NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, NEW ZEALAND, SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. OTHER RESTRICTIONS ARE APPLICABLE. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THE PRESS RELEASE.

PRESS RELEASE: Technology group BCM envisages listing on the Frankfurt Stock Exchange

- Brockhaus Capital Management AG (BCM) is planning a listing of its shares on the regulated market (Prime Standard) of the Frankfurt Stock Exchange in Q3 2020

- BCM focuses on the acquisition of high-margin and high-growth technology champions in the German small/medium-sized enterprise sector - the so called "Mittelstand" - with B2B business models, which are otherwise not accessible for public investors

- The long-term oriented technology group offers its subsidiaries in-depth know-how, the relevant network and a platform for further growth

- Private Placement with institutional investors to comprise of new shares from a capital increase only

- To fund its inorganic growth strategy, BCM plans to use the targeted gross proceeds of
approx. € 100 million (plus 15% greenshoe) to execute on its accretive acquisition pipeline

- BCM benefits from multiple growth trends and in 2019, its second full year of operations, realized with its two acquisitions fully consolidated (pro-forma) revenues of approximately € 54 million and
€ 16 million EBITDA representing an EBITDA margin of c. 30%

Frankfurt/Main, 29 June 2020.

Brockhaus Capital Management AG (BCM), a long-term oriented technology group focusing on high-margin and high-growth technology champions within the German Mittelstand, is preparing its listing on the regulated market (Prime Standard) of the Frankfurt Stock Exchange for the third quarter of 2020.

BCM focuses on acquiring majority stakes in small and medium-sized enterprises (SMEs) in the technology sector whose business-to-business models (B2B) are driven by long-term megatrends across different industries. Specific areas of interest include, inter alia, environmental technologies, security technologies, med-tech and software. The BCM management team has a track record of successfully operating in this sector for almost 20 years and delivering significant value creation through its past acquisitions, over three successful private equity fund generations under the brand of Brockhaus Private Equity.

As a technology platform, BCM offers its subsidiaries the necessary know-how and network to support the respective management teams in developing the company through professionalization and internationalization. In this way, BCM enables long-term profitable growth and value enhancement.

BCM to date has acquired two companies that are representative of its disciplined acquisition strategy: Palas GmbH Partikel- und Lasermeßtechnik ("Palas"), a leading developer of particle measurement technology for high-precision measurement and characterization of air quality (e.g. fine dust and nanoparticles); and IHSE Group, a global technology leader for high performance KVM (Keyboard, Video, Mouse) data transmission technology for highly secure, low latency and loss-free transmission of data in "mission critical" applications.

The gateway into German Mittelstand technology champions

Through its structure as a long-term oriented technology group, BCM positions itself as the ideal partner for technology leaders in the German Mittelstand, offering businesses a path to the next phases of their development and growth.

Founders of technology companies are typically faced with two succession alternatives of either selling to a classical financial investor or strategic buyer. Financial investors (due to their pre-defined investment horizon) often look to sell businesses again in a relatively short period of time, while strategic buyers are usually more interested in the underlying technologies than in maintaining brands, identity, workforce or production facilities. As a long-term oriented technology group in the form of a German stock corporation, BCM offers entrepreneurs a highly attractive alternative that allows their businesses - and work of a lifetime - to maintain their respective core identities while enjoying the upside benefits of belonging to a growth platform and not being sold to the next investor after some years.

Deals are sourced through three main channels: active sourcing by direct approach of entrepreneurs (e.g. attendance of trade shows); a cross-industry network based on BCM's 20 years experience in the Mittelstand; and long-term relationships with investment banks who are well-connected with M&A activity in BCM's core areas of focus.

"We discover and develop champions of the German technology midmarket. It is precisely these champions, in their similarities as well as their differences, that are an example of the recipe for success of German Mittelstand and their ability to lead their niches not only in Europe, but also the Americas and Asia", says Marco Brockhaus, Founder and CEO of BCM.

"Technology champions within our strict focus are typically characterized by a wide range of organic growth opportunities. With BCM we offer those businesses a long-term platform with the necessary expertise, including technological know-how and network, to actively support and systematically develop these companies together with the respective management teams. The goal of long-term, profitable growth and value enhancement is at the heart of our business activities."

