SQS -1x Square

TIDMSQS TIDMTTM

RNS Number : 4375Z

SQS Software Quality Systems AG

15 December 2017

DISCLOSURE OF INSIDE INFORMATION PURSUANT TO ARTICLE 17 OF THE EU MARKET ABUSE REGULATION (EU 596/2014, MAR)

THIS ANNOUNCEMENT AND THE INFORMATION HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL

FOR IMMEDIATE RELEASE

15 December 2017

RECOMMED CASH OFFER

for

SQS SOFTWARE QUALITY SYSTEMS AG

by

WEILCHENSEE 884. V V GmbH

(to be renamed Assystem Services Deutschland GmbH)

Summary

-- Bidco and SQS are pleased to announce that they have reached agreement on the terms of a recommended all cash offer to be made by Weilchensee 884. V V GmbH ("Bidco") for the entire issued and to be issued share capital of SQS Software Quality Systems AG ("SQS" or the "Company") not already owned, or agreed to be acquired, by Bidco (the "Offer").

-- Bidco is a newly incorporated German company acquired by Assystem Technologies SAS ("Assystem Technologies") for the purpose of making and implementing the Offer. Further details in relation to Assystem Technologies and Bidco are set out in paragraph 10 of the following announcement.

-- Under the terms of the Offer, SQS Shareholders who accept the Offer will be entitled to receive 825 pence in cash for each SQS Share (the "Offer Price").

-- The Offer values the entire issued and to be issued share capital of SQS at approximately GBP281.3 million on a fully diluted basis and represents a premium of approximately:

-- 56.4 per cent. to the Closing Price per SQS Share of 527.5 pence on 14 December 2017, being the last Business Day prior to the date of this announcement;

-- 53.0 per cent. to the volume weighted average Closing Price per SQS Share of 539.1 pence in the six months to 14 December 2017, being the last Business Day prior to the date of this announcement; and

   --      31.5 per cent. to the highest ever Closing Price per SQS Share of 627.5 pence in May 2015. 

-- The SQS Management Board and SQS Supervisory Board, who have been so advised by Numis as to the financial terms of the Offer, each consider the terms of the Offer to be fair and reasonable. In providing advice to the SQS Boards, Numis has taken into account the commercial assessments of the SQS Managing Directors and the SQS Supervisory Board Members. Numis is providing independent financial advice to the SQS Boards.

-- Accordingly, the SQS Management Board and the SQS Supervisory Board each intends to recommend unanimously that SQS Shareholders accept the Offer, as all of the SQS Managing Directors and all of the SQS Supervisory Board Members who hold SQS Shares have irrevocably undertaken to do, or procure to be done, in respect of their own and their close relatives' beneficial holdings of, in aggregate, 4,126,049 SQS Shares, representing approximately 12.7 per cent. of the existing issued share capital of SQS. SQS Shareholders should refer to paragraph 7 of the following announcement for further detail on the background to, and reasons, for the SQS Boards' recommendations.

-- Bidco has also received irrevocable undertakings from Rudolf Van Megen, Herald Investment Management Limited and Marlborough Fund Managers Limited to accept, or procure acceptances of, the Offer in respect of a total of 7,104,868 SQS Shares, representing, in aggregate, approximately 21.9 per cent. of SQS's existing issued share capital. Further details of these irrevocable undertakings are set out in Appendix 3 to the following announcement.

-- In addition, Bidco has also received non-binding letters of intent from Octopus Investments Ltd, Brooks Macdonald Asset Management Limited, Rock (Nominees) Limited, Miton Asset Management Limited, J O Hambro Capital Management Limited and Schroder Investment Management Limited to accept, or procure acceptances of, the Offer in respect of a total of 10,172,543 SQS Shares, representing, in aggregate, approximately 31.4 per cent. of SQS's existing issued share capital. Further details of these non-binding letters of intent are set out in Appendix 3 to the following announcement.

-- Accordingly, Bidco has received irrevocable undertakings and non-binding letters of intent to accept, or procure the acceptance of, the Offer in respect of a total of 21,403,460 SQS Shares representing, in aggregate, approximately 66.0 per cent. of SQS's existing issued share capital.

-- The Offer is conditional upon, amongst other things, (a) Bidco receiving valid acceptances (which have not been validly withdrawn) in respect of SQS Shares which, when taken together with any other SQS Shares acquired by Bidco (whether pursuant to the Offer or otherwise), represent not less than 75 per cent. in nominal capital of the SQS Shares and of the voting rights normally exercisable at a general meeting of SQS (assuming exercise of all SQS Stock Options which are outstanding at that time which are not the subject of valid acceptances of the Stock Option Proposals); (b) valid acceptances of the Stock Option Proposals being received (and not validly withdrawn) which will result in the total number of outstanding SQS Stock Options representing, in aggregate, less than 5 per cent. of the nominal capital of the SQS Shares and of the voting rights then normally exercisable at a general meeting of SQS; (c) the German Federal Cartel Office (Bundeskartellamt) ("GFCO") informing Bidco that it may proceed with the proposed acquisition of the entire issued and to be issued share capital of SQS by Bidco as contemplated by this Offer ("Proposed Acquisition") or the time periods given to the GFCO under the Act Against Restraints of Competition to: (i) initiate a second phase investigation or (ii) deliver a decision prohibiting the Proposed Acquisition, in each case, having expired; (d) the Austrian Federal Competition Authority (Bundeswettbewerbsbehörde) ("AFCA") informing Bidco that the AFCA and the Austrian Federal Cartel Prosecutor (Bundeskartellanwalt) ("AFCP") have both waived their right to initiate an in-depth review under Section 11 of the Cartel Act (Kartellgesetz 2005) ("Cartel Act") of the Proposed Acquisition of SQS by Bidco or the time periods given to: (i) the AFCA and the AFCP to initiate an in-depth review under Section 11 of the Cartel Act having expired or (ii) the Cartel Court to order the prohibition of the Proposed Acquisition pursuant to Section 14 of the Cartel Act having expired; and (e) no request to the European Commission having been made by either the GFCO or the AFCA under Article 22(1) of the Council Regulation (EC) No. 139/2004 ("EUMR"), and SQS not having made a submission pursuant to Article 4(5) of the EUMR for the Proposed Acquisition to be examined by the European Commission under the EUMR.

-- If the Offer becomes, or is declared, unconditional in all respects and valid acceptances of the Offer are received which, when taken together with any other SQS Shares acquired by Bidco (whether pursuant to the Offer or otherwise), will result in Bidco holding 75 per cent. or more of the SQS Shares and of the voting rights normally exercisable at a general meeting of SQS (assuming exercise of all SQS Stock Options which are outstanding at that time which are not the subject of valid acceptances of the Stock Option Proposals), Bidco intends to procure that SQS will make an application to the London Stock Exchange for the cancellation of the admission to trading on AIM of the SQS Shares. Bidco also intends to procure that SQS will make an application to the Frankfurt Stock Exchange for the cancellation of inclusion of SQS Shares in the Open Market of Deutsche Börse. Cancellation of admission to trading on AIM of SQS Shares and to the inclusion of SQS Shares on the Open Market of Deutsche Börse is likely to reduce significantly the liquidity and marketability of any SQS Shares in respect of which the Offer has not been accepted at such time.

-- If the Offer becomes, or is declared, unconditional in all respects Bidco will consider (i) concluding with SQS a profit and loss transfer agreement and, at Bidco's option, a domination agreement in order to create a tax unity between Bidco and SQS or (ii) a merger of SQS into Bidco combined with a compulsory acquisition proceeding pursuant to Section 62 paragraph 5 of the German Transformation Act (Umwandlungsgesetz) or (iii) a compulsory acquisition proceeding pursuant to Sections 327a ff. of the German Stock Corporation Act (Aktiengesetz). In relation to (ii) and (iii), SQS Shareholders should be aware that the cash compensation payable for each SQS Share in these circumstances may be equal to, higher than or lower than the Offer Price. Further details are set out in paragraph 18 of the following announcement.

