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SIEVI CAPITAL PLC AND BOREO PLC HAVE SIGNED A COMBINATION AGREEMENT

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SIEVI CAPITAL PLC AND BOREO PLC HAVE SIGNED A COMBINATION AGREEMENT

SIEVI CAPITAL PLC
INSIDE INFORMATION
29 September 2021 at 9:00 am EEST

NOT FOR DISCLOSURE OR DISTRIBUTION IN OR INTO THE UNITED STATES, OR IN ANY OTHER JURISDICTION WHERE DISCLOSURE OR DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW.

The Boards of Directors of Sievi Capital Plc (“Sievi Capital”) and Boreo Plc (“Boreo”) have today signed a combination agreement (the “Combination Agreement”) and a merger plan to combine the companies through a merger (the Future Company”). The name of the Future Company will be Boreo Plc.

The Future Company will be one of the leading growth platforms of Nasdaq Helsinki Ltd (“Nasdaq Helsinki”) Stock Exchange for small and medium-sized companies that, with its strong financial position and strong independent business operations, will have good preconditions for growth in Northern Europe in the long term. In 2020, the Future Company's preliminary illustrative combined net sales were approximately EUR 474 million and adjusted EBITDA approximately EUR 59 million, of which the illustrative minority share is EUR 21 million. The Future Company will employ approximately 1,700 people.

Transaction Highlights

  • The proposed combination will be implemented as a statutory absorption merger pursuant to the Finnish Limited Liability Companies Act whereby Sievi Capital will merge into Boreo. The Board of Directors of Boreo proposes to the Extraordinary General Meeting of Boreo to be held prior to the completion of the combination that the Extraordinary General Meeting authorises the Board of Directors of Boreo to decide on a share issue without payment in which Boreo's shareholders are issued new shares without payment in proportion to their holdings so that fourteen (14) new Boreo shares are issued for each share (share split). Similarly, new shares will be issued without payment to Boreo on the basis of its treasury shares. The new shares will be issued immediately before the registration of the completion of the combination.

  • Upon completion, Sievi Capital's shareholders will receive 0.4492 new shares in Boreo for each share they held in Sievi Capital on the record date as merger consideration. This implies that the shareholders of Sievi Capital would then hold approximately 40 per cent and the shareholders of Boreo approximately 60 per cent of the shares and votes in the Future Company. The merger consideration shares will be listed on Nasdaq Helsinki Stock Exchange in connection with the merger.

  • This conversion rate included a 42.1 per cent premium for Sievi Capital’s shareholders compared to the closing price of Sievi Capital’s share on 17 August 2021 before the disclosure of the letter of intent. Using the one (1) month volume-weighted average prices of the companies up to 17 August 2021, the premium was 24.0 per cent and with three (3) month volume-weighted average prices up to 17 August, it was 16.8 per cent.

  • Before the Effective Date, Boreo has the right to distribute to its shareholders the second instalment of the dividend decided by its Annual General Meeting on 15 April 2021, which is EUR 0.20 per share.

  • The Future Company’s strategy will be based on the basis of Boreo's current strategy, acknowledging the business and strengths of the new combined entity. The details of the strategy and the strategic financial objectives of the Future Company will be disclosed after the completion of the combination.

  • As a result of the combination, Sievi Capital's target companies will become part of the operations of the Future Company. The Future Company will develop its businesses in the long term and without an intention of divesting them.

  • Sievi Capital and Boreo have obtained necessary commitments for the financing of the completion of the merger.

  • The combination requires, among other things, approval by a majority of two-thirds of votes casts and shares represented at the Extraordinary General Meetings of Boreo and Sievi Capital and the obtaining of merger control approvals. Completion is expected to take place in the first half of 2022, provided that all the conditions for completion are met.

  • Preato Capital AB, the majority shareholder of Sievi Capital and Boreo, representing approximately 23.23 per cent of the shares of Sievi Capital and approximately 72.91 per cent of the shares of Boreo, has undertaken, under certain normal terms and conditions, to vote irrevocably in favour of the combination. The representatives of Preato Capital AB have not participated in the decision-making on the combination of the Boards of Directors of Sievi Capital and Boreo.

  • The combination is unanimously recommended by the Board of Directors of Sievi Capital and Boreo to their respective shareholders.

  • It is proposed that the Board of Directors of the Future Company is composed of four (4) Sievi Capital's current Board members (Juha Karttunen, Kati Kivimäki, Taru Narvanmaa, Lennart Simonsen), four (4) Boreo’s current Board members (Camilla Grönholm, Jouni Grönroos, Ralf Holmlund, Michaela von Wendt) and Simon Hallqvist who is acting in the board of directors of both companies. It is proposed that the Future Company’s Chairman will be Simon Hallqvist. The Boards of Directors of Boreo and Sievi Capital have agreed that Kari Nerg, Boreo's current CEO, will be the CEO of the Future Company.

Lennart Simonsen, Chairman of the Board of Directors of Sievi Capital: “During the spring and summer, the Board of Directors of Sievi Capital assessed the company's strategic options for creating shareholder value. After a comprehensive review, the Board of Directors settled on that a combination with Boreo would be the most proprietary solution to create shareholder value in the opinion of the Board of Directors. With the planned combination, the shareholders of Sievi Capital will be able to continue as owners of the Future Company.”

Jouni Grönroos, member of the Board of Directors of Boreo and chairman of the committee that is independent of the main owner: “Together, Boreo and Sievi Capital will form one of the leading growth platforms for small and medium-sized companies in Finland. The transaction is a logical next step on Boreo's strategy path, which started in 2019 with the change of the main owner and has progressed with determination with the implementation of the company's new strategy. The proposed combination will create strong financial conditions for growth and for increasing the Future Company’s shareholder value.”

Jussi Majamaa, CEO of Sievi Capital: “As the new CEO of Sievi Capital, I am enthusiastic about the possibility of implementing a significant transaction, as a result of which Sievi Capital and Boreo will together create a strong and growth-oriented listed company with a well-diversified portfolio of interesting group companies. This benefits Sievi Capital's shareholders and customers as well as employees of the target companies.”

Kari Nerg, CEO of Boreo: “The Future Company will be well placed to create growth through a decentralised entrepreneurial operating model, and the proposed combination strengthens the value proposition of being a best-in-class home for its companies and people. The Future Company will be an even more competitive partner for its customers and clients, and the company's ability to attract talented experts will be further increased.”

The Key Rationale of the Combination

The proposed combination between Sievi Capital and Boreo will create the following value-creating strengths:

  • The proposed combination will create one of the leading growth platforms for small and medium-sized companies on the Nasdaq Helsinki Stock Exchange: a decentralised entrepreneurial operating model will enable scalability and the combination will significantly increase the size of the companies. The Future Company's business operations will be diversified among various industries, and its dependency on individual client and customer relationships is low. Geographically, the Future Company will also be more strongly diversified in Northern Europe. The Future Company will have business operations inter alia in Finland, Sweden, Baltics and Russia.

  • Even stronger financial position and conditions for the Future Company's acquisition-driven growth: a strong financial position provides a basis for the implementation of an acquisition-driven strategy and significant growth.

  • Even better and stronger conditions for the growth and development of independent businesses and personnel: The Future Company will create even better conditions for the improvement of operational efficiency, the utilisation of best practices, synergies between businesses and a stronger offering to its customers, suppliers and other stakeholders. For personnel, the Future Company offers even better opportunities for development and growth.

Future Company

Overview

In 2020, the Future Company's preliminary illustrative combined net sales were approximately EUR 474 million and adjusted EBITDA approximately EUR 59 million, of which the illustrative minority share is EUR 21 million. On 30 June 2021, Sievi Capital and Boreo had a total of 1,712 employees.

The name of the Future Company will be Boreo Plc. The head office of the Future Company will be located in Vantaa.

Strategy and Value Creation Model

The Future Company’s strategy will be based on Boreo's current strategy, acknowledging the business operations and strengths of the new combined entity. The Future Company will serve as a growth platform for its companies and employees, create growth through acquisitions and organically, and focus on creating operative efficiencies and shareholder value in the long term. The main focus areas of the Future Company's strategy will be in accordance with Boreo’s current strategy:

  • Acquisitions - The Future Company will generate growth through acquisitions and be expanded to new areas and industries through platform acquisitions. The business operations of the Future Company will be increased by acquiring independent – strengthening – companies, in addition to which the current business operations will be strengthened by add-on acquisitions.

  • Operative efficiency - The Future Company will develop a systematic way to improve operative efficiency and give a better basis for improving organic growth and profitability

  • People & Culture - Developing employees and providing opportunities for people is at the heart of the Future Company's value creation model. The entrepreneurial approach of Sievi Capital and Boreo creates a strong foundation for the development of culture in the combined company.

In Boreo's decentralised entrepreneurial model, companies are developed independently and in the long term, without an intention of divesting them. In order to enable the development of operative efficiency and to ensure the commitment and encouragement of the key personnel, the combination will explore the possibilities of harmonising the ownership structures of Sievi Capital portfolio companies.

The objective of the Future Company is to own companies that are profitable, predictable, have strong cash flow and use capital efficiently. The Future Company offers an attractive operating model for owners of small and medium-sized companies and support in the strategy planning and implementation for its companies, and encourages acquisitions, investments and growth. The Future Company will enable the use of best practices and achieves synergies between the group companies. In order to achieve synergies in financing, the aim is to organise the financing of the business operations mainly at the group level.

The Future Company’s strategy and optimal structure of business operations will be planned after the completion of the combination. In accordance with Boreo's current operating model, the Future Company's business operations would remain as independent units.

Board of Directors and the Management

It is proposed that the Board of Directors of the Future Company is composed of four (4) Sievi Capital's current Board members (Juha Karttunen, Kati Kivimäki, Taru Narvanmaa, Lennart Simonsen), four (4) Boreo’s current Board members (Camilla Grönholm, Jouni Grönroos, Ralf Holmlund, Michaela von Wendt) and Simon Hallqvist who is a member of the board of directors in both companies. It is proposed that the Future Company’s Chairman will be Simon Hallqvist.

The Boards of Directors of Sievi Capital and Boreo have agreed that Kari Nerg will become the CEO of the Future Company.

Ownership Structure and Governance

The Board of Directors of Boreo proposes to the Extraordinary General Meeting of Boreo to be held before the Effective Date that the Extraordinary General Meeting authorises the Board of Directors of Boreo to decide on a share issue without payment in which Boreo's shareholders are issued new shares without payment in proportion to their holdings so that fourteen (14) new Boreo shares are given for each share (share split). Similarly, new shares will be issued without payment to Boreo on the basis of its treasury shares. Based on the number of shares on the date of this stock exchange release, a total of 36,642,508 new shares would be issued. The total number of shares in Boreo would thus be 39,259,830. The new shares will be issued immediately before the registration of the completion of the merger.

The Board of Directors of Boreo may propose to the Extraordinary General Meeting to be held before the Effective Date of the combination that the Extraordinary General Meeting agrees to replace the share issue authorisation decided by the Annual General Meeting on 15 April 2021 with a new authorisation, in which the maximum number of shares to be issued under the authorisation increases in proportion to the share split. It is proposed that the authorisation takes effect on the Effective Date of the combination and remains in effect until the closing of the first Annual General Meeting following the Effective Date of the combination.

In connection with the completion of the merger, Sievi Capital’s shareholders will receive as merger consideration 0.4492 new Boreo shares for each Sievi Capital share held on the record date, in which case after the completion Sievi Capital’s shareholders will own approximately 40 per cent and Boreo’s shareholders approximately 60 per cent of the shares of the Future Company, assuming that no Sievi Capital’s shareholder demands redemption of his/her/its shares at the Extraordinary General Meeting of Sievi Capital resolving on the merger.

