NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

FOR IMMEDIATE RELEASE

5 May 2023

Increased and Final* Offer for Hyve Group Plc: update on financing

On 15 March 2023, the boards of Hyve Group plc ("Hyve") and Heron UK Bidco Limited ("Bidco") announced (the "Rule 2.7 Announcement"), pursuant to Rule 2.7 of the City Code on Takeovers and Mergers (the "Code"), that they had agreed the terms of a recommended cash offer to be made by Bidco for the entire issued and to be issued share capital of Hyve (the "Acquisition"). On 25 April 2023, Bidco announced an increased and final recommended cash offer for Hyve at a price of 121 pence per Hyve Share. Terms defined in the Rule 2.7 Announcement have the same meanings when used in this Announcement.

On 6 April 2023 it was announced that Bidco had entered into a financing commitment letter and related fee letter (the "Financing Commitment Documents") in relation to the financing of the Acquisition, in each case with certain funds (the "Hayfin Funds") managed and/or advised by Hayfin Capital Management LLP.

On 5 May 2023, Bidco entered into a senior facilities agreement with the Hayfin Funds and Deutsche Bank AG, London Branch ("DB") (the "Senior Facilities Agreement"). The Senior Facilities Agreement reflects and, in certain places, updates, the financing terms committed to in the Financing Commitment Documents. A summary of the terms of the Senior Facilities Agreement is attached as the Appendix to this Announcement.

Copies of the Senior Facilities Agreement, certain related documents and this Announcement will be available free of charge, subject to certain restrictions relating to persons resident in certain jurisdictions, on Bidco's website at www.provequity.com/hyvegroupplc by no later than 12.00 p.m. on the business day following the date of this Announcement.

*Bidco reserves the right to increase the Acquisition Price and/or otherwise to improve the terms of the Acquisition if there is an announcement on or after the date of this Announcement of an offer or a possible offer for Hyve by a third party offeror or potential offeror.

FURTHER INFORMATION

This Announcement is for information purposes only and is not intended to and does not constitute, or form part of, an offer to sell or an invitation to purchase any securities or the solicitation of an offer to buy, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, pursuant to the Acquisition or otherwise, nor shall there be any purchase, sale, issuance or exchange of securities or such solicitation in any jurisdiction in which such offer, solicitation, sale, issuance or exchange would be unlawful prior to the registration or qualification under the laws of such jurisdiction. The Acquisition will be made solely by means of the Scheme Document or any document by which the Acquisition is made, which contains the full terms and conditions of the Acquisition, including details of how to vote in respect of the Acquisition. This Announcement has been prepared for the purpose of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of other jurisdictions.

Neither the content of any website referred to in this Announcement nor the content of any website accessible from hyperlinks is incorporated into, or forms part of, this Announcement. Hyve shareholders may request a hard copy of this Announcement by contacting Equiniti on +44 371 384 2030. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 8.30 a.m. to 5.30 p.m., Monday to Friday, excluding public holidays in England and Wales. Please note that Equiniti cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes. Hyve shareholders may also request that all future documents, announcements and information to be sent to them in relation to the Acquisition should be in hard copy form. If a Hyve shareholder has received this Announcement in electronic form, hard copies of this Announcement and any document or information incorporated by reference into this Announcement will not be provided unless such a request is made.

APPENDIX

Summary of the senior facilities agreement

On 5 May 2023, Bidco, the Hayfin Funds and DB (among others) entered into the Senior Facilities Agreement concerning the debt financing facilities described below with the Hayfin Funds and DB (the "Mandated Lead Arrangers").

Under the terms of the Senior Facilities Agreement, the Mandated Lead Arrangers have agreed to make available certain term loans described more particularly below.  The Senior Facilities Agreement also sets out the mechanics for establishing additional facilities, subject to the satisfaction of certain conditions (as set out in the Senior Facilities Agreement), including (on or before the Closing Date) an additional revolving facility (the "Uncommitted Revolving Facility"). The Senior Facilities Agreement contemplates that additional banks, financial institutions or other parties may be appointed to provide all or part of the Uncommitted Revolving Facility.

The facilities, amounts and documentation process

The debt financing facilities comprise (i) a senior secured term loan facility in the principal amount of up to $107,000,000 (the "USD Unitranche Facility"), (ii) a senior secured term loan facility in the principal amount of up to €97,300,000 (the "EUR Unitranche Facility" and together with the USD Unitranche Facility, the "Unitranche Facilities") (ii) a senior secured term acquisition facility in the principal amount of up to $55,000,000 (the "Acquisition Facility"), (iii) a senior secured delayed draw term facility in the principal amount of up to $37,000,000 (the "DDTL1") and (iv) a senior secured delayed draw term facility in the principal amount of up to $125,000,000  (the "DDTL2"). The Unitranche Facilities, the Acquisition Facility, the DDTL1 and the DDTL2 are referred to as the "Facilities".

The Facilities are available to be drawn down by certain members of the Bidco Group, subject to satisfaction of the conditions precedent set out in the Senior Facilities Agreement and as summarised below.