-- SQS is a German registered company whose shares are traded on AIM. It is, therefore, not subject to the UK City Code on Takeovers and Mergers ("Code"). Accordingly, the Code does not apply to the Offer by Bidco for SQS and this transaction is not subject to the jurisdiction of, or regulated by, the UK Panel on Takeovers and Mergers ("Takeover Panel"). However, SQS and Bidco have agreed, to the extent and subject as set out in the Framework Agreement, that they will conduct themselves and the Offer as if the Offer were subject to the Code. Further details are set out in paragraph 20 of the following announcement.

-- The German Takeover Act (Wertpapiererwerbs- und Übernahmegesetz) ("WpÜG") does not apply to the Offer as the SQS Shares are not traded on an organised market pursuant to Section 1 paragraph 1 of the WpÜG.

Commenting on the Offer, Diederik Vos, Chief Executive Officer of SQS, said:

"The SQS Boards welcome the Offer and believe that it reflects an attractive valuation for SQS at a significant cash premium to the prevailing share price. We believe that it is an opportunity to join up with an organisation that is complementary and which provides enhanced opportunity for the benefit of our staff and customers. Combining the two companies will create a truly global business delivering a "best in class" offering to customers based on a shared culture of technical excellence, continued innovation and providing the highest standards of service."

Commenting on the Offer, Olivier Aldrin, Chief Executive Officer of Assystem Technologies and Managing Director of Bidco, said:

"We are delighted that our proposal has been recommended by the SQS Boards. The coming together of Assystem Technologies and SQS creates a dynamic, fast-growing international business with complementary outlook, strategic geographical presence and an enhanced ability to market innovative products and services. The enlarged business will combine SQS's expertise in quality assurance and process consulting in the digital world, with Assystem Technologies' breadth of engineering product design capabilities, positioning the Enlarged Group to leverage the convergence of the digital and physical worlds to offer quality assurance of both products and processes to its enterprise customer base across a range of complementary geographies and end markets. We believe that the potential revenue synergies available from combining SQS with Assystem Technologies, as well as some limited integration benefits, are fairly reflected in the significant cash premium which the Offer represents."

This summary should be read in conjunction with, and is subject to, the full text of the following announcement (including its Appendices). The Offer will be subject to the Conditions and certain further terms set out in the following announcement and to the full terms and conditions that will be set out in the Offer Document and, in respect of SQS Shares held directly in registered form, the Form of Acceptance.

It is intended that (i) the Offer Document and the Form of Acceptance containing further details of the Offer will be despatched to SQS Shareholders (other than to persons in a Restricted Jurisdiction) and (ii) the documentation relating to the Stock Option Proposals will be despatched to SQS Stock Option Participants (other than to persons in a Restricted Jurisdiction), in each case, as soon as practicable and, in any event, not later than 28 days after the date of this announcement (unless agreed otherwise with SQS).

Appendix 1 contains the conditions and certain further terms of the Offer. Appendix 2 describes the bases and sources of certain information contained in this summary and the following announcement. Appendix 3 contains details of irrevocable undertakings and letters of intent received by Bidco. Appendix 4 contains the definitions of certain terms used in this summary and the following announcement.

SQS confirms that, as of close of business on 14 December 2017, it had 32,431,967 SQS Shares in issue. The International Securities Identification Number for SQS Depositary Interests is DE0005493514.

The above figure may be used by SQS Shareholders to determine the percentage of issued share capital they hold in SQS for the purposes of making disclosures as described in this announcement.

Enquiries:

SQS Software Quality Systems AG Tel: +49 (0) 220 391 540

Diederik Vos, Chief Executive Officer

René Gawron, Chief Financial Officer

Numis (Nominated Adviser, Financial Adviser and Joint Broker to SQS) Tel: +44 (0) 207 260 1000

Simon Willis

Jamie Lillywhite

Mark Lander

Stockdale Securities Limited (Joint Broker to SQS) Tel: +44 (0) 207 601 6100

Robert Finlay

Antonio Bossi

FTI Consulting (Financial Media and Investor Relations to SQS) Tel: +44 (0) 203 727 1000

Matt Dixon / Dwight Burden

Weilchensee 884. V V GmbH (to be renamed

Assystem Services Deutschland GmbH) Tel: +33 (0) 155 650 325

Olivier Aldrin, Managing Director

Rothschild (Financial Adviser to Assystem Technologies and Bidco) Tel: +44 (0) 207 280 5000

Alistair Allen

Stuart Vincent

Omaier Akhtar

Ricky Paul

Numis, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as nominated adviser, financial adviser and joint broker exclusively for SQS and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters referred to in this announcement and will not be responsible to anyone other than SQS for providing the protections afforded to clients of Numis, nor for providing advice in relation to the Offer or any other matter or arrangement referred to herein.

Stockdale Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as joint broker exclusively for SQS and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters referred to in this announcement and will not be responsible to anyone other than SQS for providing the protections afforded to clients of Stockdale Securities Limited, nor for providing advice in relation to the Offer or any other matter or arrangement referred to herein.

Rothschild, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser exclusively for Assystem Technologies and Bidco and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters referred to in this announcement and will not be responsible to anyone other than Assystem Technologies and Bidco for providing the protections afforded to clients of Rothschild, nor for providing advice in relation to the Offer or any other matter or arrangement referred to herein.

IMPORTANT NOTES

Further information

This announcement is for information purposes only. It is not intended to and does not constitute, or form part of, an offer or invitation or the solicitation of an offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities pursuant to the Offer or otherwise, nor shall there by any sale, issuance, or transfer of securities in any jurisdiction in contravention of applicable law.

The Offer will be made solely by means of the Offer Document and, in respect of SQS Shares held directly in registered form, the Form of Acceptance, which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted. Any decision in respect of, or other response to, the Offer should be made only on the basis of the information contained in those documents.

This announcement has been prepared for the purpose of complying with English and German law, where applicable, and the AIM Rules 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 jurisdictions outside of England and Wales and Germany.

Bidco will prepare the Offer Document and the Form of Acceptance to be distributed to the SQS Shareholders. SQS and Bidco urge the SQS Shareholders to read the Offer Document and the Form of Acceptance carefully when they become available because they will contain important information relating to the Offer.

The receipt of cash pursuant to the Offer by SQS Shareholders may be a taxable transaction under applicable national, state and local, as well as foreign and other, tax laws. Each SQS Shareholder is urged to consult their independent professional adviser regarding the tax consequences of accepting the Offer.

This announcement does not constitute a prospectus or prospectus equivalent document.

Overseas Shareholders

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law, and the availability of the Offer to persons who are residents, citizens or nationals of jurisdictions other than the United Kingdom or Germany may be restricted by laws and/or regulations of those jurisdictions. Therefore any persons who are subject to the laws and regulations of any jurisdiction other than the United Kingdom or Germany should inform themselves about and observe any applicable requirements in their jurisdiction. Any failure to comply with the applicable requirements may constitute a violation of the laws and/or regulations of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Offer disclaim any responsibility or liability for the violation of such requirements by any person.

Unless otherwise determined by Bidco and permitted by applicable law and regulation, the Offer will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may accept the Offer by any such use, means, instrumentality or from within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this announcement and all documentation relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction, and persons receiving this announcement and all documentation relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from any Restricted Jurisdiction.

Unless otherwise permitted by applicable law and regulation, the Offer may not be made, directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of, any Restricted Jurisdiction and the Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.

Notice to German investors

This announcement has not been prepared in accordance with the German Takeover Act (Wertpapiererwerbs- und Übernahmegesetz) ("WpÜG") as the WpÜG does not apply to the Offer.

Notice to US investors

The Offer is being made for securities in a German registered company whose shares are traded on AIM and on the Open Market of Deutsche Börse and SQS Shareholders in the United States should be aware that this announcement and documentation relating to the Offer have been, or will be, prepared in accordance with disclosure requirements, format and style that differ from those in the United States. All financial information that is included in this announcement or that may be included or referred to in any other documents relating to the Offer, have been, or will be, prepared, save where Bidco and SQS have expressly agreed otherwise, in accordance with International Financial Reporting Standards adopted by the European Union and therefore may not be comparable to financial statements of US companies or companies whose financial statements are prepared in accordance with US GAAP.

