RB: 41/2021
Date: November 4, 2021
Acquisition of Total Fitness sp. z o.o.
Legal basis: Art. 17 item 1 of MAR – inside information.

Text of the report:

Management Board of Benefit Systems S.A. with its registered seat in Warsaw (the "Issuer") hereby announces that on November 4, 2021, the Issuer, as the buyer, concluded with, inter alia, shareholders of Total Fitness Sp. z o.o. with its registered seat in Warsaw ("Company"), i.e. with the main shareholder of the Company - Blokada Holding AB with its registered seat in Stockholm (a subsidiary of Mr Aleksander Wilewski) and Ms Katarzyna Krajewska and Mr Maciej Krajewski (hereinafter jointly as the "Sellers"), agreement for the sale of shares in the Company ("Agreement"). The Sellers are not related to the members of the Issuer's governing bodies.

Under the Agreement:

1) On the date of the Agreement, the Issuer acquired 4,603 shares, representing 88.23% of the share capital of the Company,
2) The Issuer will acquire 614 shares, representing 11.77% of the share capital of the Company, after the purchase price of these shares is settled.

In total, the subject of the Agreement is the sale to the Issuer of 5,217 shares, constituting 100% of the share capital of the Company.

The selling price of the Company's shares is not less than PLN 75 million and not more than PLN 85 million, and its final amount depends on the Company's EBITDA and the Company's net debt for 2022 or 2023, calculated in accordance with the provisions of the Agreement. The Company's EBITDA for 2022 or 2023 entitling to obtain the selling price of the Company's shares above the minimum price is PLN 9.375 million. Under the Agreement, the Issuer is entitled to set off the claims the Issuer is entitled to against the Sellers of the Company's shares with the price for these shares.

Settlement of the price under the Agreement is effected as follows:

(i) the first installment of PLN 50 million was paid on November 4, 2021,
(ii) the second installment of PLN 20 million will be paid by January 3, 2022 or April 1, 2022, depending on the fulfillment of the conditions specified in the Agreement,
(iii) the third installment in the amount of PLN 5 million will be paid on April 3, 2023 or April 1, 2024, depending on the fulfillment of the conditions specified in the Agreement,
Any adjustment of the selling price of the Company's shares (depending on the Company's EBITDA and the Company's net debt for 2022 or 2023) will take place on April 3, 2023 or April 1, 2024.

Within 3 years from the conclusion of the Agreement, the disposal of the Company's shares by the Sellers will depend on the consent of the Issuer.

The Agreement also specifies other obligations of the parties to the Agreement i.a. regarding the security of its implementation (including put and call options) and others not deviating from the applicable standards for this type of agreement.

The Company conducts business within 14 fitness clubs located in the most important districts of Warsaw, Piaseczno, Pruszków, Gdańsk and Radom (14 clubs in total). In 2020, the above-mentioned fitness clubs generated revenues of PLN 21.9 million and normalized EBITDA of PLN 3.7 million.