The proceeds of the Facilities are to be applied as follows:

(A) in respect of the Unitranche Facilities, to finance/refinance the consideration payable for the Acquisition, the payment of fees, costs and expenses relating to the Acquisition or any transaction document, to refinance/discharge/acquire existing Hyve Group indebtedness and broken funding costs, prepayment/redemption fees or premia, hedge termination amounts and fees, costs and expenses related to that refinancing/discharge/acquisition;

(B) in respect of the Acquisition Facility, to finance/refinance any permitted acquisition or permitted joint venture (including deferred consideration, earn-outs or similar arrangements, subject to certain limitations where those payments relate to earn-outs that will also be financed by the DDTL1), the payment of fees/costs/expenses incurred in connection therewith, the refinancing/discharge/acquisition of existing indebtedness of any related entity acquired (and related broken funding costs, prepayment/redemption fees or premia, hedge termination amounts and fees, costs and expenses);

(C) in respect of the DDTL1, to finance certain earn-outs and related fees, costs and expenses; and

(D) in respect of the DDTL2, to directly or indirectly finance/refinance a particular acquisition, the refinancing/repayment/acquisition/discharge of certain existing indebtedness in connection with that acquisition and the payment/refinancing of fees, costs and expenses incurred in connection with the foregoing.

Repayment terms - maturity

Once drawn, the Facilities must be repaid as a bullet payment in full on the date falling 7 years after the date on which the first drawing is made under a Facility (the "Closing Date").

Prepayment and repayment terms - voluntary/mandatory

Bidco may voluntarily cancel and prepay the Facilities in whole or in part at any time subject to giving three Business Days' prior notice. Prepayment and cancellation rights shall apply (and/or may be exercised by the applicable lenders) in respect of illegality, change of control or a sale of all or substantially all of the assets of the Bidco Group. Additionally, mandatory prepayment rights shall apply (subject to various exceptions and exclusions) in respect of the prepayment of net cash proceeds received from certain disposals, acquisition related claims, insurance claims and in the event of an IPO which does not constitute a change of control.

Interest rates

The rate of interest payable on each loan drawn under the Facilities is the aggregate of the applicable margin, plus the applicable reference rate (being term SOFR for USD loans, Euribor for Euro loans and compounded SONIA for Sterling loans).

Subject to the below, the margin in respect of the Facilities is (in each case) 6.75% per annum.

Notwithstanding the foregoing, a margin rate of 7.25% shall apply for each Facility from the Closing Date until 12 months thereafter (the "Opening Margin Period"). After the end of the Opening Margin Period, the highest margin rate will be 6.75% for each Facility where total net leverage is greater than 4.25:1, with a step-down to 6.50% where total net leverage is equal to or less than 4.25:1 but greater than 4.00:1 and an additional step-down to 6.25% where total net leverage is equal to or less than 4.00:1.

Guarantees and security

The Mandated Lead Arrangers and lenders will receive the benefit of guarantees and security in respect of each of the Facilities and guarantees and security will initially be provided by both Heron UK Finco Limited and Bidco.  They will each guarantee the Facilities, and provide security over shares in certain subsidiaries, certain of their bank accounts and certain intra-group receivables, in addition to a floating charge pursuant to certain security documents (the "Initial Security Documents").  In due course after the Closing Date, other members of the Bidco Group will also provide guarantees and security as is customary for a transaction of this nature.

Representations, warranties, undertakings and events of default

The Senior Facilities Agreement contains representations and warranties, a financial covenant, undertakings (both operational and as regards certain information) and events of default that are customary for a financing of this nature.

Representations and warranties have been made (subject to various exceptions and materiality and other thresholds) regarding status, binding obligations, non-conflict with other obligations, power and authority, validity and admissibility in evidence, governing law and enforcement, insolvency, no default, no misleading information, financial statements, no proceedings pending or threatened, no breach of laws, environmental laws, taxation, ranking, good title to assets, legal and beneficial ownership, intellectual property, centre of main interests, pensions, holding company status of Heron UK Finco Limited and Bidco and sanctions.

The Senior Facilities Agreement contains a financial covenant based on total net leverage, commencing with the first financial quarter date falling at least three full quarter periods after the Closing Date (initially set at 8:00:1, and decreasing over time). The Senior Facilities Agreement also contains operational general undertakings (subject to various exceptions and materiality and other thresholds) regarding, among other things, due authorisations, compliance with laws, environmental compliance and claims, tax, restrictions on mergers/change of business/acquisitions/joint ventures, maintenance of holding company status of Heron UK Finco Limited and Bidco, preservation of assets, pari passu ranking, negative pledge, disposals, arm's length dealings, restrictions on granting loans, incurring debt, providing guarantees, making restricted payments and issuing share capital.  In addition, certain information undertakings have been given with respect to the provision of financial statements and budgets, compliance certificates, annual lender presentations and various other miscellaneous items.

Events of default (subject to various exceptions, materiality and other thresholds and grace periods) consist of non-payment, breach of financial covenant/reporting obligations, breach of other obligations and misrepresentations, cross-default, certain insolvency events, unlawfulness and invalidity/repudiation/rescission of certain finance documents, breaches of intercreditor documentation and litigation events.

Conditions precedent

The Senior Facilities Agreement sets out a number of conditions precedent to first utilisation (both documentary and otherwise) which include, among other things, the delivery of the Initial Security Documents and customary officer's certificates setting out various confirmations in respect of applicable conditions being satisfied.

The foregoing description is a high-level overview of key indicative terms of the Senior Facilities Agreement and ancillary documents.