The Offer, if required to be made, will be made in the United States pursuant to applicable exemptions under the US tender offer rules and securities laws and otherwise in accordance with the applicable provisions of English and German law. Accordingly, the Offer will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments that are different from those applicable under US domestic tender offer procedures and law.

Both SQS and Bidco are companies registered under the laws of Germany. It may not be possible for SQS Shareholders in the United States to effect service of process within the United States upon SQS or Bidco or their respective officers or directors or to enforce against any of them judgments of the United States predicated upon the civil liability provisions of the federal securities laws of the United States. It may not be possible to sue SQS or Bidco or their respective officers or directors in a non-US court for violations of the US securities laws. There is also substantial doubt as to enforceability in the United Kingdom in original actions, or in actions for the enforcement of judgments of US courts, based on the civil liability provisions of US federal securities laws.

Forward-looking statements

This announcement (including information incorporated by reference into this announcement) contains certain forward-looking statements. These statements are based on the current expectations of Bidco or SQS (as the case may be) and are naturally subject to uncertainty and changes in circumstances. These forward-looking statements may include statements about the expected effects on Bidco or SQS of the Offer, the expected timing and scope of the Offer, strategic options and all other statements in this announcement other than historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "budget", "schedule", "forecast", "project", "goal", "believe", "hope", "aims", "continue", "will", "may", "should", "would", "could", "subject to", or other words of similar meaning. By their nature, forward-looking statements involve known and unknown risks and uncertainties, because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward-looking statements in this announcement could cause actual results, outcomes and developments to differ materially from those expressed in, or implied by, such forward-looking statements and such statements are therefore qualified in their entirety by the risks and uncertainties surrounding these future expectations. Many of these risks and uncertainties relate to factors that are beyond the entities' ability to control or estimate precisely, such as, but not limited to, general business and market conditions both globally and locally, political, economic and regulatory forces, industry trends and competition, future exchange and interest rates, changes in government and regulation including in relation to health and safety, the environment, labour relations and tax rates and future business combinations or dispositions. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, neither Bidco nor SQS can give any assurance, representation or guarantee that such expectations will prove to have been correct and such forward-looking statements should be construed in light of such factors and you are therefore cautioned not to place reliance on these forward-looking statements which speak only as at the date of this announcement. Neither Bidco nor SQS assumes any obligation to update or correct the information contained in this announcement (whether as a result of new information, future events or otherwise), except as required by applicable law or regulations.

No profit forecasts or estimates

Nothing in this announcement is intended or shall be deemed to be a forecast, projection or estimate of the future financial performance of Bidco or SQS or the Enlarged Group and no statement in this announcement should be interpreted to mean that earnings or earnings per share of those entities (where relevant) for the current or future financial periods would necessarily match or exceed the historical published earnings or earnings per share of those entities (where relevant).

Application of the Code and dealing disclosure requirements

SQS is a German registered company whose shares are traded on AIM and it is therefore not subject to the Code. Accordingly, SQS Shareholders and others dealing in SQS Shares are not obliged to disclose any of their dealings under the provisions of the Code. However, market participants are requested to make disclosures of "dealings" as if the Code applied and as if SQS were in an "offer period" under the Code. Disclosures made in relation to relevant securities of SQS should be released via a Regulatory Information Service using the headline "Document re: SQS". The headline "Form 8/8.3" should not be used. Any question regarding completion of these forms should be raised with Numis (on +44 (0) 207 260 1000).

SQS's website contains the form of disclosure requested. If you are in any doubt as to whether or not you should disclose "dealings", you should contact an independent financial adviser authorised by the Financial Conduct Authority under the Financial Services and Markets Act 2000 (or, if you are resident in a jurisdiction other than the United Kingdom, a financial adviser authorised under the laws of such jurisdiction). The guidance set out below follows the requirements of Rule 8 of the Code.

Any person who is "interested" in one per cent. or more of any class of "relevant securities" of SQS or of any "securities exchange offeror" (being any "offeror" other than an "offeror" in respect of which it has been announced that its "offer" is, or is likely to be, solely in "cash") is requested to make an "Opening Position Disclosure" following the commencement of the Offer Period which begins upon the release of this announcement.

An "Opening Position Disclosure" should contain details of the person's "interests" and short positions in, and rights to subscribe for, any "relevant securities" of each of (i) SQS and (ii) any "securities exchange offeror(s)". Persons requested to make an "Opening Position Disclosure" are requested to make such "Opening Position Disclosure" by no later than 3:30 p.m. on the tenth "business day" following the release of this announcement. Relevant persons who undertake "dealings" in the relevant securities of SQS or a "securities exchange offeror" prior to the deadline for making an "Opening Position Disclosure" are requested instead to make a "Dealing Disclosure".

If any person is, or becomes "interested" (directly or indirectly) in one per cent. or more of any class of "relevant securities" of an "offeree" or of any "securities exchange offeror", all "dealings" in any "relevant securities" of that "offeree" or of any "securities exchange offeror" (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") should be publicly disclosed in a "Dealing Disclosure" by no later than 3:30 p.m. on the "business day" following the date of the relevant transaction. These requested disclosures should continue until the date on which any "offer" becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the Offer Period otherwise ends. A "Dealing Disclosure" should contain details of the "dealing" concerned and of the person's interests and short positions in, and rights to subscribe for, any "relevant securities" of (i) SQS and (ii) any "securities exchange offeror", save to the extent that these details have previously been disclosed.

Accordingly, in the case of both an "Opening Position Disclosure" and any "Dealing Disclosure", disclosures of interests in the shares of SQS are requested to be made.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of SQS or a "securities exchange offeror", they should be regarded to be a single person for these purposes.

"Opening Position Disclosures" will be made by SQS and by any "offeror", and all "dealings" in "relevant securities" of SQS by SQS, by any "offeror" or by any persons "acting in concert" with any of them, will be disclosed in a "dealing disclosure" by no later than 12 noon on the "business day" following the date of the relevant transaction.

"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of "securities". In particular, a person will be treated as having an "interest" by virtue of the ownership or control of "securities", or by virtue of any option in respect of, or derivative referenced to, "securities".

Terms in quotation marks are defined in the Code, which can be found on the website of the UK Panel on Takeovers and Mergers. If you are in any doubt as to whether the request to disclose a "dealing" by reference to the above applies to you, you should contact an independent financial adviser authorised by the Financial Conduct Authority under the Financial Services and Markets Act 2000 (as amended).

Purchases outside the Offer

Bidco or its nominees or brokers (acting as agents) may purchase SQS Shares otherwise than under the Offer, such as in the open market or through privately negotiated purchases. Such purchases shall comply with the terms of the Framework Agreement and, if applicable, the AIM Rules.

Publication on websites and availability of hard copies

A copy of this announcement will, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, be available free of charge for inspection on SQS's website at www.sqs.com/en/offer.php by no later than 12 noon on the Business Day following this announcement. For the avoidance of doubt, the contents of the websites referred to in this announcement are not incorporated into, and do not form part of, this announcement.

You may request a hard copy of this document by contacting Computershare Investor Services PLC, on 0370 707 1312 if calling from within the United Kingdom or +44 (0) 370 707 1312 if calling from outside the United Kingdom, or by submitting a request in writing to Computershare Investor Services PLC, The Pavilions, Bridgwater, Bristol, BS13 8AE, United Kingdom. Lines are open 8.30 a.m. to 5.30 p.m. Monday to Friday. Calls to the helpline from within the United Kingdom will be charged at your network provider's standard rate. Calls to the helpline from outside the United Kingdom will be charged at the applicable international rate. You may also request that all future documents, announcements and information to be sent to you in relation to the Offer should be in hard copy form.

Information relating to SQS Shareholders

Please be aware that addresses, electronic addresses and certain other information provided by SQS Shareholders, persons with information rights and other relevant persons for the receipt of communications from SQS may be provided to Bidco during the Offer Period.

Rounding

Certain figures included in this announcement have been subject to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetical aggregation of the figures that precede them.

Time

All times shown in this announcement are London times, unless otherwise stated.