The following table illustrates the ten (10) largest registered shareholders of the Future Company as per 15 September 2021, assuming all current shareholders of Sievi Capital and Boreo are shareholders with unchanged holding also at the completion of the combination.

Shareholder

Amount of shares

% of shares 1)

PREATO CAPITAL AB

34 683 623

53.2%

LAAKKONEN MIKKO KALERVO

1 633 622

2.5%

TAKANEN MARTTI TAPIO

877 834

1.3%

AK CAPITAL OY

525 000

0.8%

SULIN ARI W

408 000

0.6%

MOILANEN MIKKO PETTERI

384 375

0.6%

SIRVIÖ KARI SIMO TAPANI

332 415

0.5%

MÄÄTTÄ MIKKO OLAVI

317 655

0.5%

SILVENNOINEN JANNE

315 863

0.5%

RUMPUNEN AKU VÄINÄMÖ

300 000

0.5%

Top 10 total

39 778 387

61.0%

Other

25 444 767

39.0%

Total

65 223 154

100.0%

1) The table shows the ten (10) largest shareholders in the Future Company (15 September 2021), assuming that all shareholders of Sievi Capital and Boreo are shareholders with the same shareholdings at the time of the merger (excluding treasury shares and after the share split in Boreo prior to or in connection with completion in which 1 share is split to 15 shares).

As part of the combination, it is also proposed that the Extraordinary General Meeting of Boreo to be held prior to the completion of the merger should conditionally decide on the establishment of a Shareholders' Nomination Board for the Future Company and conditionally approve its Charter entering into force upon the completion of the merger. The Nomination Board shall have four (4) members. One of the members is the Chairman of the Board of Directors of the Future Company or another member who is elected by the Board of Directors of the Future Company from among its members. The other members of the Nomination Board shall be nominated by the three (3) largest shareholders, each of whom shall have the right to nominate one (1) member. The Charter is appended to the merger plan, included as Annex 1 to this stock exchange release.

Articles of Association

Pursuant to the merger plan, the Board of Directors of Boreo shall propose to the Extraordinary General Meeting of Boreo to be held prior to the completion of the merger to amend the articles of association of Boreo in connection with the registration of the implementation of the merger, The articles of association are proposed to be amended with regard to the company’s line of business and the number of members of the board of directors and a new section regarding a redemption obligation of the company’s shares when a shareholder’s holdings exceeds 60 % of the shares or votes and a notification obligation of shareholdings when a shareholder’s holdings exceeds 60 % of the company’s shares or votes. The proposed new articles of association is appended to the merger plan, included as Annex 1 to this stock exchange release.

Illustrative combined financial information

The Future Company’s illustrative combined net sales, adjusted EBITA, adjusted EBITDA and interest-bearing net debt presented below have been formed by aggregating Sievi Capital’s preliminary consolidated financial and Boreo’s financial information information for the financial year ended 31 December 2020 and for the six-months period ended 30 June 2021. The financial information takes into account the effect of certain acquisitions described later as if they had taken place at the beginning of each period. In addition, preliminary calculation takes into account adjustments estimated by management related to significant differences in accounting policies between Sievi Capital and Boreo. The illustrative combined financial information is presented as if the business had been conducted in the Future Company from the beginning of each year in case of revenue, adjusted EBITA and adjusted EBITDA and interest-bearing net debt as if the combination would have taken place on 30 June 2021.

The Future Company intends to continue to operate in accordance with Boreo's current business model as a group, and include to its consolidated financial statements its subsidiaries. Currently, Sievi Capital is an IFRS investment company that has applied an exemption from the consolidation of subsidiaries to its consolidated financial statements. This means a change in Sievi Capital's investment entity operating model and the consolidation of its portfolio companies into the Future Company in financial reporting. Sievi Capital's current basis of preparation of the investment entity's consolidated financial statements and the key differences in the consolidation of subsidiaries in the consolidated financial statements are described in Appendix 2, Sievi Capital's financial information.

In this illustrative combined financial information, Sievi Capital's financial information is presented as if Sievi Capital had consolidated the the subsidiaries line by line in its financial statements. Only Indoor Group of Sievi Capital’s subsidiaries has prepared financial information in accordance with IFRS standards for the periods presented. For Sievi Capital's other subsidiaries, the illustrative financial information is based on the companies' Finnish Accounting Standards (“FAS”) figures for the subgroups, which have been adjusted by management estimates for significant differences in accounting policies. The most significant differences between the accounting policies used by Sievi Capital's subsidiaries and IFRS are expected to arise from the treatment of leasing and rental agreements as assets and liabilities and from the allocation of rental expenses to depreciation and interest expenses. This illustrative combined financial information takes into account as an adjustment to the accounting principles for Sievi Capital’s subsidiaries reporting under FAS the preliminary managements estimates for leasing and rental agreement related adjustment. Sievi Capital's final financial information in accordance with IFRS, including the application of IFRS 16 to the lease portfolio of Sievi Capital's subsidiaries, will only be confirmed in connection with the IFRS transition to be implemented in connection with the Merger. The final IFRS financial information, including the IFRS lease liability, may differ materially from the preliminary illustrative financial information presented here.

Sievi Capital's subsidiaries have significant minority interest, for which the share of Sievi Capital's subsidiaries' profit for the financial year and equity is attributable. An illustrative minority interest has been calculated from the Future Company’s adjusted EBITDA based on minority ownership in Sievi Capital's and Boreo’s subsidiaries in September 2021.

The illustrative combined financial information presented herein is based on a hypothetical situation and should not be viewed as pro forma financial information as any impacts of purchase price allocation, potential accounting policy differences that will occur later in connection with the transition to IFRS, adjustments related to transaction costs, tax impacts and impacts of the potential refinancing have not been taken into account. The illustrative combined financial information does not reflect any cost savings, synergy benefits or future integration costs that are expected to be generated as a result of the merger.

The actual consolidated financial information for the Future Company will be prepared based on the final merger consideration and the fair values of Sievi Capital’s identifiable assets and liabilities at the merger completion date, including the impacts of the potential refinancing. The Future Company’s consolidated financial information that will be published following the completion of the combination could therefore differ significantly from the illustrative combined financial information presented herein. Accordingly, this information is not indicative of what the Future Company’s actual financial position, results of operations or key figures would have been had the combination been completed on the dates indicated.

In the merger prospectus to be published during the last quarter of 2021, Boreo will publish pro forma financial information for the Future Company, which will also include Sievi Capital's consolidated income statement and balance sheet information prepared for that purpose in accordance with IFRS.

1-12/2020

EUR million

Sievi Capital

Boreo

Future Company

Net sales

370

104

474

Adjusted EBITA 1)

23

6

29

Adjusted EBITDA 2)

51

8

59

Illustrative minority share of adjusted EBITDA

21

0

21

1-6/2021

EUR million

Sievi Capital

Boreo

Future Company

Net sales

195

65

260

Adjusted EBITA 1)

9

4

13

Adjusted EBITDA 2)

24

6

30

Illustrative minority share of adjusted EBITDA

10

0

10

30 June 2021

EUR million

Sievi Capital

Boreo

Future Company

Interest-bearing debt

185

40

224

Cash and cash equivalent

-37

-7

-44

Interest-bearing net debt 3)

148

33

181

- of which lease liability

115

5

120

Employees

1341

371

1712

1) Adjusted EBITA = Operating profit + items affecting comparability + amortization and impairment of intangible assets

2) Adjusted EBITDA = Operating profit + items affecting comparability + depreciation, amortization and impairment of tangible and intangible assets

3) Interest-bearing net debt = Financial debt + purchase price liabilities + lease liabilities - cash and cash equivalents

The illustrative combined financial information described above was prepared by combining the financial information of Boreo and Sievi Capital's parent company and subsidiary subgroups for the financial year ended 31 December 2020 and the six-month period ended 30 June 2021 with the following adjustments:

  • Machinery Group’s income statement for January to February 2020 has been added to Boreo’s income statement information for the financial year ended 31 December 2020. The acquisition of the Machinery Group was completed on 2 March 2020.

  • Sievi Capital's financial information has been combined by aggregating the financial information of the parent company Sievi Capital Plc and Sievi Capital's subgroups (Indoor Group Holding Oy, KH-Koneet Group Oy, Logistikas Oy and Nordic Rescue Group Oy) and adjusting them for the estimated effects of leasing liability and leasing costs, excluding Indoor Group Holding -group that reports IFRS figures. The income statement of Nordic Rescue Group Oy for January 2020 (acquired on 6 February 2020) and the income statement of Logistikas Oy for January to November 2020 (acquired on 4 December 2020) have been added to this financial information.

  • The figures for Muottikolmio Oy (acquired on 1 October 2020), Milcon Oy (acquired 1 on June 2021), PM Nordic AB, Sany Nordic AB (acquired on 5 January 2021), Etelä-Suomen Kuriiripalvelu & Teitteam Oy (acquired on 1 April 2021) acquired by Boreo have been combined from the date of their acquisition.

  • The figures for Sala Brand AB (acquired on 18 June 2021) and S-Rental Ab (acquired on 17 June 2020) acquired by Sievi Capital have been combined from the date of their acquisition

  • Sievi Capital’s acquisition of Piccolo Packing Oy and Piccolo Solutions Oy and Boreo’s acquisition of Floby Nya Bilverkstad AB after 30 June 2021 have not been taken into account in this combined preliminary illustrative financial information.

  • The acquisition of Rakennuttajatoimisto HTJ Oy, announced by Sievi Capital Plc on 20 September 2021, has not been included in the above illustrative combined financial information. The transaction is expected to be completed in October 2021.

  • When calculating adjusted EBITA and adjusted EBITDA, Sievi Capital's preliminary combined data have not been adjusted for items affecting comparability; Boreo's figures have been adjusted for the items affecting comparability described more detail in Appendix 2.

The Merger

Statutory Merger

The proposed merger between Sievi Capital and Boreo will be executed through a absorption merger pursuant to the Finnish Limited Liability Companies Act, whereby all of Sievi Capital's assets and liabilities will be transferred to Boreo without liquidation proceedings. As a result of the completion of the merger, Sievi Capital is automatically dissolved.

Board of Directors of Boreo proposes to the Extraordinary General Meeting of Boreo held before the Effective Date that the Extraordinary General Meeting authorises the Board of Directors of Boreo to decide on a share issue without payment in which Boreo's shareholders are issued new shares without payment in proportion to their holdings so that fourteen (14) new Boreo shares are issued for each share. Similarly, new shares will be issued without payment to Boreo on the basis of its treasury shares. Based on the number of shares on the date of this stock exchange release, a total of 36,642,508 new shares would be issued. The total number of shares in Boreo would thus be 39,259,830. The new shares will be issued immediately before the registration of the completion of the merger.

Upon the completion of the merger, Sievi Capital's shareholders will receive as merger consideration 0.4492 new shares of Boreo for each Sievi Capital share held on the record date. The total number of new shares in Boreo to be issued to the shareholders of Sievi Capital as merger consideration is expected to be 26,089,039 shares, assuming that no shareholder of Sievi Capital demands redemption of his/her/its shares in Sievi Capital at the Extraordinary General Meeting of Shareholders resolving on the merger.

As part of the proposed combination, the Boards of Directors of Sievi Capital and Boreo have agreed not to propose to respective Annual General Meetings to be held in 2022 the distribution of the companies' assets prior to the completion of the merger. Boreo has the right to distribute to its shareholders the second instalment of the dividend decided by its Annual General Meeting on 15 April 2021, EUR 0.20 per share.