Subsidiaries Palas and IHSE are clear examples of BCM's platform business model

After inception as a technology group in 2017, the first subsidiary of BCM, Palas, was acquired in 2018. Palas, based in Karlsruhe, Germany, is a leading developer and manufacturer of high-precision instruments for the measurement, characterization and generation of particles in air. With more than 70 employees, Palas sells technologically leading and certified fine dust and nanoparticle measuring instruments, aerosol spectrometers, generators and sensors under a multitude of active patents. Product demand is driven by the growing awareness of increasing air pollution and its resulting risks, underpinned by rising air quality regulation globally. Palas' products are used particularly in the public sector, industrials, process monitoring, pharmaceutical and medical technology as well as in laboratories and clean rooms. The relevance of Palas' technology and innovation strength is currently being underlined by the rapid development and successful launch of new devices for testing the permeability of respiratory masks. The COVID-19 crisis shows how important it is that masks are tested for their actual effectiveness before they are used in the medical field and in the general population, with customers for example from the governmental space.

In 2019, BCM acquired its second subsidiary IHSE, one of the global technology leaders for high-performance information technology components in the KVM (Keyboard, Video, Mouse) field. With around 120 employees at its headquarters in Oberteuringen at Lake Constance and subsidiaries in the USA and Singapore, IHSE develops a cross-sectional technology benefting from an ever increasing relevance of data in any endmarket and thus being fueled by a variety of megatrends, such as autonomous driving, Industry 4.0 and networked production. The core of IHSE's business model is serving the requirement for highly secure, low latency and loss-free transmission of "mission critical" data. KVM technology switches, converts and extends computer signals, which enables employees to gain highly secure access to one server in the context of sharing, or several in the context of switching. IHSE's technology is used across a broad range of sectors including financial services, air traffic control, transportation (e.g. rail and maritime), healthcare and government institutions. The potential dangers of system failures and cyber-attacks in IHSE's markets result in increasing demands for secure data transmission. Work from home trends during the COVID-19 crisis also offer opportunities for the future development of IHSE.

Marco Brockhaus, CEO of BCM, says: "Our broad and deep network as well as our understanding of market trends, business models and prospects enables us to select the right companies. The key in our view is to remain focused on our strict acquisition criteria and not be distracted by anything that does not fit 100%. We know Germany. We know the Mittelstand and we understand technologies. That is why we acquire champions! Our previous acquisitions reflect the demands we make on ourselves - clear B2B technology leadership on the basis of which strong growth and high profitability can be achieved."

High growth, profitability and cash conversion

As a result of the technology leadership and corresponding pricing power of its subsidiaries, BCM was able to achieve extremely strong, consolidated (pro forma) financial results in the second full financial year after its foundation (reporting date 31 December 2019) with sales of € 54 million and EBITDA of € 16 million.

In addition, businesses within BCM's focus are not only characterized by high profitability but also strong cash conversion that enables them to finance organic growth initiatives intrinsically without the need for any outside financing. For example, in 2019 Palas and IHSE achieved a cash conversion to EBITDA of >90% and >100% respectively.

In the three months ending 31 March 2020, BCM reported pro forma revenue growth of just over 20% and adjusted EBITDA of €2.6 million. Revenues in April and May were clearly below 2019 due to the impact of COVID-19 with a lower order intake and some postponed projects. This is expected to be a temporary development. As a result, BCM expects a high single digit percentage revenue decline in H1 2020 compared to the same period in 2019 on a like-for-like basis. With strengthening signs of a rebound in economic activity, management believes the low point for market activity has passed, with the recent weeks showing a clear pick-up in order intake, strong sales pipeline and overall growth drivers of the group's subsidiaries remaining very much in place. If these trends continue without further COVID-19 complications, such as a second wave or another lockdown, management expects overall revenue growth in 2020 to be mid-single digit with a return to double digit percentage growth in the high-teens in 2021.

Planned private placement and listing to fund more acquisitions

In order to finance the further growth of BCM through new acquisitions and thus enable the long-term development of BCM into a leading Mittelstand technology group in Germany, the Company is planning to issue new shares through a capital increase of approximately € 100 million (plus 15% standard greenshoe-option) - primary shares only - exclusively among institutional investors by way of a private placement. On the back of a proven, multi-channel sourcing system, BCM aims to quickly deploy the funds raised through the private placement with 1-2 acquisitions per annum in line with its strict acquisition criteria. The current pipeline of short-term acquisition opportunities includes technology leaders from the fields of healthcare, environmental technologies and med-tech, as well as potential add-on acquisitions for IHSE and Palas.

Existing shareholders of BCM are fully committed to the long-term development of the Company and do not intend to sell shares in the course of the Private Placement. Additionally, the BCM management team, who are the largest shareholder group prior to the private placement and listing with an approximate shareholding of 33% of the share capital in total, will be subject to a lock-up period of two years (subject to customary exceptions) - thereof one year vis-à-vis the underwriters and a following year vis-à-vis the Company - while the other existing shareholders will each be subject to a lock-up of 180 days.