DISCLOSURE OF INSIDE INFORMATION PURSUANT TO ARTICLE 17 OF THE EU MARKET ABUSE REGULATION (EU 596/2014, MAR)

THIS ANNOUNCEMENT AND THE INFORMATION HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL

FOR IMMEDIATE RELEASE

15 December 2017

RECOMMED CASH OFFER

for

SQS SOFTWARE QUALITY SYSTEMS AG

by

WEILCHENSEE 884. V V GmbH

(to be renamed Assystem Services Deutschland GmbH)

   1.             Introduction 

Bidco and SQS are pleased to announce that they have reached agreement on the terms of a recommended all cash offer to be made by Weilchensee 884. V V GmbH ("Bidco") for the entire issued and to be issued share capital of SQS Software Quality Systems AG ("SQS" or the "Company") not already owned, or agreed to be acquired, by Bidco.

Bidco is a newly incorporated German company acquired by Assystem Technologies SAS ("Assystem Technologies") for the purpose of making and implementing the Offer. Further details in relation to Assystem Technologies and Bidco are set out in paragraph 10 of this announcement.

   2.             The Offer 

Under the terms of the Offer, which is subject to the Conditions and certain further terms set out in Appendix 1 to this announcement and to the full terms and conditions to be set out in the Offer Document and, in respect of SQS Shares held directly in registered form, the Form of Acceptance, SQS Shareholders who accept the Offer will be entitled to receive:

 
            for each SQS Share:   825 pence in cash 
 

The Offer values the entire issued and to be issued share capital of SQS at approximately GBP281.3 million on a fully diluted basis and represents a premium of approximately:

-- 56.4 per cent. to the Closing Price per SQS Share of 527.5 pence on 14 December 2017, being the last Business Day prior to the date of this announcement;

-- 53.0 per cent. to the volume weighted average Closing Price per SQS Share of 539.1 pence in the six months to 14 December 2017, being the last Business Day prior to the date of this announcement; and

   --      31.5 per cent. to the highest ever Closing Price per SQS Share of 627.5 pence in May 2015. 

The SQS Shares will be acquired pursuant to the Offer fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other third-party rights and interests of any nature whatsoever and together with all rights now and hereafter attaching thereto, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of this announcement. Bidco reserves the right to reduce the Offer consideration by the amount of any dividend (or other distribution) which is paid or made or becomes payable or liable to be made by SQS to SQS Shareholders after the date of this announcement.

The Offer Price for each outstanding SQS Share validly tendered (and not validly withdrawn) in accordance with the terms and conditions of the Offer will be payable in Sterling. Any fees, commissions, expenses or any other costs incurred by a SQS Shareholder in connection with any currency conversion arising from settlement of the consideration to which any SQS Shareholder is entitled will be borne by that respective SQS Shareholder.

The Offer Document, containing further information about the Offer, together with the Form of Acceptance (in respect of SQS Shares held directly in registered form), will be sent to the SQS Shareholders in due course and will be made available by SQS on its website at www.sqs.com/en/offer.php.

   3.             Irrevocable undertakings and letters of intent 

Bidco has received irrevocable undertakings from:

-- all of the SQS Managing Directors and all of the SQS Supervisory Board Members who beneficially own SQS Shares and/or hold SQS Stock Options to: (a) accept, or procure acceptances of, the Offer in respect of (i) their own and their close relatives' beneficial holdings in SQS amounting to, in aggregate, 4,126,049 SQS Shares, representing approximately 12.7 per cent. of the existing issued share capital of SQS and (ii) where relevant, any further SQS Shares which are allotted, issued or transferred to them to satisfy the exercise of any SQS Stock Options; and (b) where relevant, accept the cash cancellation offer under the Stock Option Proposals in respect of any SQS Stock Options held by them; and

-- Rudolf van Megen, Herald Investment Management Limited and Marlborough Fund Managers Limited to accept, or procure acceptances of, the Offer in respect of a total of 7,104,868 SQS Shares, representing, in aggregate, approximately 21.9 per cent. of the existing issued share capital of SQS.

All of these irrevocable undertakings will cease to be binding if the Offer terminates or lapses in accordance with its terms or otherwise becomes incapable of ever becoming effective. In addition, the irrevocable undertakings from Rudolf Van Megen, Herald Investment Management and Marlborough Fund Managers Limited will cease to be binding in certain additional circumstances as set out in Appendix 3 to this announcement.

In addition, Bidco has also received non-binding letters of intent from Octopus Investments Ltd, Brooks Macdonald Asset Management Limited, Rock (Nominees) Limited, Miton Asset Management Limited, J O Hambro Capital Management Limited and Schroder Investment Management Limited to accept, or procure acceptances of, the Offer in respect of a total of 10,172,543 SQS Shares, representing, in aggregate, approximately 31.4 per cent. of SQS's existing issued share capital.

See Appendix 3 for further information in relation to these irrevocable undertakings and letters of intent.

Accordingly, as at the date of this announcement, Bidco has received irrevocable undertakings and letters of intent to accept or procure the acceptance of, the Offer in respect of, in aggregate, 21,403,460 SQS Shares, representing approximately 66.0 per cent. of the existing issued share capital of SQS.

   4.             Application of the Code and the German Takeover Act 

SQS is a German registered company whose shares are traded on AIM. It is, therefore, not subject to the Code. Accordingly the Code does not apply to the Offer by Bidco for SQS and this transaction is not subject to the jurisdiction of, or regulated by, the UK Panel on Takeovers and Mergers. However, SQS and Bidco have agreed, to the extent and subject as set out in the Framework Agreement, that they will conduct themselves and the Offer as if the Offer were subject to the Code. Further details are set out in paragraph 20 of this announcement.

The German Takeover Act (Wertpapiererwerbs- und Übernahmegesetz) ("WpÜG") does not apply to the Offer as the SQS Shares are not traded on an organised market pursuant to Section 1 paragraph 1 of the WpÜG.

   5.             Background to the Offer 

Assystem Technologies is one of the European leaders in the externalised research and development market with approximately EUR578 million of sales reported in 2016, specialising in outsourced research and development for industrial clients operating in a number of sectors.

Assystem Technologies is controlled by Ardian LBO Fund VI B, the leveraged buyout arm of Ardian Group, a world-leading private investment house with assets of approximately US$62 billion managed or advised. Ardian Group has more than 470 employees working from twelve offices across Europe, North America and Asia. Ardian Group manages funds on behalf of its clients through five pillars of investment expertise: funds of funds, direct fund, infrastructure, real estate and private debt.

Ardian France's mid cap buyout team has extensive experience in transformational strategies gained from executing over 67 transactions over the past 19 years and provides the financial support of a leading private equity house. The Ardian LBO Fund VI B has a total commitment of EUR4 billion and benefits from having sufficient time to develop SQS's potential as its fund termination date is in 2026.

In late September 2017, Assystem Technologies commenced preliminary discussions with members of the SQS Boards about a possible transaction. In October 2017, Assystem Technologies communicated a preliminary indication of interest to acquire the entire issued and to be issued share capital of SQS, following which, Ardian France (acting in its capacity as management company of Ardian LBO Fund VI B), Assystem Technologies and SQS entered into the Confidentiality Agreement. Having carried out a limited preliminary review on SQS on the basis of publicly available data and a meeting with representatives of SQS, Ardian France (acting in its capacity as management company of Ardian LBO Fund VI B) and Assystem Technologies submitted a non-binding letter of intent on 8 November 2017, setting out indicative terms of a possible offer to acquire the entire issued and to be issued share capital of SQS subject to certain assumptions and conditions.

Following the execution of the Letter of Intent on 9 November 2017, Assystem Technologies, with the consent of the SQS Supervisory Board, entered into discussions with SQS's management and engaged in a more detailed limited due diligence exercise. Having completed its limited due diligence review, Assystem Technologies confirmed its intention to proceed with the proposed acquisition of SQS.

Assystem Technologies believes there is strong rationale for the making of the Offer. After evaluating SQS's operations and financial performance, Assystem Technologies' initial interest was confirmed by the quality of SQS's business model and market positions, as well as the quality and dynamism of its senior team in the highly competitive software/systems testing quality assurance services market.