Sievi Capital and Boreo will convene Extraordinary General Meetings to decide on the proposed merger. The Extraordinary General Meetings are expected to be held in December 2021. The companies will publish the invitations to the Extraordinary General Meetings in separate stock exchange releases.

The merger plan which is included in Annex 1 to this stock exchange release contains information on certain conditions of the proposed merger, such as the merger consideration to be paid to Sievi Capital's shareholders. Further information on the proposed combination, merger and Future Company can also be found in the merger and listing prospectus, which Boreo is expected to publish in November 2021 before the Extraordinary General Meetings of Sievi Capital and Boreo.

Approvals and the schedule

The completion of the contemplated merger is subject, among other things, approval by a majority of of the votes cast and shares represented at the Extraordinary General Meetings of Sievi Capital and Boreo, obtaining of necessary merger control approvals, the availability of the financing for the purpose of the merger and that no materially adverse effects have taken place before the completion of the merger. As the transaction is proposed to be implemented by way of a statutory merger of Sievi Capital into Boreo, it is also subject to a statutory creditor hearing process of Sievi Capital’s creditors. All conditions for the completion of the merger are set out in the merger plan, which is included as Annex 1 to this stock exchange release.

Subject to all conditions for completion being fulfilled, the completion of the merger is expected to occur in the first half of 2022. Trading in the new shares of Boreo to be issued to Sievi Capital's shareholders is expected to begin on or about first trading day following the completion of the merger.

Combination Agreement

Sievi Capital and Boreo have entered into a Combination Agreement on 29 September 2021, pursuant to which Sievi Capital and Boreo have agreed to combine their business operations through a statutory absorption merger pursuant to the Finnish Limited Liability Companies Act. As a result of the combination, Sievi Capital's target companies will become part of the operations of the Future Company. The Future Company will develop its businesses in the long term and without an intention of divesting them.

The Combination Agreement contains customary representations and warranties as well as undertakings, such as, inter alia, each party conducting its business in the ordinary course of business before the completion of the merger, keeping the other party informed of any and all matters that may be of material relevance for the purposes of effecting the completion of the merger, preparing the necessary regulatory filings and notifications in cooperation with the other party, and cooperating with the other party in relation to the financing of the Future Company.

In addition, Sievi Capital and Sievi Capital each undertake not to solicit proposals competing with the transaction agreed in the Combination Agreement.

Moreover, Sievi Capital and Boreo have given each other certain customary representations and warranties related to, inter alia, authority to enter into the Combination Agreement, due incorporation, status of the shares in the respective company, preparation of financial statements and interim reports, the compliance with applicable licences, laws and agreements, legal proceedings, ownership of intellectual property, taxes, employees and the due diligence material provided to the other party.

With the exception of certain jointly incurred costs, Sievi Capital and Boreo shall bear their own fees, costs and expenses incurred in connection with the merger.

The Combination Agreement may be terminated by mutual written consent duly authorised by the Boards of Directors of Sievi Capital and Boreo. Each of Sievi Capital and Boreo may terminate the Combination Agreement inter alia if, (i) the merger has not been completed by 31 December 2022 (or it becomes evident that completion cannot take place by that time); (ii) in case of a material adverse effect after the signing date that is incapable of being cured, all as defined, and following the consultation and other procedures described, in the Combination Agreement; (iii) the Extraordinary General Meetings of Sievi Capital and Boreo have not considered the merger in accordance with the Combination Agreement, or upon consideration by the relevant Extraordinary General Meeting, they shall have failed to duly approve the merger; (iv) if any governmental entity (including any competition authority) gives an order or takes any regulatory action that is non-appealable and conclusively prohibits the completion of the merger; or (v) in case of a material breach by the other party of any of the representations, warranties, covenants or undertakings under the Combination Agreement if such breach has resulted, or could reasonably be expected to result, in a materially adverse effect as described in the Combination Agreement. In the event of the Combination Agreement is terminated due to certain reasons specified in the Combination Agreement, the parties have agreed to cover certain costs associated with the preparation of the merger.

Fairness opinions

The Board of Directors of Sievi Capital considers that the consideration paid in connection with the arrangement is reasonable from the financial point of view of Sievi Capital's shareholders. The Board of Directors of Sievi Capital made its assessment after taking into account a number of factors, including the fairness opinion of Handelsbanken Capital Markets, which was submitted to Sievi Capital’s Board of Directors on 29 September 2021. The fairness opinion of Handelsbanken is included as an appendix to this stock exchange release.

The Board of Directors of Boreo considers that the consideration paid in the in connection with the arrangement is reasonable from the financial point of view of Boreo’s shareholders. The Board of Directors of Boreo made its assessment after taking into account various factors, such as OP Corporate Bank plc's fairness opinion, which was submitted to the Board of Directors of Boreo on 29 September 2021. The fairness opinion of OP is included as an appendix to this stock exchange release.

Financing

With regard to its existing loan facilities, Boreo has obtained consents under which the combination has been approved by its main financier OP Corporate Bank Plc. Sievi Capital has also obtained consent for the existing loan facilities of the group by its main financiers Nordea Bank Plc and OP Corporate Bank Plc. In addition, Boreo has entered into loan and guarantee arrangements with OP Corporate Bank Plc and Preato Capital AB to finance possible cash redemptions of Sievi Capital shares.

Shareholder support

Preato Capital AB, the majority shareholder of Sievi Capital and Boreo, representing approximately 23.23 per cent of Sievi Capital's shares and approximately 72.91 per cent of Boreo's shares, has undertaken, subject to certain customary terms and conditions, to vote irrevocably in favour of the combination.

Preliminary timeline

Sievi Capital and Boreo will convene Extraordinary General Meetings to decide on the proposed combination. The Extraordinary General Meetings are expected to be held in November or December 2021. The companies will publish invitations to the Extraordinary General Meetings with separate stock exchange releases. The other key dates related to the combination are as follows:

  • September 2021 - Submission of the merger plan for the registration

  • November 2021 - Merger prospectus will be published

  • December 2021 - Extraordinary General Meetings of Sievi Capital and Boreo

  • First half of 2022 - Completion of the merger, provided that all regulatory authorisations have been obtained and all other conditions for completion have been fulfilled or waived

All times are preliminary and subject to change. The proposed merger is subject to the authorisation of the competition authorities in Finland, Sweden, Russia and Baltics, and, therefore, the preliminary timeline will depend on these processes.

Advisors

Sievi Capital's financial advisor is Handelsbanken Capital Markets and its legal advisor is Hannes Snellman Attorneys Ltd.
Boreo's financial advisor is MCF Corporate Finance Oy and its legal advisor is Castrén & Snellman Attorneys Ltd.

SIEVI CAPITAL PLC
Board of Directors

BOREO PLC
Board of Directors

Analyst and Investor Webcast and Media Conference

A joint presentation of the merger between Sievi Capital and Boreo will take place today, 29 September 2021, starting at 10:00 a.m. The event will be hosted by Lennart Simonsen (Chairman of the Board of Directors of Sievi Capital), Jouni Grönroos (Board Member of Boreo and Chairman of the Independent Committee), Jussi Majamaa (CEO of Sievi Capital) and Kari Nerg (CEO of Boreo).

The event will be held in Finnish and can be followed live by webcasting from the following link:

https://boreo.videosync.fi/boreon-ja-sievi-capitalin-yhdistyminen

Questions can be asked via the chat function and by phone.

Media representatives, analysts and investors are welcome to follow the presentation in person at Kämp hotel’s Symposion hall at Kluuvikatu 2, 00100 Helsinki. The number of participants in the event is limited to 30 people in accordance with applicable Covid-19 restrictions. Participants are requested to register in advance by email: aku.rumpunen@boreo.com.

The presentation material will be published on the merger website at www.platformforgrowth.fi and on the companies' websites www.sievicapital.com and www.boreo.com.

The event can also be attended by phone. Please call five to ten minutes before the start of the event. Phone numbers:

Finland Toll: +358 981710310
Sweden Toll: +46 856642651
United Kingdom Toll: +44 3333000804
United States Toll: +1 6319131422

Call code:
PIN: 48564357#

DISTRIBUTION:
Nasdaq Helsinki, Finland
Major media
www.sievicapital.fi

Sievi Capital and Boreo in brief

Sievi Capital is a partner for Finnish entrepreneurs. We support the growth, performance and value creation of small and medium-sized companies and concurrently build national competitiveness. We believe that we succeed together as co-entrepreneurs. Sievi Capital’s share is listed on Nasdaq Helsinki.

In 2020, Sievi Capital group’s illustrative net sales pursuant to IFRS was EUR 370 million and it employed approximately 1340 people. The company’s domicile is in Sievi and its head office is located in Helsinki.

Boreo, a company listed on the Helsinki Stock Exchange, creates value by owning, acquiring and developing B2B businesses in Northern Europe. Boreo's operations are organised into three Business Areas: Electronics, Technical Trade and Heavy Machines. Boreo’s main objective is to create shareholder value in the long-term by growing via acquisitions, creating optimal conditions for its businesses to grow sales and earnings and by being a best-in-class home for its companies and people.

In 2020, the group's pro forma net sales amounted to EUR 103.6 million, and it employed approximately 350 people in Finland, Sweden, Russia and the Baltics. The company's head office is located in Vantaa, Finland.

Important notice

This release is not an offer of merger consideration shares in the United States, and it is not intended for distribution in or into the United States or in any other jurisdiction in which such distribution of this release would be prohibited by applicable law. The merger consideration shares have not been registered and will not be registered under the U.S. Securities Act of 1933 (the Securities Act”), and may not be offered, sold or delivered within or into the United States, except pursuant to an applicable exemption of, or in a transaction not subject to, the Securities Act.

This release does not constitute an offer of or an invitation by or on behalf of, Sievi Capital or Boreo, or any other person, to purchase any securities.

This release does not constitute a notice to an Extraordinary General Meeting or a merger and listing prospectus. Any decision with respect the proposed statutory absorption merger of Sievi Capital into Boreo should be made solely on the basis of information contained to be contained in the actual notices to the Extraordinary General Meetings of Sievi Capital and Boreo, as applicable, and the merger and listing prospectus related to the merger as well as on the independent analysis of the information contained therein. Investors are encouraged to familiarise themselves with the merger and listing prospectus for more complete information about Sievi Capital, Boreo, their subsidiaries, as well as on Sievi Capital's and Boreo’s securities and the merger.

This release includes “forward-looking statements” that are based on present plans, estimates, projections and expectations and are not guarantees of future performance. They are based on certain expectations and assumptions, which, even though they seem to be reasonable at present, may turn out to be incorrect. Shareholders should not rely on these forward-looking statements. Numerous factors may cause the actual results of operations or financial condition of the combined entity to differ materially from those expressed or implied in the forward-looking statements. Neither Sievi Capital nor Boreo, nor any of their respective affiliates, advisors or representatives, or any other person undertake any obligation to review or confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of this release.

This release includes estimates relating to the benefits expected to arise from the potential combination of the business operations of Sievi Capital and Boreo as well as the related integration costs, which have been prepared by Sievi Capital and Boreo and are based on a number of assumptions and judgments. Such estimates present the expected future impact of the potential combination of the business operations of Sievi Capital and Boreo on the combined company’s business, financial condition and results of operations. The assumptions relating to the estimated benefits and related integration costs are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause the actual benefits from the potential combination of the business operations of Sievi Capital and Boreo, if any, and related integration costs to differ materially from the estimates in this release. Further, there can be no certainty that the merger will be completed in the manner and timeframe described in this release, or at all.