"The planned listing is the logical next step on our way to building a leading German technology group with a focus on the Mittelstand, with the intended capital increase enabling us to drive further momentum and execute on our strong acquisition pipeline", says Dr. Marcel Wilhelm, COO of BCM.

The international private placement is expected to comprise of newly issued shares from a capital increase only. The Company aims to have its shares listed on the regulated market of the Frankfurt Stock Exchange with simultaneous admission to the sub-segment of the regulated market with additional post-admission obligations (Prime Standard).

Citi and Jefferies are acting as Joint Global Coordinators and Joint Bookrunners and Commerzbank as Joint Bookrunner.

Further information on BCM can be found at www.bcm-ag.com.

About Brockhaus Capital Management

BCM AG, based in Franfurt/Main, is a technology group acquiring high-margin and high-growth technology champions with B2B business models in the German Mittelstand. With a unique platform approach and a long-term horizon, BCM actively and strategically supports its subsidiaries in achieving long-term profitable growth beyond industry and country boundaries. At the same time, BCM offers a gateway into these non-listed German technology champions, which are otherwise inaccessible to capital market investors.

Contact Details

For investors:

Brockhaus Capital Management - Paul Göhring
Head of Investor Relations
Phone: +49 69 20 43 40 978
Mobile: +49 151 4616 0724
Fax: +49 69 20 43 40 971
E-Mail: goehring@bcm-ag.com

For media:

USC - Iris C. Sistemich
Phone: +49 221 280 655 10
E-Mail: presse@us-communications.de

Disclaimer

This announcement is an advertisement and not a prospectus.
This release is not for distribution, directly or indirectly, in or into the United States (including its territories and dependencies, any State of the United States and the District of Columbia). The shares in Brockhaus Capital Management AG (the "Shares") mentioned herein may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the US Securities Act of 1933, as amended (the "Securities Act") and in compliance with applicable state securities laws. The Shares have not been, and will not be, registered under the Securities Act and will not be offered or sold in the United States, except on the basis of applicable exemptions from registration. The Company has not been and will not be registered under the US Investment Company Act of 1940 and investors will not be entitled to the protections of that Act.
In the United Kingdom, this communication is and will be only addressed to, and directed at "qualified investors" as defined in the Prospectus Regulation, who are also (i) persons who have professional experience in matters relating to investments falling within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), (ii) high net worth bodies corporate, unincorporated associations and partnerships and trustees of high value trust as described in Article 49(2) of the Order or (iii) other persons to whom it may lawfully be communicated (all such persons together being referred to as "relevant persons"). Any person who is not a relevant person should not act or rely on this document or any of its contents. Copies of this announcement are not being made and may not be distributed or sent into the United States or to a US Person or into Canada, Australia, New Zealand, South Africa or Japan.

No public offering of securities is currently planned in any jurisdiction.

This release contains forward-looking statements. "Statements contained herein may constitute "forward-looking statements." Forward-looking statements are generally identifiable by the use of the words "may", "will", "should", "plan", "expect", "anticipate", "estimate," "believe", "intend", "project", "goal" or "target" or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements are based on current expectations and involve a number of nown and unknown risks, uncertainties and other factors that could cause the Group's or its industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. You should not place undue reliance on forward-looking statements and the Group does not undertake publicly to update or revise any forward-looking statement that may be made herein, whether as a result of new information, future events or otherwise.

The Joint Global Coordinators and Bookrunners are acting exclusively for the Company and no-one else in connection with the planned private placement and listing. It will not regard any other person as their respective clients in relation to the planned private placement and listing and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, nor for providing advice in relation to the planned private placement and listing, the contents of this announcement or any transaction, arrangement or other matter referred to herein. In connection with the private placement, the Joint Global Coordinators and Bookrunners and its affiliates may take up a portion of the shares offered in the planned private placement as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own accounts such shares and other securities of the Company or related investments. In addition the Joint Global Coordinators and Bookrunners and its affiliates may enter into financing arrangements (including swaps or contracts for differences) with investors in connection with which the Joint Global Coordinators and Bookrunners and its affiliates may from time to time acquire, hold or dispose of shares of the Company. The Joint Global Coordinators and Bookrunners do not intend to disclose the extent of any such investment or transactions, other than in accordance with any legal or regulatory obligations to do so. None of the Joint Global Coordinators and Bookrunners or any of its directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this release (or whether any information has been omitted from the release) or any other information relating to BCM, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available, or for any loss howsoever arising from any use of this release or its contents or otherwise arising in connection therewith.