The proposed combination of SQS and Assystem Technologies is expected to create an Enlarged Group with combined revenues of approximately EUR1 billion, with an enhanced presence in the major European economies, particularly in Germany, France, the United Kingdom, Ireland, Italy, Sweden and Switzerland, as well as in the United States and in India. The enlarged business will combine SQS's expertise in quality assurance and process consulting in the digital world, with Assystem Technologies' breadth of engineering product design capabilities, positioning the Enlarged Group to leverage the convergence of the digital and physical worlds to offer holistic quality assurance of both products and processes to its enterprise customer base across a range of complementary geographies and end markets. In end markets as diverse as banking, finance and insurance, and automotive, aerospace and defence, the customers of both SQS and Assystem Technologies are increasingly seeking to use smarter, more automated processes to boost operational efficiency, meet evolving regulatory standards and remain competitive. It is expected that the executive management of SQS will take up senior leadership positions within the Enlarged Group, alongside the executive team of Assystem Technologies. In particular, Diederik Vos has agreed to become Deputy CEO of the Enlarged Group.

Assystem Technologies believes that the potential revenue synergies available from combining SQS with Assystem Technologies, as well as some limited integration benefits, are fairly reflected in the significant cash premium which the Offer represents.

   6.             Current trading 

On 13 September 2017, SQS released its Interim Results for the six month period ended 30 June 2017, a copy of which can be found at www.sqs.com. Since 30 June 2017, SQS has continued to trade in line with its expectations.

   7.             Background to, and reasons, for the recommendation 

Founded in 1982 by Heinz Bons and Rudolf van Megen, SQS has become one of the leading strategic quality partners for digital business. Building on its strength as the largest independent quality assurance specialist, SQS is now entirely focused on helping organisations manage their business and technology risks to achieve fit-for purpose business outcomes.

Since its admission to trading on AIM, SQS has delivered significant value to the SQS Shareholders. SQS's operating and financial performance over this time has resulted in substantial capital growth for SQS Shareholders, and allowed the SQS Boards to adopt a consistent and progressive dividend policy.

In the results for the six months ended 30 June 2017, the SQS Management Board stated that SQS had demonstrated progress in implementing the Company's medium term strategy to help customers migrate towards a more digital focused business model, evidenced by solid gross margin and EBIT growth.

The SQS Boards remain of the view that SQS has solid long-term prospects. However, the Offer represents a significant cash premium to the prevailing share price for the benefit of SQS Shareholders, and furthermore the potential for a combination with Assystem Technologies, with the backing of controlling shareholder Ardian LBO Fund VI B, provides enhanced scale and opportunity for the benefit of SQS's staff and customers.

The Offer Price represents a premium of approximately 56.4 per cent. to the Closing Price per SQS Share of 527.5 pence on 14 December 2017, and 53.0 per cent. to the volume weighted average Closing Price per SQS Share of 539.1 pence in the six months to 14 December 2017, (14 December 2017 being the last Business Day prior to the date of this announcement) and 31.5 per cent. to the highest ever Closing Price per SQS Share of 627.5 pence in May 2015. The SQS Boards believe that, taking into account SQS's current share price and historic trading multiples the Offer reflects an attractive valuation for SQS.

   8.             Recommendation 

The SQS Supervisory Board and the SQS Management Board, who have been so advised by Numis as to the financial terms of the Offer, each considers the terms of the Offer to be fair and reasonable. In providing advice to the SQS Boards, Numis has taken into account the commercial assessments of the SQS Managing Directors and the SQS Supervisory Board Members.

The SQS Boards believe that the Offer is in the best interests of SQS, the SQS Shareholders, employees and clients and accordingly, the SQS Management Board and the SQS Supervisory Board each intends to recommend unanimously that SQS Shareholders accept the Offer, as all of the SQS Managing Directors and all of the SQS Supervisory Board Members who hold SQS Shares have irrevocably undertaken to do, or procure to be done, in respect of their own and their close relatives' beneficial holdings of, in aggregate, 4,126,049 SQS Shares, representing approximately 12.7 per cent. of the existing issued share capital of SQS.

As set out in paragraph 13 below, Numis has also confirmed to the SQS Supervisory Board that, in its opinion, the terms of the Management Arrangements are fair and reasonable.

   9.             Information relating to SQS 

SQS is one of the leading independent providers of end-to-end software quality assurance services and reported EUR327 million of sales in 2016. These services are focused on mitigating and managing any technological and commercial risks that might arise through the course of the software development lifecycle. They encompass management consulting, quality assurance services for digital business, software testing, managed services and software testing tools and technologies.

SQS provides its services to over 500 clients, across 25 countries, and through 4,500 employees. Since inception over 30 years ago, SQS has delivered over 10,000 projects into a customer base that is predominately drawn from six key industries: Banking & Financial Services, Insurance, Energy & Utilities, Retail & Logistics, Telecommunications and Automotive & Manufacturing; and includes 20 FTSE-100 companies, half of the DAX 30 companies and nearly a third of the STOXX-50 companies.

   10.          Information relating to Assystem Technologies and Bidco 

Assystem Technologies

Assystem Technologies is one of the European leaders in the externalised research and development market, specialising in outsourced research and development for industrial clients operating in a number of sectors, with the ability to address both process design and project management. Assystem Technologies reported approximately EUR578 million of sales in 2016 and is among the leading pan-European players in outsourced research and development and one of the top 5 in France. Assystem Technologies is a wholly-owned subsidiary of Assystem Technologies Services which in turn is a wholly-owned subsidiary of Assystem Technologies Groupe. Assystem Technologies Groupe is controlled by Ardian LBO Fund VI B, the leveraged buyout arm of Ardian Group, a world-leading private investment house with assets of approximately US$62 billion managed or advised.

Bidco

Bidco is a limited liability company (Gesellschaft mit beschränkter Haftung) incorporated in Germany on 28 September 2017 under the German Limited Liability Companies Act (Gesetz betreffend die Gesellschaften mit beschränkter Haftung) and registered with the commercial register of the district court (Amtsgericht) of Munich with registered number HRB 236229. Bidco was acquired by Assystem Technologies on 1 December 2017. On 1 December 2017, Bidco passed a notarised shareholder's resolution to change its name to Assystem Services Deutschland GmbH, this amendment was filed for registration with the competent commercial register of the local court in Munich on 12 December 2017 and will become effective upon the registration with the commercial register. Bidco has its registered office at c/o Erwin-von-Kreibigstr. 3, 80807 München, Germany. The managing director (Geschäftsführer) of Bidco is Olivier Aldrin.

Bidco is owned and controlled by Assystem Technologies and has been acquired by Assystem Technologies for the purpose of making and implementing the Offer.

Bidco's proposed principal investment is the proposed acquisition of SQS Shares pursuant to the Offer or otherwise. Save for activities in connection with the making, implementation and financing of the Offer, Bidco has not carried on any business prior to the date of this announcement, nor has it entered into any obligations. Bidco has no material assets or liabilities other than those described in this announcement, and Bidco has not paid any dividends or prepared any historical financial accounts.

In the event that the Offer becomes, or is declared, unconditional in all respects, SQS will be the only direct subsidiary of Bidco and the SQS Group will therefore represent all or substantially all of the earnings, assets and liabilities of Bidco, save for the liabilities incurred in connection with the Offer.

   11.          Financing arrangements of Bidco and the AT Group 

Equity Commitment Letter

On 13 December 2017, Ardian LBO Fund VI B represented by its management company Ardian France entered into an equity commitment letter (the "Equity Commitment Letter") pursuant to which Ardian LBO Fund VI B has committed to provide indirect shareholder financing to Bidco on the terms and subject to the conditions set out in the Equity Commitment Letter. Under the terms of the Equity Commitment Letter, Ardian LBO Fund VI B will provide equity and debt financing up to the amount of the consideration payable under the Offer which is not being financed under the Additional Senior Facility 1, in order that Bidco can be provided with the funds necessary for the Offer (in addition to those provided under the Additional Senior Facility 1). Ardian LBO Fund VI B will satisfy its obligations under the Equity Commitment Letter from existing capital commitments.