ANNEX 1 MERGER PLAN

MERGER PLAN

1 PARTIES

1.1 Merging Company

Corporate name:

Sievi Capital Oyj (”Sievi” or “Merging Company”)

Business ID:

0190457-0

Address:

Pohjoisesplanadi 33, 00100 Helsinki

Domicile:

Helsinki, Finland

The Merging Company is a public limited liability company, the shares of which are publicly traded on stock exchange list of Nasdaq Helsinki Oy (“Nasdaq Helsinki”).

1.2 Receiving Company

Corporate name:

Boreo Oyj (”Boreo” or ”Receiving Company”)

Business ID:

0116173-8

Address:

Ansatie 5, 01740 Vantaa

Domicile:

Vantaa, Finland

The Receiving Company is a public limited liability company, the shares of which are publicly traded on Nasdaq Helsinki.

The Merging Company and the Receiving Company are hereinafter jointly referred to as the “Parties” or the “Companies Participating in the Merger” and, each individually, a “Party” or a “Company Participating in the Merger”.

2 MERGER

The board of directors of Sievi Capital Plc and the board of directors of Boreo Plc propose to the extraordinary general meetings of the respective companies that the general meetings would resolve upon the merger of Sievi into Boreo through a statutory absorption merger, whereby all assets and liabilities of Sievi shall be transferred without a liquidation procedure to Boreo, as set forth in this merger plan (including its appendices, the “Merger Plan”) (the “Merger”).

Immediately prior to the registration of the implementation of the Merger, Boreo will effect a 1 for 14 share split. The share split has been described in more detail in Section 6 of the Merger Plan.

The shareholders of Sievi shall, after the share split, receive as merger consideration [0.4492] new shares in Boreo for each share they hold in Sievi. In case the number of shares in Boreo received by a shareholder of Sievi as merger consideration is a fractional number, the fractions shall be rounded down to the nearest whole number, and fractional entitlements shall be aggregated and sold in public trading on the official list of Nasdaq Helsinki for the benefit of the shareholders of Sievi entitled to such fractions. The merger consideration has been described in more detail in Section 7 of the Merger Plan.

Sievi shall automatically dissolve as a result of the Merger.

The Merger shall be carried out in accordance with the provisions of Chapter 16 of the Finnish Limited Liability Companies Act (624/2006, as amended) (the “Finnish Companies Act”) and Section 52 a of the Finnish Business Income Tax Act (360/1968, as amended).

3 REASONS FOR THE MERGER

The Companies Participating in the Merger have on 18 August 2021 entered into a letter of intent concerning the assessment of the combination of the business operations of the Companies Participating in the Merger (“Letter of Intent”). In the combination agreement which has been signed simultaneously with the Merger Plan on 29.9.2021 it has been agreed on the combination of the business operations of the Companies Participating in the Merger (the “Combination Agreement”).

The Merger is expected to create one of the leading growth platforms on the Nasdaq Helsinki stock exchange for small and medium-sized companies. The business operations of the Companies Participating in the Merger are decentralized to several different industries and there is small reliance on individual client and customer relationships. Geographically, after the Merger, the Receiving Company would have become even more decentralized in Northern Europe. The merger of Boreo and Sievi is expected to significantly increase the size of the companies and enable even better conditions to increase operative efficiency.

The Merger is also expected to create better and stronger conditions for the growth and development of independent businesses, as well as for the utilization of best practices, synergies between the businesses and a stronger offering to customers, clients and other stakeholders.

4 AMENTDMENTS TO THE RECEIVING COMPANY’S ARTICLES OF ASSOCIATION

articles of association of the Receiving Company are proposed to be amended in connection with the registration of, and subject to, the implementation of the Merger.

The most significant amendments to the articles of association of the Receiving Company are:

1) the company’s line of business shall be specified;

2) the maximum number of members of the board of directors shall be amended to a maximum of nine (9) members;

3) a new Section 11 on the shareholder's redemption obligation, which applies in case of the shareholder's holding exceeds 60 %, shall be added;

4) a new Section 12 on the shareholders notice obligation, which applies in case of the shareholder’s holdings exceeds of 60 %, shall be added.

The articles of association of the Receiving Company, including the above amendments, as well as other technical amendments, are attached in their entirety to this Merger Plan as Appendix 1.

5 ADMINISTRATIVE BODIES OF THE RECEIVING COMPANY

5.1 Board of directors and Auditor of the Receiving Company and Their Remuneration

According to the articles of association of the Receiving Company, the Receiving Company shall have a board of directors consisting of a minimum of three (3) and a maximum of seven (7) members. In accordance with Section 4, the maximum number of members of the board is proposed to be amended to nine (9) members. The number of the members of the board of directors of the Receiving Company shall be conditionally confirmed and the members of the board of directors shall be conditionally elected by a general meeting of the Receiving Company to be held prior to the implementation date. Both decisions shall be conditional upon the implementation of the Merger. The decisions shall be subject to the implementation of the Merger. The term of such members of the board of directors shall commence on the implementation date and shall expire at the end of the first general meeting of the Receiving Company following the implementation date.

The board of directors of the Receiving Company shall propose to a general meeting of the Receiving Company to be held prior to the implementation date that the number of the members of the board of directors of the Receiving Company shall be nine (9) and that Camilla Grönholm, Jouni Grönroos, Simon Hallqvist, Ralf Holmlund, Juha Karttunen, Kati Kivimäki, Taru Narvanmaa, Lennart Simonsen and Michaela von Wendt be conditionally elected to the board of directors of the Receiving Company for the term commencing on the implementation date and expiring at the end of the first annual general meeting of the Receiving Company following the implementation date.

The board of directors of the Receiving Company, shall also propose to an extraordinary general meeting of the Receiving Company the remuneration of the members of the board of directors of the Receiving Company, including the remuneration of the members of relevant Board committees to be established, for the term commencing on the implementation date. The annual remuneration of the members to be elected shall be paid in proportion to the length of their term of office.

The term of the members of the board of directors of the Merging Company shall end on the implementation date. The members of the board of directors of the Merging Company shall be paid a reasonable remuneration for the preparation of the final accounts of the Merging Company.

The board of directors of the Receiving Company may, after consultation with the board of directors of the Merging Company, amend the above-mentioned proposal concerning the election of members of the board of directors of the Receiving Company, if one or more of the persons proposed would not be available for election at the relevant general meeting of the Receiving Company to be held prior to the implementation date due to his or her resignation or otherwise.

The auditor of the Receiving Company will continue in its position and the Merger will not impact the resolution previously adopted in respect of the auditor’s remuneration.

5.2 ShareholdersNomination Board

The board of directors of the Receiving Company shall propose to a general meeting of the Receiving Company to be held prior to the implementation date the establishment of a shareholders’ nomination board and the adoption of the charter of the shareholders’ nomination board as set out in Appendix 2, subject to the implementation of the Merger.

In the event that the Merger is implemented before the 2022 annual general meeting of the Receiving Company, it is proposed that the shareholders’ nomination board be elected by in deviation from the charter so that three largest shareholders are determined on the basis of the Receiving Company’s shareholder register as of the implementation date of the merger, the members of the nomination board will be elected as soon as possible after the implementation date and the nomination board shall submit its proposals to the annual general meeting in time for the proposal to be submitted in sufficient time to the 2022 annual general meeting.

5.3 CEO of the Receiving Company

The boards of directors of the Receiving Company and the board of directors of the Merging Company has agreed that Kari Nerg shall continue to serve as the CEO of the Receiving Company.

If the person appointed resigns or otherwise must be replaced by another person prior to the implementation date, the boards of directors of the Receiving Company and the Merging Company shall mutually agree on the appointment of a new CEO.

6 RECEIVING COMPANY’S SHARE SPLIT

The board of directors of the Receiving Company shall propose to the General Meeting of the Receiving Company to be held prior to the implementation date that the general meeting would authorize the board of directors of the Receiving Company to issue new shares without payment to the shareholders of the Receiving Company in proportion to their existing shareholding by issuing fourteen (14) new shares for each share held. New shares will be similarly issued without payment to the Receiving Company for its treasury shares. Based on the number of shares on the date of this Merger Plan (2,617,322), a total of 36,642,508 new shares would be issued. The total number of shares in the Receiving Company would thus be 39,259,830 shares. The new shares will be issued immediately prior to the registration of the implementation of the Merger.

The board of directors of the Receiving Company may propose to a General Meeting to be convened prior to the implementation date that the general meeting replaces the share issue authorisation decided by the annual general meeting on 15 April 2021 with a new authorisation where the maximum amount of shares that may be issued by virtue of such authorisation will be increased in proportion to the share split. The authorisation is proposed to enter into force on the implementation date and remain in force until the expiry of the first annual general meeting following the implementation date.

7 MERGER CONSIDERATION AND GROUNDS FOR ITS DETERMINATION

7.1 Merger Consideration

The shareholders of the Merging Company shall, after the share split referred to in Section 6, receive as merger consideration 0.4492 new shares in the Receiving Company for each share they hold in the Merging Company (the “Merger Consideration”). In accordance with Chapter 16, Section 16, Subsection 3 of the Finnish Companies Act, shares in the Merging Company held by the Merging Company or the Receiving Company do not carry a right to the Merger Consideration.

In case the number of shares received by a shareholder of the Merging Company as Merger Consideration is a fractional number, the fractions shall be rounded down to the nearest whole number. Fractional entitlements to new shares of the Receiving Company shall be aggregated and sold in public trading on Nasdaq Helsinki and the proceeds shall be distributed to shareholders of the Merging Company entitled to receive such fractional entitlements in proportion to holding of such fractional entitlements. Any costs related to the sale and distribution of fractional entitlements shall be borne by the Receiving Company.

There is one (1) share class in the Receiving Company. The shares of the Receiving Company do not have a nominal value. The total number of shares in the Receiving Company is at the date of Merger Plan 2,617,322 shares.

The allocation of the Merger Consideration is based on the shareholding in the Merging Company at the end of the last trading day preceding the implementation date. The final total number of shares in the Receiving Company issued as Merger Consideration shall be determined based on the number of shares in the Merging Company held by shareholders (other than the Merging Company itself) at the end of the day preceding the implementation date. Such total number of shares issued shall be rounded down to the nearest full share. The total number of shares in the Merging Company is at the date of the Merger Plan 58,078,895 shares. The Merging Company holds no treasury shares, and the Receiving Company holds no shares in the Merging Company. On the date of this Merger Plan, the total number of shares in the Receiving Company to be issued as Merger Consideration would therefore be a maximum of 26,089,040 shares.

Apart from the Merger Consideration to be issued in the form of new shares of the Receiving Company and proceeds from the sale of fractional entitlements, no other consideration shall be distributed to the shareholders of the Merging Company.

7.2 Grounds for Determination of Merger Consideration

The Merger Consideration has been determined based on the relation of valuations of the Merging Company and the Receiving Company. The value determination has been made by applying generally used valuation methods. The value determination has been based on the stand-alone valuations of the Companies Participating in the Merger including market-based valuation adjusted for company specific factors.

Based on their respective relative value determination, which is supported by a fairness opinion received by the Merging Company and the Receiving Company, the board of directors of the Merging Company and the board of directors of the Receiving Company have concluded that the consideration to be paid in connection with the Merger is fair from a financial point of view to the shareholders of the Merging Company and the shareholders of the Receiving Company, respectively.

8 DISTRIBUTION OF THE MERGER CONSIDERATION

The Merger Consideration shall be distributed to the shareholders of the Merging Company on the implementation date or as soon as reasonably possible thereafter.

The Merger Consideration shall be distributed in the book-entry system maintained by Euroclear Finland Oy. The Merger Consideration payable to each shareholder of the Merging Company shall be calculated, using the exchange ratio set forth in Section 7.1 above, based on the number of shares in the Merging Company registered in each separate book-entry account of each such shareholder at the end of the last trading day preceding the implementation date.

