The purchase consideration of a maximum of R360 million equates to a 9x EBITDA multiple based on warranted EBITDA of R40 million for the 12 months ending 29 February 2020. A portion of the purchase consideration is payable in cash on the closing date, together with a) payment in the form of Altron shares (representing 0.41% of Altron´s issued share capital) which are under the control of the directors as granted by shareholders at the annual general meeting held on 10 July 2019, b) an adjusted payment and c) two deferred payments to follow thereafter. 5. CONDITIONS PRECEDENT The Acquisition is subject to the fulfilment or waiver (as the case may be) of, inter alia, the following conditions precedent: o the passing of resolutions by the respective board of directors of each of the sellers and the purchaser giving their unconditional approval of the Acquisition contemplated in the agreements related hereto, insofar as not yet obtained before the conclusion of the Share Sale Agreement; o Competition Commission and regulatory approvals; and o the successful conclusion of service contract commitments with key managers and staff. The Share Sale Agreement contains warranties and indemnities that are standard for a transaction of this nature. 6. CATEGORISATION OF THE ACQUISITION The Acquisition is below the 5% ratio in terms of the Listings Requirements of the JSE for a Category 2 announcement and is made on a voluntary basis. 7. FURTHER INFORMATION A conference call will be hosted by the Company at 12:15 today, 9 December 2019. Interested parties are requested to register their attendance at: www.diamondpass.net/8694260. By order of the Board. Johannesburg 9 December 2019 Sponsor Investec Bank Limited Date: 09-12-2019 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.