Debt financing

On 14 December 2017, Assystem Technologies Services entered into an additional facility notice as Borrower and Obligors' Agent, with Crédit Agricole Corporate Investment Bank, HSBC Bank plc, Natixis and Société Générale as Senior Lenders (as those terms are defined therein) (the "Additional Facility 1 Notice"), which was issued pursuant to the provisions of an existing senior facilities agreement dated 28 September 2017 entered into between, inter alios, Assystem Technologies Services as Borrower and Guarantor, Crédit Agricole Corporate and Investment Bank, HSBC plc, Natixis and Société Générale as Senior Mandated Lead Arrangers, the Original Senior Lenders listed therein (as those terms are defined therein) and Société Générale as Senior Facility Agent and Senior Security Agent (the "Senior Facilities Agreement").

Under the terms of the Additional Facility 1 Notice, the Senior Lenders agreed to make available to Assystem Technologies Services an additional senior facility in an aggregate maximum principal amount of EUR206,100,000 (the "Additional Senior Facility 1"). Assystem Technologies Services has agreed to make available and advance all of the amounts drawn under the Additional Senior Facility 1 to Bidco by way of an intercompany loan on terms which mirror, in so far as is appropriate, the terms of the Additional Facility Notice, subject to a margin adjustment on an arm's length basis to be determined but in any case not to be higher than 25 per cent. The proceeds of the intercompany loan are to be applied by Bidco, among other things, towards financing the consideration for the SQS Shares.

Subject to satisfaction of limited conditions precedent set out in the Additional Facility 1 Notice, the Additional Senior Facility 1 is available to be drawn during the Agreed Certain Funds Period (as defined in the Additional Facility 1 Notice).

The final maturity date of the Additional Senior Facility 1 is 28 September 2024. Assystem Technologies Services may also voluntarily cancel and prepay the Additional Senior Facility 1 at any time.

The Additional Senior Facility 1 is subject to customary representations and warranties, affirmative and negative undertakings (including Offer related undertakings) and events of default, each with appropriate carve-outs and materiality thresholds but no maintenance financial covenant applies to it.

The rate of interest payable on each loan drawn under the Additional Senior Facility 1 is 4.75 per cent. plus Euro InterBank Offered Rate.

As a condition precedent to the first drawdown of the Additional Senior Facility 1, the secured parties under the Additional Facility 1 Notice would receive the benefit of security including:

(a) a French law second ranking financial securities account pledge agreement relating to 100 per cent. of the share capital and voting rights and other securities of Assystem Technologies Services held by Assystem Technologies Groupe, and the related statement of second ranking pledge;

(b) a French law second ranking financial securities account pledge agreement relating to 100 per cent. of the share capital and voting rights and other securities of Assystem Technologies held by Assystem Technologies Services, and the related statement of second ranking pledge;

(c) a French law second ranking pledge over Assystem Technologies Services' bank accounts located in France; and

(d) a French law second ranking pledge over Assystem Technologies Services' intra-group receivables.

   12.          Management, employees and locations 

Bidco attaches great importance to the skills, expertise and knowledge of the existing management and employees of SQS and expects them to play a leading role in growing its business. If the Offer is declared unconditional in all respects, Bidco intends to build on the successful investment in the business made by the existing management team.

Following completion of the Offer, Bidco will perform a detailed review of how best to integrate SQS into the AT Group. Bidco believes that there may be potential to generate synergies with the SQS Group in certain areas. However, at this stage Bidco has not yet developed any proposals as to how such integration would be implemented and will only do so following completion of the Offer.

Bidco confirms that if the Offer is declared unconditional in all respects, the existing contractual and statutory employment rights of SQS's employees shall be observed and pension obligations complied with, in each case in accordance with applicable law. Subject to completion of the detailed review by Bidco, Bidco's current plans for SQS do not involve any material change in the continued employment and conditions of employment of SQS's employees or to the locations of SQS's business or to the fixed assets of SQS, as a result of the Offer.

It is intended that only those members of the SQS Supervisory Board who are elected by SQS Shareholders will cease to be members of the SQS Supervisory Board on the Offer becoming, or being declared, unconditional in all respects, or shortly thereafter.

   13.          Management Arrangements 

Bidco believes that the ongoing participation of the senior management of SQS in the Enlarged Group is a very important element in growing its business. Accordingly, Bidco and Assystem Technologies Groupe intend to put in place certain incentive arrangements for the senior management of the SQS Group with effect from and/or following completion of the Offer.

Diederik Vos, René Gawron and Ralph Gillessen (the "Senior Management Subscribers") currently have interests in SQS Shares and SQS Stock Options that in aggregate represent respectively 1.6 per cent., 1.1 per cent. and 0.8 per cent. of the fully-diluted issued share capital of SQS. The Senior Management Subscribers will re-invest in Assystem Technologies Groupe approximately EUR1.85 million in aggregate of their net proceeds of the Offer after tax (comprising approximately EUR0.9 million to be re-invested by Diederik Vos, approximately EUR0.55 million by René Gawron and approximately EUR0.4 million by Ralph Gillessen). Such reinvestment will be on terms substantially equivalent to the incentive arrangements previously entered into with senior management of Assystem Technologies on its acquisition by Assystem Technologies Services, a company wholly owned by Assystem Technologies Groupe. Under the terms of the reinvestment, the Senior Management Subscribers would be entitled to:

-- ordinary shares in aggregate representing approximately 0.3 per cent. of the fully-diluted ordinary share capital of Assystem Technologies Groupe following completion of the Offer;

-- approximately EUR0.3 million in preference shares, which carry interest at a fixed rate of 9 per cent.; and

-- participation in a performance based ratchet, such that the Senior Management Subscribers benefit from value representing an agreed proportion of Ardian LBO Fund VI B and Assystem SA's aggregated investment returns on an exit of Assystem Technologies Groupe above specified hurdle rates, measured with respect to threshold IRRs and money multiples. Each hurdle calculation is tested separately and, assuming the SQS reinvestment was subscribed in full, provides between 0 to 14 per cent. of the value generated above the respective hurdle to ratchet participants in aggregate. No ratchet accrues if on an exit the aggregated net return to Ardian LBO Fund VI B and Assystem SA is below an internal rate of return of 13 per cent. per annum or the money multiple below approximately 1.7 times their aggregate investment in Assystem Technologies Groupe.

Martin Hodgson has no interest in SQS Shares or SQS Stock Options however he and certain other senior managers of SQS will be given the opportunity to invest on the same terms, subject to a maximum aggregate reinvestment under the management arrangements of EUR3.6 million. This maximum aggregate reinvestment represents 37.5 per cent. of the maximum aggregate reinvestment of the senior managers of the Enlarged Group, which is broadly proportionate to SQS's value within the Enlarged Group.

In each case the equity and preference share instruments and the ratchet shares rank pari passu with the equivalent instruments in Assystem Technologies Groupe held by Ardian LBO Fund VI B and the senior management of Assystem Technologies. They are subject to straight line vesting over a four year period and leaver provisions.

Each of Diederik Vos, René Gawron, Ralph Gillessen and Martin Hodgson has agreed to enter into new service agreements with SQS with base salaries increased by 5 per cent. respectively and with broadly equivalent increases to their performance-based variable salaries. The contracts each have a fixed term of three years, with further payments broadly reflective of the current unexpired terms of their existing service agreements becoming due should SQS not renew the new contracts on their respective expiry.

Numis has confirmed that, in its opinion, the terms of the Management Arrangements are fair and reasonable so far as SQS Shareholders are concerned.

   14.          SQS Stock Option Plans 

The Offer also extends to any SQS Shares which are unconditionally allotted or issued and fully paid (or legally deemed as being fully paid up) on or before the date on which the Offer closes as to acceptances including any such SQS Shares allotted or issued pursuant to the exercise of existing SQS Stock Options granted under the SQS Stock Option Plans.

SQS Stock Option Participants will be contacted regarding the effect of the Offer on their rights under the SQS Stock Option Plans and appropriate proposals (which will include a cash cancellation offer to holders of SQS Stock Options on the same economic terms as the Offer, whether or not such SQS Stock Options are vested and capable of exercise) will be made to such participants in due course.

   15.          Financing of the Offer 

The consideration payable under the Offer will be provided by Bidco from the indirect proceeds of the Equity Commitment Letter and the drawdown under the Additional Senior Facility 1, in each case, as referred to in paragraph 11 of this announcement.