The Merger Consideration shall be distributed automatically, and no actions are required from the shareholders of the Merging Company in order to receive it. The new shares of the Receiving Company distributed as Merger Consideration shall carry full shareholder rights as from the date of their registration.

9 OPTION RIGHTS AND OTHER SPECIAL RIGHTS ENTITLING TO SHARES

Neither the Merging Company nor the Receiving Company have issued any option rights or other special rights entitling to shares referred to in Chapter 10, Section 1 of the Finnish Companies Act.

10 SHARE-BASED INCENTIVE PLANS

10.1 Incentive Plans of the Receiving Company

The Receiving Company has no share-based incentive plans.

10.2 Incentive Plans of the Merging Company

The Merging Company has share-based incentive plans under which share rewards have not been paid in their entirety by the date of this Merger Plan as follows: (i) Performance-based share plan LTI 2020-2022, and (ii) Performance-based share plan LTI 2021-2023.

The board of directors of the Merging Company shall, subject to the Combination Agreement and the Merger Plan, resolve on the impact of the Merger on such incentive plans in accordance with their terms and conditions prior to the implementation date.

11 SHARE CAPITAL AND OTHER EQUITY OF THE RECEIVING COMPANY

The share capital of the Receiving Company is EUR 2,483,836.05.

The share capital of the Receiving Company shall be increased, as specified in Section 12 below, by EUR 3,016,163.95 in connection with the registration of the implementation of the Merger, after which the share capital of the Receiving Company shall be EUR 5,500,000. The equity increase of Receiving Company shall, to the extent it exceeds the amount to be recorded into the share capital, be recorded as an increase of the reserve for invested non-restricted equity in accordance with Section 12 below.

12 DESCRIPTION OF THE ASSETS, LIABILITIES AND EQUITY OF THE MERGING COMPANY AND THE CIRCUMSTANCES RELEVANT TO THEIR VALUATION, OF THE EFFECT OF THE MERGER ON THE BALBANCE SHEET OF THE RECEIVING COMPANY AND OF THE ACCOUNTING TREATMENT TO BE APPLIED IN THE MERGER

In the Merger, all (including known, unknown and conditional) assets, liabilities and responsibilities as well as agreements and commitments and the rights and obligations relating thereto of the Merging Company, and any items that replace or substitute any such item, shall be transferred to the Receiving Company.

The Merger is to be carried out by applying the acquisition method using book values. The assets and the liabilities on the balance sheet of the Merging Company are recognised at book value in appropriate asset and liability line items on the balance sheet of the Receiving Company in accordance with the Finnish Accounting Act (1336/1997, as amended) and the Finnish Accounting Decree (1339/1997, as amended), except for the possible items relating to receivables and liabilities between the Receiving Company and the Merging Company; these receivables and liabilities will be set-off in the Merger.

The equity in the Receiving Company shall be formed in the Merger by applying the acquisition method so that the amount corresponding the book value of the net assets of the Merging Company shall be recorded into reserve for invested non-restricted equity of the Receiving Company with the exception of the increase in share capital as described in Section 11.

A description of the assets, liabilities and equity of the Merging Company and an illustration of the post-Merger balance sheet of the Receiving Company is attached to the Merger Plan as Appendix 3.

The final effects of the Merger on the Receiving Company’s balance sheet will be determined according to the circumstances and the laws and regulations governing the preparation of the financial statements in Finland at the implementation date of the Merger

13 MATTERS OUTSIDE ORDINARY COURSE OF BUSINESS

As of the date of this Merger Plan, each of the Parties shall continue to conduct their operations in the ordinary course of business and in a manner consistent with past practice of the relevant Party, unless the Parties specifically agree otherwise.

Except as set forth in this Merger Plan or the Combination Agreement or as otherwise specifically agreed by the Parties, the Merging Company and the Receiving Company shall during the Merger process not resolve on any matters (regardless of whether such matters are ordinary or extraordinary) which would affect the shareholders’ equity or number of outstanding shares in the relevant company, including but not limited to corporate acquisitions and divestments, share issues, issue of special rights entitling to shares, acquisition or disposal of treasury shares, dividend distributions, changes in share capital, or any comparable actions, or take or commit to take any such actions.

The Receiving Company has the right to distribute to its shareholders the second instalment of the dividend, EUR 0.20 per share, decided by its general meeting on 15 April 2021.

For the sake of clarity, the Receiving Company may, subject to a prior written consent by the Merging Company, amend its articles of Association in other respects as set out in Section 4 above.

14 CAPITAL LOANS

Neither the Merging Company nor the Receiving Company has issued any capital loans, as defined in Chapter 12, Section 1 of the Finnish Companies Act.

15 SHAREHOLDINGS BETWEEN THE MERGING COMPANY AND THE RECEIVING COMPANY

On the date of this Merger Plan, the Merging Company or its subsidiaries do not hold, and the Merging Company agrees not to acquire and shall cause its subsidiaries not to acquire any shares in the Receiving Company or its parent company and the Receiving Company does not hold and agrees not to acquire any shares in the Merging Company, unless the Parties specifically agree otherwise in writing.

On the date of the Merger Plan, the Merging Company holds no treasury shares.

16 BUSINESS MORTGAGES

On the date of this Merger Plan, the business mortgages as defined in the Finnish Act on Business Mortgages (634/1984, as amended), listed in Appendix 4, pertain to the assets of the Merging Company.

On the date of this Merger Plan, the business mortgages as defined in the Finnish Act on Business Mortgages (634/1984, as amended), listed in Appendix 4, pertain to the assets of the Receiving Company.

17 SPECIAL BENEFITS OR RIGHTS IN CONNECTION WITH THE MERGER

No special benefits or rights, each within the meaning of the Finnish Companies Act, shall be granted in connection with the Merger to any members of the board of directors, the CEOs or the auditors of either the Merging Company or the Receiving Company, or to the auditors issuing statements on this Merger Plan.

The remuneration of the auditors issuing their statement on the Merger Plan is proposed to be paid in accordance with an invoice approved by the Receiving Company in the case of the auditor of the Receiving Company and by the Merging Company in the case of the auditor of the Merging Company. The Merging Company’s auditor shall issue a statement referred to in Chapter 16, Section 4, Subsection 1 of the Finnish Companies Act to the Merging Company and the Receiving Company’s auditor will issue the said statement to the Receiving Company.

18 PLANNED REGISTRATION OF THE IMPLEMENTATION OF THE MERGER

The planned implementation date, meaning the planned date of registration of the implementation of the Merger, is 1 April 2022 (effective registration time approximately at [00:01]) subject to the fulfilment of the preconditions in accordance with the Finnish Companies Act and the conditions for implementing the Merger set forth below in Section 21.

The implementation date may change if, among other things, the implementation of measures described in Merger Plan takes a shorter or longer time than currently estimated, or if circumstances related to the Merger otherwise necessitate a change in the time schedule or if the boards of directors of the Companies Participating in the Merger jointly resolve to file the Merger to be registered prior to, or after, the planned registration date.

19 LISTING OF THE NEW SHARES IN THE RECEIVING COMPANY AND DELISTING OF THE SHARES IN THE MERGING COMPANY

The Receiving Company shall apply for the listing of the new shares to be issued by the Receiving Company as Merger Consideration to public trading on Nasdaq Helsinki. For the purposes of the Merger and the listing of the new shares to be issued by the Receiving Company as Merger Consideration, a merger prospectus will be published by the Receiving Company before the extraordinary general meetings of the Receiving Company and the Merging Company, respectively, resolving on the Merger. The trading of the new shares shall begin on the implementation date or as soon as reasonably possible thereafter.

The trading of the shares of the Merging Company on Nasdaq Helsinki is expected to end at the end of the last trading day preceding the implementation date and the shares in the Merging Company are expected to be de-listed as of the implementation date, at the latest.

20 LANGUAGE VERSIONS

This Merger Plan (including its appendices) has been prepared and executed in Finnish and translated into English. Should any discrepancies exist between the Finnish version and the unofficial English translation, the Finnish version shall prevail.

21 CONDITIONS FOR IMPLEMENTATING THE MERGER

The implementation of the Merger is conditional upon the satisfaction or, to the extent permitted by applicable law, waiver of each of the conditions set forth below:

(i) the Merger having been duly approved by the extraordinary general meeting of the Merging Company;

(ii) shareholders of the Merging Company representing no more than ten (10 per cent) of all shares and votes in the Merging Company having demanded the redemption of their shares in the Merging Company pursuant to Chapter 16, Section 13 of the Finnish Companies Act, unless otherwise provided in the Combination Agreement;

(iii) the general meeting of the Receiving Company having approved the authorisation concerning the split of shares in accordance with Section [6] and the split being pending for registration, at the latest, on the implementation date, or the split having been registered with the Trade Register;

(iv) the Merger, the articles of association of the Receiving Company as set forth in section 4 above and the adoption of the charter of the shareholders’ nomination board, as set forth in Sections 5.2 above, as well as the issuance of new shares of the Receiving Company as merger consideration to the shareholders of the Merging Company, having been duly approved by a general meeting of the Receiving Company;

(v) the competition approvals, as defined in the Combination Agreement, having been obtained and being valid in accordance with the Combination Agreement, and, in the event the competition approvals are subject to any such commitments, undertakings or remedies, which a Party or the Parties are obliged to execute prior to the completion, all such commitments, undertakings or remedies being duly executed and effected;

(vi) the regulatory approvals and consents, as defined in the Combination Agreement, having been obtained in accordance with the Combination Agreement;

(vii) the Receiving Company having obtained from Nasdaq Helsinki written confirmations that the listing of the Merger Consideration on the official list of said stock exchange will take place as at or promptly after the implementation date;

(viii) The financing of the parties shall be valid as agreed in the Combination Agreement;

(ix) no event, circumstance or change having occurred on or after the date of the Combination Agreement that would have a material adverse effect, as defined in the Combination Agreement, provided that in the event of a material adverse effect regarding the Receiving Company, this condition precedent shall not have been satisfied for the Merging Company, and in the event of a material adverse effect regarding the Merging Company, this condition precedent shall not have been satisfied for the Receiving Company;

(x) there being no material breach of the representations given by each of the Parties in the Combination Agreement, the direct consequence of which is, in the opinion of the board of directors of the non-breaching Party acting in good faith and after consultation with board of directors of the other Party and reputable financial and legal advisers, a material adverse effect, as defined in the Combination Agreement, provided that in the event of a material breach of a representation made by the Receiving Company, this condition precedent shall not have been satisfied for the Merging Company, and in the event of a material breach of a representation made by the Merging Company, this condition precedent shall not have been satisfied for the Receiving Company. For the purposes of this sub-Section (x), the determination as to whether there has been any breach of any of the representations given by each of the Parties, as the case may be, shall be made without regard to any references to material adverse effect, as defined in the Combination Agreement, and, for the purposes of this sub-Section (x), each such representation by a Party, as the case may be, shall be read as if such reference to material adverse effect were deleted from the relevant representation; and

(xi) the Combination Agreement remaining in force and not having been terminated in accordance with its provisions.

22 AUXILIARY TRADE NAMES

In connection with the implementation of the Merger, the auxiliary trade names set forth in Appendix 5 are registered for the Receiving Company as auxiliary trade names.

23 TRANSFER OF EMPLOYEES

All the employees of the Merging Company shall be transferred to the Receiving Company in connection with the implementation of the Merger by operation of law as so-called old employees.

24 DISPUTE RESOLUTION

Any controversy arising out of or relating to Merger Plan shall be settled by arbitration in accordance with the Arbitration Rules of the Finland Chamber of Commerce. The number of arbitrators shall be three (3). Boreo shall appoint one (1) arbitrator and Sievi shall appoint one (1) arbitrator. In the event of a failure by any Party to appoint such party-appointed arbitrator, the Arbitration Institute of the Finland Chamber of Commerce will make the appointment upon the request of the other Party. The third arbitrator, who will act as chairman of the arbitral tribunal, will be appointed by the Arbitration Institute of the Finland Chamber of Commerce unless the two party-appointed arbitrators reach an agreement on the arbitrator to be appointed as chairman within fourteen (14) days of the appointment of the latter party-appointed arbitrator. The seat of arbitration shall be Helsinki, Finland. The language of the arbitration shall be English, but evidence may be submitted in Finnish and in English.

The Parties agree that the arbitral tribunal may, at the request of either Party, decide by an interim arbitral award a separate issue in dispute if the rendering of an award on other matters in dispute is dependent on the rendering of such an interim arbitral award.

25 OTHER ISSUES

The boards of directors of the Companies Participating in the Merger are jointly authorised to decide on technical amendments to this Merger Plan or its appendices as may be required by authorities or otherwise considered appropriate by the boards of directors.

______________________________

[signature pages follow]

This Merger Plan has been prepared in two (2) identical counterparts, one (1) for the Merging Company and one (1) for the Receiving Company.

In Helsinki, 29 September 2021

BOREO OYJ



______________________



_______________________

Name: Jouni Grönroos
Title: Board member

Name: Kari Nerg
Title: CEO









SIEVI CAPITAL OYJ



______________________



_______________________

Name: Lennart Simonsen
Title: Chair of the Board

Name: Jussi Majamaa
Title: CEO

Appendices to Merger Plan

Appendix 1

Amended Articles of Association of the Receiving Company

Appendix 2

Charter of Shareholders’ Nomination Board

Appendix 3

Description of assets, liabilities and shareholders’ equity and valuation of the Merging Company and the preliminary presentation of the balance sheet of the Receiving Company

Appendix 4

Business Mortgages

Appendix 5

Auxiliary trade names

APPENDIX 1

Amended Articles of Association of the Receiving Company

ARTICLES OF ASSOCIATION

1. Company name and domicile

The company’s trade name is Boreo Oyj. The Company’s parallel trade name in English is Boreo Plc and in Swedish Boreo Abp.

The company’s domicile is Vantaa, Finland.

2. Line of Business

The company’s line of business is supervision and management of operations, arrangement of financing and strategic planning, and planning and implementing financially functional new investments of its subsidiaries and other operating units. The company may trade in products of the electronics industry and the company may buy, sell, hold and manage shares in companies involved in industrial business as well as buy, sell, hold and manage real estate and securities.

3. Board of Directors

The board of directors, which is composed of a minimum of three (3) and a maximum of nine (9) members, shall see to the administration of the company and the appropriate organisation of its operations. The board of directors elects a chair from among its members.

The term of the members of the board of directors ends at the closing of the next annual general meeting following the election.

4. Managing Director

The company’s managing director is elected by the board of directors.

5. Representation of the Company

The company is represented by the chair of the board and by the managing director, each alone, and by two (2) members of the board jointly.

The right to represent the company and granting the power of procuration is decided by the board of directors.

6. Auditor

The company has one (1) auditor, who shall be a firm of Authorized Public Accountants certified by the Central Chamber of Commerce. The term of the auditor elected covers the current financial year at the time of election and ends upon the closing of the next annual general meeting following such election.

7. Financial year

The company’s financial year is the calendar year.

8. Notice to Convene

Notice of the general meeting and other bulletins to the shareholders shall be delivered no earlier than three (3) months and no later than three (3) weeks before the general meeting, provided that the date of the stock release publication shall be at least nine (9) days before the record date of the general meeting. In order to be authorised to participate in the shareholders’ meeting, a shareholder shall notify the Company no later than the date stated in the notice of the general meeting, which may be no earlier than ten (10) days prior to the meeting.

9. Annual General Meeting

The annual general meeting shall be held annually by the end of June, on the date specified by the board of directors. The annual general meeting shall:

present

  1. the financial statements, including the profits and losses, the balance sheet, the cash flow statements, the attached files, the annual report, the consolidated financial statements; and

  2. the auditors’ report;

resolve on

  1. the adoption of the financial statements and consolidated financial statements;

  2. the use of the profit shown on the balance sheet;

  3. the discharge from liability of the members of the board of directors and the managing director;

  4. the number, remunerations and reimbursement of travel expenses of the members of the board of directors;

  5. the remuneration of the auditors;

elect

  1. the members of the board of directors;

  2. the auditors;

and address

  1. any other matters mentioned in the notice of the meeting.

10. Shares

Shares of the company belong to the book-entry system.

11. Redemption obligation regarding shares

11.1 Redemption obligation

If the provisions of the Securities Markets Act apply to the redemption obligation, the Securities Markets Act shall apply. Otherwise, the provisions of this section shall apply to the redemption obligation.

A shareholder whose share of all the company's shares or the number of votes conferred by the shares, either alone or together with other shareholders, as a result of a transfer other than an inheritance, will or gift, exceeds 60 % (shareholder obligated to redeem) is obligated if a claim is made by other shareholders (shareholders entitled to redemption) to redeem the shares of these shareholders and the securities entitling to shares as set out in this section.

When calculating the shareholder's share of all the company's shares and the votes the shares confer, the following shall be included when calculating the share of votes:

  • shares held by the shareholder as well as persons acting in concert with the shareholder;

  • shares held jointly by the shareholder or by the persons acting in concert with the shareholder together with a third party; and

  • shares, the voting rights attached to which the shareholder is entitled to use or direct under an agreement or other arrangement.

The shares owned by the company itself or by a party under its control shall not be taken into account when calculating the total number of votes in the company.

If a redemption obligation is based on an aggregate shareholding or aggregate number of votes, the shareholders subject to redemption shall jointly and severally be obligated to redeem shares vis-à-vis shareholders entitled to redemption. In such a situation, a claim to redeem shares shall be considered to be made to all the shareholders obligated to redeem without a separate demand.

If the redemption obligation limit has been exceeded solely due to an action of the company or another shareholder, the redemption obligation set out in this section shall not arise until the shareholder who has exceeded the redemption obligation limit acquires or subscribes for more shares in the company or otherwise increases its voting rights in the company.

In case of the shareholder obligated to redeem or another person acting in concert with such shareholder, within one month of the occurrence of the redemption obligation, relinquishes the voting rights exceeding the redemption obligation limit by transferring the company's shares or otherwise reducing their shareholding and voting rights in the company, the redemption obligation shall no longer exist. In order to be released from the redemption obligation, the shareholder obligated to redeem and/or another person acting in concert with such shareholder may not exercise voting rights exceeding the redemption obligation limit in the company during such time period. In addition, the shareholder obligated to redeem shall announce their intention to relinquish the shareholding and voting rights exceeding the redemption limit in connection with the notification on the occurrence of the redemption obligation. Information on the reduction of shareholding and voting rights below the redemption obligation limit shall be notified to the company immediately and the company shall inform the shareholders thereof as soon as possible.

11.2 Redemption price

If the company's share is subject to public trading in Finland at the beginning of the redemption obligation, the redemption price is determined pursuant to the provisions of the Securities Markets Act regarding the consideration applicable in a mandatory bid. Otherwise, the redemption price shall be the price applied in the transfer that exceeded the 60% limit, unless, the shareholder obligated to redeem has been made share transactions during the last 12 months, in which case the redemption price shall determined by the highest purchase price.

In the event the shareholder obligated to redeem or a person acting in concert with the shareholder redeems shares in the company on better terms than what has been paid to those shareholders entitled to redemption at the beginning of the redemption obligation and such redemption takes place between the date on which the redemption obligation has arisen and the due date by which redemption claims shall be made, the shareholder shall be obligated to amend the redemption price to correspond to such acquisition.

In the event the shareholder obligated to redeem or a person acting in concert with the shareholder obligated to redeem redeems shares in the company on better terms than what has been originally informed to those entitled to redemption as the redemption price and such acquisition takes place within nine (9) months of the due date of the redemption procedure, the shareholder obligated to redeem shall be obligated to compensate the difference between the redemption price paid to the shareholders entitled to redemption and the price paid on that redemption. However, the above does not apply in a situation where the price to be paid for a company's security is higher in an arbitration award based on the Finnish Company Act than the redemption price paid to the shareholders entitled to redemption, if the shareholder obligated to redeem or a person acting in concert with such shareholder has not offered to acquire the company's securities on better terms than those originally announced to the shareholders entitled to redemption before or during the arbitration proceedings.

If an acquisition which affects on the redemption price is denominated in foreign currency, the euro conversion value shall be calculated according to the official rate of the European Central Bank for the currency in question seven (7) days prior to date on which the redemption obligation arises.

11.3 Other equity securities

If a redemption obligation arises with regard to other securities which entitle to shares in the company, the redemption, the redemption obligation and the applicable redemption price shall be determined according to the terms and conditions applicable to the security in question. In the absence of such provisions, the redemption price shall be determined by the company’s board of directors based on the redemption price applicable to the corresponding shares of the company.

11.4 Redemption procedure

If the provisions of the Securities Market Act apply to the redemption obligation, the provisions of the Securities Market Act shall apply. Otherwise, the provisions of this Section 11.4 shall apply to the redemption procedure.

A shareholder obligated to redeem shall notify the company's board of directors in writing within seven (7) days from the day the redemption obligation has arisen. This notification shall contain information concerning the number of shares of the shareholder obligated to redeem owns and the number of and purchase prices paid for shares that the shareholder obligated to redeem has acquired or otherwise received during the preceding twelve (12) months. The address at which the shareholder obligated to redeem can be contacted shall be included in the notification.

The company’s board of directors shall notify the shareholders of the redemption obligation within 30 days of receiving the notification referred to above, or, in the absence of such notification or if it fails to arrive in time, within 30 days of the date when the board of directors became aware of the redemption obligation in some other way. The notification shall contain information on when the redemption obligation arose and the grounds for determining the redemption price as far as they are known by the board of directors as well as the latest date by which a claim for redemption shall be made. The notification to the shareholders shall be made in accordance with section 8 of the Articles of Association on the publication of the notice of a general meeting.

A shareholder entitled to redemption shall make a redemption claim in writing within 30 days of the board of directors making the redemption obligation public. The redemption claim, which shall be submitted to the company, shall contain the amount of shares and other securities to which the claim applies. The shareholder entitled to redemption shall at the same time deliver the possible share certificates or other documents entitling to receive shares to be assigned to the shareholder obligated to redeem against the settlement of the redemption price. If the claim has not been presented within the prescribed time period and in the manner described above, the right of the shareholder entitled to redemption to make a redemption claim in the said situation shall expire. The shareholder entitled to redemption has the right to cancel their claim as long as the redemption has not taken place.

After the prescribed time period reserved for the shareholder entitled to redemption has expired, the company's board of directors shall notify the shareholder obligated to redeem of the redemption claims made and instructions for paying the redemption price.

The shareholder obligated to redeem shall within fourteen (14) days of receiving notification of the redemption claim pay the redemption price as determined by the company against handing over of the shares and the securities entitling to the shares or, if the redeemable shares have been entered into the book-entry accounts of the shareholders in question, against a receipt issued by the company. In this case, the company shall make sure that the redeemed shares shall without delay be entered into the book-entry account of the shareholder obligated to redeem. The redemption price which has not been paid in due time shall bear annual penalty interest from the date on which the redemption price should have been executed at the latest at the higher rate of: the rate in accordance with the Interest Act, or 10%. Additionally, if the shareholder obligated to redeem obligation has failed to observe the above provision concerning a redemption obligation, penalty interest shall be calculated from the date on which the communication on the redemption obligation should have been made.