Rothschild, financial adviser to Assystem Technologies and Bidco, is satisfied that sufficient cash resources are available to Bidco, formed by, or on behalf of Assystem Technologies, to satisfy full acceptance of the Offer.

The statement made by Rothschild in the paragraph above is given solely with regard to UK market practices followed by financial advisers when providing a cash confirmation pursuant to Rules 2.7(d) and 24.8 of the Code for transactions governed by the Code and without regard to any other laws, rules or regulations.

   16.          Opening Position Disclosure 

Except for the irrevocable undertakings referred to in paragraph 3 of this announcement, as at close of business on 14 December 2017 (being the last Business Day prior to the date of this announcement), neither Bidco, nor the managing director of Bidco, nor, so far as the managing director of Bidco is aware, any person acting in concert with Bidco for the purposes of the Offer, had any interest in, right to subscribe for, or had borrowed or lent any SQS Shares or securities convertible or exchangeable into SQS Shares, nor did any such person have any short position (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to take delivery, or any dealing arrangement, in relation to SQS Shares or in relation to any securities convertible or exchangeable into SQS Shares.

In the interests of maintaining secrecy prior to the publication of this announcement, Bidco has not made any enquiries in respect of the matters referred to in this paragraph of certain parties who may be deemed to be acting in concert with it for the purposes of the Offer. Enquiries of such parties will be completed as soon as practicable following the making of this announcement and further disclosures, if any, required in respect of such parties will be made as soon as possible.

   17.          Further terms and conditions of the Offer 

The Offer will be subject to the Conditions and certain further terms set out in this announcement and to the full terms and conditions to be set out in the Offer Document and, in respect of SQS Shares held directly in registered form, the Form of Acceptance.

Appendix 1 contains the conditions and certain further terms of the Offer. Appendix 2 describes the bases and sources of certain information contained in this announcement. Appendix 3 contains details of irrevocable undertakings and letters of intent received by Bidco. Appendix 4 contains the definitions of certain terms used in this announcement.

The Offer will be governed by English law (and in respect of the transfer of the legal title of SQS Shares, German law). SQS and Bidco have agreed, to the extent and subject as set out in the Framework Agreement, that they will conduct themselves and the Offer as if the Offer were subject to the Code. The Offer will also be subject to the applicable requirements of the AIM Rules. The German Takeover Act (WpÜG) does not apply to the Offer as the SQS Shares are not traded on an organised market pursuant to Section 1 paragraph 1 of the WpÜG.

   18.          Cancellation of trading of SQS Shares and squeeze-out 

If the Offer becomes, or is declared, unconditional in all respects and valid acceptances of the Offer are received which, when taken together with any other SQS Shares acquired by Bidco (whether pursuant to the Offer or otherwise), will result in Bidco holding 75 per cent. or more of the SQS Shares and of the voting rights normally exercisable at a general meeting of SQS (assuming exercise of all SQS Stock Options which are outstanding at that time which are not the subject of valid acceptances of the Stock Option Proposals), Bidco intends to procure that SQS will make an application to the London Stock Exchange for the cancellation of the admission to trading on AIM of the SQS Shares. If such an application is made, it is expected that such cancellation of admission to trading on AIM will take effect no earlier than 20 Business Days after the date on which Bidco (together with those acting in concert with it) have, by virtue of their shareholdings and acceptances of the Offer, acquired, or agreed to acquire, 75 per cent. or more of the SQS Shares and of the voting rights normally exercisable at a general meeting of SQS. Bidco will procure that SQS makes an announcement through a Regulatory Information Service when the necessary 75 per cent. threshold has been reached confirming that the notice period has commenced and the anticipated date of cancellation of the admission to trading on AIM of the SQS Shares.

Bidco also intends to procure that SQS will make an application to the Frankfurt Stock Exchange for the cancellation of inclusion of SQS Shares in the Open Market of Deutsche Börse. If such an application is made, it is expected that such cancellation of inclusion of SQS Shares in the Open Market of Deutsche Börse will take effect no earlier than 3 months after the date on which the application is made. Bidco will procure that SQS makes an announcement through a Regulatory Information Service confirming that the notice period has commenced and the anticipated date of cancellation of inclusion of SQS Shares in the Open Market of Deutsche Börse.

Cancellation of admission to trading on AIM of SQS Shares and to the inclusion of SQS Shares in the Open Market of Deutsche Börse is likely to reduce significantly the liquidity and marketability of any SQS Shares in respect of which the Offer has not been accepted at such time.

If the Offer becomes, or is declared, unconditional in all respects and Bidco receives valid acceptances of the Offer in respect of SQS Shares which, when taken together with any other SQS Shares acquired by Bidco (whether pursuant to the Offer or otherwise), represent not less than 75 per cent. but less than 90 per cent. of the SQS Shares and of the voting rights normally exercisable at a general meeting of SQS (assuming exercise of all SQS Stock Options which are outstanding at that time which are not the subject of valid acceptances of the Stock Option Proposals), Bidco will consider concluding with SQS a profit and loss transfer agreement and, at Bidco's option, a domination agreement in order to create a tax unity between Bidco and SQS.

If the Offer becomes, or is declared, unconditional in all respects and Bidco receives valid acceptances of the Offer in respect of SQS Shares which, when taken together with any other SQS Shares acquired by Bidco (whether pursuant to the Offer or otherwise), represent not less than 90 per cent. but less than 95 per cent. of the SQS Shares and of the voting rights normally exercisable at a general meeting of SQS (assuming exercise of all SQS Stock Options which are outstanding and exercisable at that time), Bidco will consider changing its legal form from a limited liability company (Gesellschaft mit beschränkter Haftung) into a stock corporation (Aktiengesellschaft) and, thereafter, Bidco will consider initiating a merger of SQS into Bidco combined with a compulsory acquisition proceeding pursuant to Section 62 paragraph 5 of the German Transformation Act (Umwandlungsgesetz) to acquire compulsorily, with cash compensation comparable to the Offer Price, the remaining SQS Shares in respect of which the Offer has not at such time been accepted, whether or not the Offer remains open for acceptance by SQS Shareholders. SQS Shareholders should consider that the compensation payable for each SQS Share in this case might be equal to, higher than or lower than the Offer Price.

If the Offer becomes, or is declared, unconditional in all respects and Bidco receives valid acceptances of the Offer in respect of SQS Shares which, when taken together with any other SQS Shares acquired by Bidco (whether pursuant to the Offer or otherwise), represent not less than 95 per cent. of the SQS Shares and of the voting rights normally exercisable at a general meeting of SQS (assuming exercise of all SQS Stock Options which are outstanding and exercisable at that time), Bidco will consider initiating a compulsory acquisition proceeding pursuant to Sections 327a ff. of the German Stock Corporation Act (Aktiengesetz) to acquire compulsorily, with cash compensation comparable to the Offer Price, the remaining SQS Shares in respect of which the Offer has not at such time been accepted, whether or not the Offer remains open for acceptance by SQS Shareholders. SQS Shareholders should consider that the compensation payable for each SQS Share in this case might be equal to, higher than or lower than the Offer Price. Following consummation of the Offer in these circumstances, Bidco will decide whether to change SQS's legal form from a stock corporation (Aktiengesellschaft) into a limited liability company (Gesellschaft mit beschränkter Haftung).

   19.          Overseas Shareholders 

The availability of the Offer to SQS Shareholders who are not resident in the United Kingdom or Germany may be affected by the laws and/or regulations of their relevant jurisdiction. Therefore, any persons who are subject to the laws and/or regulations of any jurisdiction other than the United Kingdom or Germany should inform themselves about and observe any applicable legal or regulatory requirements in their jurisdiction. If you are in any doubt, you should consult your professional adviser in the relevant jurisdiction without delay.

   20.          Offer-related arrangements 

Confidentiality Agreement

Ardian LBO Fund VI B represented by its management company Ardian France and Assystem Technologies are parties to a confidentiality agreement dated 30 October 2017 with SQS in a customary form, pursuant to which, among other things, Ardian LBO Fund VI B and Assystem Technologies undertook, subject to certain exceptions:

-- to keep information relating to SQS confidential and not disclose it to third parties (other than those specifically permitted within the agreement) for a period of two years from the date of the agreement; and

-- not to acquire any interest in the securities of SQS for a period of 12 months from the date of the Confidentiality Agreement, such obligation to terminate on the making of this announcement.