The company shall make all releases relating to the notices and information published to the shareholders of the company set forth in this section 11 in Finnish and in English.

11.5 Other provisions

The decision of the general meeting to amend or delete the provisions of this section 11 of the Articles of Association is valid only if it has been supported by shareholders that have at least five-sixths (5/6) of the votes cast and the shares represented at the general meeting.

11.6 Dispute Resolution

Any disputes arising from the redemption process set out in this Section 11, the related right to claim redemption and the redemption price shall be settled by arbitration governed by the Arbitration Act in Helsinki. The Arbitrators shall be appointed by the Arbitration Board of the Finland Chamber of Commerce. The arbitration shall be governed by Finnish law.

12. Notification of change in holdings

In addition to the provisions of the Finnish Securities Markets Act, a shareholder shall notify their holdings and voting rights to the company in accordance with the provisions of the Securities Markets Act when the holding reaches or exceeds 60 % of the target company's votes or total number of shares. When the company receives a such notification, it shall, in accordance with the provisions of the Securities Markets Act, disclose the information contained in the notification without undue delay.

APPENDIX 2

Charter of Shareholders’ Nomination Board

CHARTER OF THE SHAREHOLDERS’ NOMINATION BOARD OF BOREO PLC

1 Role and duties of the Nomination Board

The shareholders’ nomination board (the “Nomination Board”) of Boreo Plc (the “Company”) is a body appointed by the Company's shareholders, responsible for preparing proposals concerning the number, election and remuneration of the members of the board of directors of the Company to the Company's annual general meeting and, if necessary, to the extraordinary general meeting.

The primary purpose of the Nomination Board is to ensure that the Company's board of directors and its members have sufficient expertise, knowledge and experience to meet the needs of the Company and that they have the opportunity to spend sufficient time to perform the duties of a Board member. The Nomination Board shall pay attention to achieving a good and balanced gender distribution and balance in the Board, assessing the Board's competence as a whole. In its work, the Nomination Board must take into account the Company's diversity principles.

The Nomination Board shall in its operations comply with the laws and other applicable regulations (including the rules of Nasdaq Helsinki Oy and the Finnish Corporate Governance Code).

The Nomination Board has been established to operate until further notice, unless otherwise decided by the Company's annual general meeting.

This Charter contain provisions on the composition, appointment of members and operation of the Nomination Board.

2 Composition of and appointment of the members of the Nomination Board

Nomination Board shall consist of four (4) members.

One of the members is the chair of the board of directors of the Company or another member elected by the board of directors from among its members.

The other members of the Nomination Board will be nominated by the three (3) largest shareholders, each of whom has the right to nominate one (1) member.

The Company’s largest shareholders entitled to elect members to the Nomination Board shall be determined on the basis of the registered holdings in the Company’s list of shareholders held by Euroclear Finland Ltd., on the last working day of August prior to the annual general meeting.

In addition, the following principles are followed in determining the shareholders entitled to appoint a member of the Nomination Board:

(a) If a shareholder who according to the Securities Market Act has the obligation to take into account also other entities’/persons’ shareholding in the Company when notifying the Company of changes in ownership (flagging obligation), the holdings of such shareholder shall be calculated together with the holdings of such other entities/persons, provided that such shareholder presents a written claim directed to the chair of the board of directors no later than the last working day of August. The claim shall be accompanied by a reliable account on of the basis for the flagging obligation.

(b) If a holder of nominee-registered shares wishes to utilise its nomination right, the nominee-registered shareholder must submit a written request to the chair of the board of directors of the Company no later than the last working day of August. The request shall be accompanied by a reliable account on the number of shares and votes held by the holder of the nominee-registered shares.

If two or more shareholders have the same number of shares and all of the members nominated by such shareholders cannot be elected members of the Nomination Board, the right to nominate shall be determined by the drawing of lots among such shareholders by the chair of the board of directors.

The chair of the board of directors of the Company shall annually request each of the three (3) shareholders determined as described above eligible to appoint a representative to nominate one (1) member to the Nomination Board by the last day of September. In case a shareholder does not wish to use their right to appoint a member to the Nomination Board, the right will pass on to the next largest shareholder who otherwise does not have the appointment right.

Before accepting a position, a member nominated to the Nomination Board must carefully consider whether there are any conflicts of interest in the position.

A member elected by the board of directors from among its members convenes the first meeting of the Nomination Board, at which the Nomination Board elects a chair from among its members by a majority decision. A member of the board of directors may not chair the Nomination Board.

If a shareholder which has nominated a member to the Nomination Board transfers its shares before the proposals of the Board have been disclosed so that such shareholder is no longer one of the ten largest shareholders of the Company, the member nominated by such shareholder shall resign her or himself from the work of the Nomination Board with immediate effect. In that case, the Nomination Board shall request the largest shareholder, based on the situation of the day of such request, who has not nominated a member to the Nomination Board, to nominate a new member to.

A shareholder has the right, for compelling reasons, to change the member appointed during the term of office by notifying the chair of the Nomination Board.

The Company announces the composition of the Nomination Board and possible changes in the composition with a stock exchange release.

The term of the members of the Nomination Board ends annually after the new members of the Nomination Board have been appointed.

Members of the Nomination Board do not receive remuneration for their Nomination Board membership. Members' travel expenses are reimbursed in accordance with the Company's travel rules.

3 Decision making

The first meeting of the Nomination Board for each term shall be convened by a member elected by the board of directors of the Company, and thereafter the meetings shall be convened by the chair of the Nomination Board.

The Nomination Board has a quorum when more than half of the members are present. The Nomination Board may not make a decision unless all its members have been given the opportunity to examine the matter and participate in the proceedings.

The Nomination Board shall make its decisions unanimously. If unanimity is not reached, the Nomination Board shall notify the Company's board of directors thereof without delay.

Minutes of all decisions of the Nomination Board shall be prepared. The minutes shall be dated, numbered and archived in a reliable manner. All members of the Nomination Board who attended the Nomination Board meeting sign the minutes.

4 Duties of the Nomination Board

Duties of the Nomination Board are:

  • to prepare and present a proposal for the general meeting concerning the number of members of the board of directors;

  • to prepare and present a proposal for the general meeting concerning the composition of the board of directors;

  • to prepare and present a proposal for the general meeting concerning remuneration of the members of the board of directors (including chair and vice chair of the board of directors) in accordance with the organs’ remuneration policy;

  • at the general meeting answer questions from shareholders about the proposals prepared by the Nomination Board; and

  • responsible for seeking prospective successor candidates for the members of the board of directors.

5 Duties of the chair

The duties of the chair of the Nomination Board are to direct the work of the Nomination Board so that the Nomination Board achieves its objectives effectively and takes into account the expectations of shareholders and the interests of the Company.

The chair of the Nomination Board:

  • convenes the meetings of the Nomination Board and supervises that they are held on schedule;

  • convenes additional meetings as required by the duties of the Nomination Board and always within 14 days of a request from a member of the Nomination Board; and

  • prepares the agenda for the meetings and chairs the meetings.

6 Preparation of the proposal on the composition of the board of directors

General information on the preparation of the proposal

The Nomination Board prepares a proposal for the composition of the board of directors for the Company's annual general meeting and, if necessary, for the extraordinary general meeting. However, each shareholder of the Company may also submit their own proposal directly to the annual general meeting in accordance with the Companies Act.

The Nomination Board may consult the Company's shareholders in the preparation of the proposal and may also use external advisors to find and evaluate candidates. The Company shall bear the reasonable costs of using any external consultants.

When the Nomination Board prepares a proposal for the composition of the new board of directors, the Nomination Board has the right to obtain the results of the annual evaluation of the board of directors' activities, information relevant to assessing the independence of the board of directors' candidates and other information reasonably necessary.

Competence of the member of the board of directors

The board of directors of the Company shall have sufficient expertise, and, as a collective, sufficient competence and experience concerning the field of operation and business of the Company. Each member of the board of directors shall be able to devote sufficient time to perform their duties.

In order to ensure sufficient expertise, the Nomination Board must take into account the applicable legislation and other applicable regulations and, where applicable, the principles set out in the Finnish Corporate Governance Code.

As a collective, the Board must have sufficient expertise and experience, in particular:

  • concerning the line of business and the business of the Company;

  • corporate and financial administration;

  • strategy and M&A;

  • internal audit and risk management; and

  • corporate governance.

7 Proposals to the general meeting

The Nomination Board shall deliver its proposal, to the Company’s board of directors by the end of January preceding the annual general meeting at the latest.

Should a matter that belongs to the duties of the Nomination Board be on the agenda of an extraordinary general meeting, the Nomination Board shall submit its proposals to the board of directors in sufficient time for it to be included in the notice to the general meeting.

The proposals of the Nomination Board shall be disclosed by a stock exchange release and included in the notice to the general meeting. The Nomination Board presents its proposals and their reasoning to the annual general meeting.

If the Nomination Board has not submitted proposals on matters to be prepared by the Nomination Board (or any of them) to the board of directors by the above-mentioned deadlines, such missing proposals shall be prepared and presented to the annual general meeting by the board of directors.

8 Confidentiality

The members of the Nomination Board and the shareholders represented by the members shall keep all information relating to the proposals to be presented to the general meeting confidential, until the Nomination Board has resolved to approve the final proposals and the Company has disclosed the proposals. In addition, the members of the Nomination Board and the shareholders represented by them shall keep all other information received in connection with performing the duties of the Nomination Board confidential, until the Company has disclosed such information.

The chair of the Nomination Board or the chair of the board of directors may at its discretion propose to the board of directors of the Company that the Company signs separate confidentiality agreements with the shareholders and/or the members of the Nomination Board appointed by them. Existing and relevant rules and regulations concerning market abuse shall be applied to any inside information that the members of the Nomination Board might receive.

9 Amendments to the Charter

The Nomination Board shall review the contents of this charter annually and, if necessary, propose to the general meeting decisions to amend this charter. The Nomination Board has been authorised to make technical updates and amendments to this charter. Material amendments, such as the number of members and the nomination process shall always be subject to the resolution of the general meeting. The resolution of the general meeting requires that it is supported by shareholders who holds (i) at least half (1/2) of the votes casted and shares represented at the general meeting if no shareholder owns more than 30 % of the shares and votes in the company, and (ii) at least two-thirds (2/3) of the votes casted and shares represented at the general meeting if any shareholder holds more than 30 % of the company’s shares and votes provided, however, that the resolution requires (iii) at least five-sixths (5/6) of the votes cast and shares represented at the general meeting if a shareholder owns more than 50 % of the shares and votes in the company.

10 Language versions

This Charter has been prepared in Finnish and English. In the event of any discrepancies, the Finnish version shall prevail.

APPENDIX 3

Description of assets, liabilities and shareholders’ equity and valuation of the Merging Company and the preliminary presentation of the balance sheet of the Receiving Company

The following Receiving Company’s Illustrative Merger Balance sheet is based on Boreo’s and Sievi’s balance sheets as at 30 June 2021 and illustrates the application of the acquisition method using book values for the recording of the Merger to Receiving Company’s balance sheet. Sievi’s balance sheet information has been aligned with Boreo’s accounting principles. The final effects of the Merger on the balance sheet of the Receiving Company will be determined according to the balance sheet position and the Finnish Accounting Standards in force as per the implementation date thus the illustrative balance sheet information presented herein is therefore only indicative and subject to change.

EUR thousand

Receiving Company, Boreo Plc before Merger

Merging Company, Sievi Capital Plc before Merger

Preliminary Merger adjustments

Note

Receiving Company's Merger Balance Sheet

ASSETS

Non-current assets

Intangible assets

548

-

-

548

Tangible assets

21

48

-

69

Investments

35 635

46 364

5 232

3)

92 464

Total non-current assets

36 204

46 411

5 232

93 080

Current assets

Inventories

3 213

-

-

3 213

Non-current receivables

4 550

25

-

4 575

Current receivables

2 954

1 053

450

2)

4 458

Cash and cash equivalents

1 083

5 199

670

2), 3), 4)

7 513

Total current assets

11 800

6 278

1 120

19 759

Total assets

48 005

52 689

6 352

112 839

EQUITY AND LIABILITIES

Equity

Share capital

2 484

15 179

-12 163

1)

5 500

Reserve for invested non-restricted equity

1 374

12 886

37 024

1), 3)

51 876

Retained earnings

6 158

24 268

-23 709

1), 2), 4)

6 717

Total equity

10 016

52 332

1 152

64 093

Liabilities

Non-current liabilities

26 500

-

5 200

3)

36 900

Current liabilities

11 489

357

-

11 845

Total liabilities

37 989

357

5 200

48 745

Total equity and liabilities

48 005

52 689

6 352

112 839

1) The equity of the Receiving Company shall be formed in the Merger by applying the acquisition method so that the amount corresponding the book value of the net assets of the Merging Company shall be recorded into reserve for invested non-restricted equity of the Receiving Company with the exception of the increase of EUR 3,016 thousand in share capital as described in Section 11.

2) The dividends received by Boreo from its subsidiaries after 30 June 2021 of EUR 1,081 thousand for the year 2020 has been added to cash and cash equivalents and profit for the period and Boreo’s loan receivables from its subsidiaries of EUR 450 thousand increase current receivables and reduce cash and cash equivalents.

3) The acquisition of Floby Nya Bilverkstad AB, completed by Boreo on 1 September 2021, will increase investments in subsidiaries by EUR 5,232 thousand, long-term liabilities by EUR 5,200 thousand, equity by EUR 593 thousand and cash and cash equivalents by EUR 561 thousand.

4) In accordance with the resolution of Boreo's Annual General Meeting on 15 April 2021, the second installment of the dividend of EUR 0.20 per share for the financial year 2020, in total EUR 522 thousand, will be paid to shareholders in November 2021. Equity and cash and cash equivalents for the illustrative balance sheet data have been reduced by this amount.

5) The acquisition of Rakennuttajatoimisto HTJ Oy, announced by Sievi Capital Plc on 20 September 2021, has not been adjusted to the parent company's balance sheet above. The acquisition is estimated to be completed in October 2021. Sievi Capital’s investment in the subsidiary shares will be approximately EUR 7.8 million. Sievi Capital will finance the investment with its cash and cash equivalents and a new loan of EUR 5.5 million.

The above illustrative balance sheet does not take into account, group contribution, dividends received or distributions, except for dividends received and dividends decided to be distributed referred to in subsections 2 and 4, which may be paid before the implementation date, the acquisition of Rakennuttajatoimisto HTJ Oy announced by Sievi Capital Plc on 20 September 2021 as it is described in subsection 5, other potential acquisitions or restructurings consummated prior to the execution of the Merger except for the acquisition referred to in subsection 3 or the transaction costs related to the Merger, all of which may materially affect the Merging Company's balance sheet and the assets and liabilities of the Merging Company prior to the implementation of the Merger.

APPENDIX 4

Business Mortgages

APPENDIX 5

Auxiliary trade names

In connection with the registration of the Merger and subject to the execution of the Merger, the following auxiliary trade names shall be registered for the Receiving Company:

  • Sievi Capital

Line of business of the auxiliary trade name

Buying, selling, holding and managing shares in companies involved in industrial business, as well as Buying, selling, holding and managing real estate and securities.

  • Suomi Capital

Line of business of the auxiliary trade name

Buying, selling, holding and managing securities and real estate in Finland and Europe.

ANNEX 2 SUMMARY OF BOREO’S AND SIEVI CAPITAL’S FINANCIAL INFORMATION

Boreo’s Key Financial Information

The following key financial information of Boreo has been derived from Boreo's unaudited consolidated January – June 2021 half-year financial report and from the audited consolidated financial statements prepared in accordance with IFRS for the financial year 2020. Machinery Group’s January-February 2020 income statement information has been added to Boreo’s 'Combined' income statement information for the financial year ended 31 December 2020. The acquisition of the Machinery Group was completed on 2 March 2020.

Boreo’s income statement information

EUR million

1-6/2021

1-12/2020

Combined 2020

Revenue

65

98

104

Operating profit

4

4

4

Profit before taxes

4

4

4

Profit for the financial period

3

3

3

Boreo’s balance sheet information

EUR million

30 June 2021

31 Dec. 2020

Total non-current assets

39

27

Total current assets

48

37

Total assets

86

65

Total equity

19

16

Total non-current liabilities

31

22

Total current liabilities

36

26

Total equity and liabilities

86

65

Boreo’s operative operating profit, adjusted EBITA and adjusted EBITDA reconcilitation to the operating profit

EUR million

1-6/2021

2020

Combined
2020

Operating profit

4

4

4

Restructuring

0

1

1

Acquisition related costs

0

1

1

Sale of building

-1

0

0

Operative operating profit

4

6

6

Amortization of intangible assets

1

0

0

Adjusted EBITA

5

6

6

Depreciation of tangible assets

1

2

2

Adjusted EBITDA

6

8

8

Sievi Capital Key Financial Information

The following key financial information of Sievi Capital is derived from Sievi Capital's unaudited January – June 2021 half year report and from the audited consolidated financial statements prepared in accordance with IFRS for the financial year 2020.

Historically, Sievi Capital has not prepared consolidated financial statements or interim reports. Sievi Capital Capital Plc is an IFRS investment entity and thus in the IFRS financial statements of Sievi Capital Plc, its investments in subsidiaries have been treated as financial instruments and measured at fair value in the balance sheet, and they have not been consolidated line by line in the consolidated financial statements. In the IFRS financial statements of an investment entity the investments in subsidiaries are presented in the balance sheet on a net basis combined with one line Investments at fair value through profit or loss. Changes in the fair values of investments are recognized in profit or loss and are presented in the income statement under realized gains / losses on investments or unrealized changes in the value of investments, depending on the nature of the changes in value. Intra-group items that would be eliminated using the acquisition method have not been eliminated. Also, Sievi Capital Plc has not applied IFRS 3 Business Combinations to business combinations when it has acquired control of another entity.

Sievi Capital’s reported IFRS income statement information

EUR million

1-6/2021

1-12/2020

Total income

3

3

Operating profit

13

12

Profit before taxes

13

12

Profit for the period

11

10

Sievi Capital’s reported IFRS balance sheet information

EUR million

30 June 2021

31 Dec. 2020

Total non-current assets

89

74

Total current assets

6

10

Total assets

95

83

Total equity

86

77

Total non-current liabilities

9

6

Total current liabilities

0

0

Total equity and liabilities

95

83

Sievi Capital’s subgroups and the parent company Sievi Capital Plc’s financial information

Indoor Group Holding Oy’s key figures

The following key financial information of Indoor Group Holding Oy are from Sievi Capital's unaudited January – June 2021 half year report and from the annual report for the financial year 2020. The figures presented below are consolidated figures in accordance with IFRS. The interim financial information is unaudited.

EUR million

1-6/2021

1-12/2020

Net sales

97

200

EBITDA (1

16

35

EBIT (2

7

15

Interest-bearing net debt at the end of the period (3

70

69

Sievi Capital’s holding at the end of the period

58.2 %

58.2 %

(1 EBITDA = operating profit + depreciation, amortisation and impairment charges (2 EBIT = operating profit, (3 Interest-bearing net debt = interest-bearing net debt - cash and cash equivalents and loan receivables. Interest-bearing debt on 30 June 2021 includes EUR 61.4 and on 31 December 2020 EUR 66.6 million IFRS 16 related liabilities.

KH-Koneet Group Oy’s key figures

The following key financial information of KH-Koneet Group Oy are from Sievi Capital's unaudited January – June 2021 half year report and from the annual report for the financial year 2020. The figures presented below are consolidated figures in accordance with Finnish Accounting Standards. The interim financial information is unaudited.

EUR million

1-6/2021

1-12/2020

Net sales

74

120

EBITDA (1

4

6

EBITA (2

3

5

Interest-bearing net debt at the end of the period (3)

18

18

Sievi Capital’s holding at the end of the period

66.4 %

66.4 %

(1 EBITDA = operating profit + depreciation, amortisation and impairment charges, (2 EBITA = operating profit + amortization of intangible assets recognised from acquisitions, (3 Interest-bearing net debt = interest-bearing debt - cash and cash equivalents and loan receivables

Logistikas Oy’s key figures

The following key financial information of Logistikas Oy are from Sievi Capital's unaudited January – June 2021 half year report and from the annual report for the financial year 2020. The figures presented below are consolidated figures prepared in accordance with Finnish accounting principles. The figures for 2020 are unaudited as they combine the figures of the acquired Logistikas Palvelut Oy and Logistikas Hankinta Oy until the completion of the acquisition (4 December 2020) and the figures of the Logistikas Group for the period thereafter. The interim financial information is unaudited.

EUR million

1-6/2021

1-12/2020

Net sales

9

20

EBITDA (1

1

2

EBITA (2

0

2

Interest-bearing net debt at the end of the period (3)

2

2

Sievi Capital’s holding at the end of the period (4)

69.0 %

70.0 %

(1 EBITDA = operating profit + depreciation, amortisation and impairment charges, (2 EBITA = operating profit + amortization of intangible assets recognised from acquisitions, (3 Interest-bearing net debt = interest-bearing debt - cash and cash equivalents and loan receivables, (4 Including also shares for which registration was pending at the end of the period

Nordic Rescue Group Oy’s key figures

The following key financial information of Nordic Rescue Group Oy are from Sievi Capital's unaudited January – June 2021 half year report and from the annual report for the financial year 2020. The figures below are consolidated figures in accordance with the Finnish Accounting Standards. The figures for 2020 are unaudited as they combine the figures of the acquired Saurus Oy and Vema Lift Oy until the completion of the acquisition (6 February 2020) and the figures of the Nordic Rescue Group for the period thereafter. The interim financial information is unaudited.

EUR million

1-6/2021

1-12/2020

Net sales

15

30

EBITDA (1

-1

2

EBITA (2

-1

1

Interest-bearing net debt at the end of the period (3

9

8

Sievi Capital’s holding at the end of the period

67.9 %

69.9 %

(1 EBITDA = operating profit + depreciation, amortisation and impairment charges, (2 EBITA = operating profit + amortization of intangible assets recognised from acquisitions, (3 Interest-bearing net debt = interest-bearing debt + purchase price liabilities - cash and cash equivalents and loan receivables.

Key financial information of Sievi Capital Plc under FAS (parent company)

The following key financial information of Sievi Capital’s parent company, Sievi Capital Plc, is derived from Sievi Capital's bookkeeping for January – June 2021 prepared in accordance with Finnish Accounting Standards and from the audited financial statements of the parent company prepared in accordance with Finnish Accounting Standards for the financial year 2020. The interim financial information is unaudited.

Sievi Capital Plc’s income statement information (FAS)

EUR million

1-6/2021

1-12/2020

Total income

-

-

Operating profit

-1

-2

Profit before taxes

-1

-3

Net profit for the period

2

-3

Sievi Capital Plc’s balance sheet information (FAS)

EUR million

30 June 2021

31 Dec. 2020

Total non-current assets

46

44

Total current assets

6

10

Total assets

52

54

Total equity

52

53

Total non-current liabilities

-

0

Total current liabilities

0

0

Total equity and liabilities

52

54


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