Letter of Intent

Ardian LBO Fund VI B represented by its management company Ardian France, Assystem Technologies and SQS are parties to the Letter of Intent dated 9 November 2017, pursuant to which Ardian LBO Fund VI B and Assystem Technologies made a non-binding indicative offer in relation to the entire issued and to be issued share capital of SQS subject to certain assumptions and conditions. Under the terms of the Letter of Intent, if, following this announcement, either the SQS Management Board or the SQS Supervisory Board withdraws or adversely modifies its recommendation of the Offer, or recommends a competing offer to acquire all or any material portion of the issued share capital or assets of SQS, then, within fourteen days following the Offer lapsing, being withdrawn or not being made, SQS shall pay an amount (the "Break Fee Amount") to Ardian LBO Fund VI B and Assystem Technologies (and any of its affiliates) equal to the costs and expenses reasonably and properly incurred by them in connection with the due diligence investigations in relation to the SQS Group as well as all other work, analysis, discussions and negotiations carried out in view of the Offer (including, without limitation, the preparation and negotiation of the Offer, the Confidentiality Agreement, the Framework Agreement, the Offer and any related agreements, documents or process), including all external advisers' fees and expenses, however the parties have agreed that notwithstanding the amount of costs and expenses incurred by Ardian LBO Fund VI B and/or Assystem Technologies (or any of its affiliates) in respect of the Offer, in no circumstances shall the Break Fee Amount payable by SQS exceed GBP1,500,000.

Framework Agreement

On 13 December 2017, Bidco, Ardian LBO Fund VI B represented by its management company Ardian France, Assystem Technologies and SQS entered into the Framework Agreement. Under this agreement the parties have agreed, on the terms and subject as set out in the agreement, to conduct themselves and the Offer as if the Offer were subject to certain requirements of the Code, notwithstanding that the Code does not apply to the Offer. The Framework Agreement does not prevent the parties from agreeing to amend the Framework Agreement with respect to the Offer. The Framework Agreement also contains certain undertakings, assurances and confirmations among the parties, including with respect to the co-operation of the parties relating to the implementation of the Offer. Pursuant to the Framework Agreement, the parties have agreed to appoint a committee comprised of representatives appointed by each of Bidco and SQS, which will be responsible for determining how the Code (save to the extent the Code is agreed not to apply in relation to the Offer or the parties) would be interpreted and applied in relation to the Offer or the parties (a "Code Committee Matter"). The Framework Agreement also provides for referral of any matter relating to the interpretation and application of any Code Committee Matter to a Code Expert (as defined in the Framework Agreement), whose rulings (absent fraud or manifest error) are final and binding on the parties. Pursuant to the Framework Agreement, Bidco and SQS agree to co-operate and assist each other in obtaining the clearances required to satisfy the Conditions. The Framework Agreement terminates automatically (save in respect of certain surviving provisions) in certain circumstances including (a) upon agreement in writing between the parties thereto; (b) if the Offer lapses (or is withdrawn) in accordance with its terms (unless where such lapse or withdrawal is otherwise to be followed soon after by an announcement of a firm intention to make an offer made by Bidco or a person acting in concert with Bidco on substantially the same or improved terms); (c) if a competing offer is announced and the offeror in respect of such competing offer has not entered into an agreement with SQS to govern the competing offer in terms of compliance with the Code in connection with such competing offer; or the SQS Managing Directors and SQS Supervisory Board Members withdraw or adversely modify or qualify their recommendation and thereafter, in either case, Bidco gives written notice to SQS to terminate the Framework Agreement or SQS gives written notice to Bidco to terminate the Framework Agreement; or (d) if an independent competing transaction approved by the SQS Boards becomes or is declared

unconditional in all respects or is completed. If a competing offer is announced and the relevant offeror has entered into an agreement with SQS to govern that offer but on terms which are more favourable to the competing offeror, or more flexible in terms of compliance with the Code in connection with such competing offer, than the terms of the Framework Agreement ("Third Party Framework Agreement"), the Framework Agreement remains in force but Bidco shall be entitled to conduct the offer in the same manner as set out in the Third Party Framework Agreement.

   21.          Documents Available for Inspection 

Copies of the following documents will, by no later than 12 noon on the Business Day following the date of this announcement, be published on SQS's website at www.sqs.com/en/offer.php until the end of the Offer Period:

   (a)           the Confidentiality Agreement and the Framework Agreement; 
   (b)           the irrevocable undertakings and letters of intent referred to in paragraph 3 of this announcement; 
   (c)           consent letters from each of Rothschild, Stockdale Securities Limited and Numis; and 
   (d)           this announcement. 
   22.          Expected Timetable 

It is intended that the Offer Document and the Form of Acceptance containing further details of the Offer will be despatched to SQS Shareholders (other than to persons in Restricted Jurisdictions) as soon as practicable and, in any event, not later than 28 days after the date of this announcement (unless otherwise agreed with SQS).

   23.          General 

Your attention is drawn to the further information contained in the Appendices, which form part of, and should be read in conjunction with, this announcement.

Please be aware that addresses, electronic addresses and certain other information provided by SQS Shareholders, persons with information rights and other relevant persons for the receipt of communications from SQS may be provided to Bidco during the Offer Period.

Enquiries:

SQS Software Quality Systems AG Tel: +49 (0) 2203 91 540

Diederik Vos, Chief Executive Officer

René Gawron, Chief Financial Officer

Numis (Nominated Adviser, Financial Adviser and Joint Broker to SQS) Tel: +44 (0) 207 260 1000

Simon Willis

Jamie Lillywhite

Mark Lander

Stockdale Securities Limited (Joint Broker to SQS) Tel: +44 (0) 207 601 6100

Robert Finlay

Antonio Bossi

FTI Consulting (Financial Media and Investor Relations to SQS) Tel: +44 (0) 203 727 1000

Matt Dixon / Dwight Burden

Weilchensee 884. V V GmbH (to be renamed

Assystem Services Deutschland GmbH) Tel: +33 (0) 155 650 325

Olivier Aldrin, Managing Director

Rothschild (Financial Adviser to Assystem Technologies and Bidco) Tel: +44 (0) 207 280 5000

Alistair Allen

Stuart Vincent

Omaier Akhtar

Ricky Paul

Numis, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as nominated adviser, financial adviser and joint broker exclusively for SQS and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters referred to in this announcement and will not be responsible to anyone other than SQS for providing the protections afforded to clients of Numis, nor for providing advice in relation to the Offer or any other matter or arrangement referred to herein.

Stockdale Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as joint broker exclusively for SQS and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters referred to in this announcement and will not be responsible to anyone other than SQS for providing the protections afforded to clients of Stockdale Securities Limited, nor for providing advice in relation to the Offer or any other matter or arrangement referred to herein.

Rothschild, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser exclusively for Assystem Technologies and Bidco and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters referred to in this announcement and will not be responsible to anyone other than Assystem Technologies and Bidco for providing the protections afforded to clients of Rothschild, nor for providing advice in relation to the Offer or any other matter or arrangement referred to herein.

IMPORTANT NOTES

Further information

This announcement is for information purposes only. It is not intended to and does not constitute, or form part of, an offer or invitation or the solicitation of an offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities pursuant to the Offer or otherwise, nor shall there by any sale, issuance, or transfer of securities in any jurisdiction in contravention of applicable law.

The Offer will be made solely by means of the Offer Document and, in respect of SQS Shares held directly in registered form, the Form of Acceptance, which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted. Any decision in respect of, or other response to, the Offer should be made only on the basis of the information contained in those documents.

This announcement has been prepared for the purpose of complying with English and German law, where applicable, and the AIM Rules 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 jurisdictions outside of England and Wales and Germany.

Bidco will prepare the Offer Document and the Form of Acceptance to be distributed to the SQS Shareholders. SQS and Bidco urge the SQS Shareholders to read the Offer Document and the Form of Acceptance carefully when they become available because they will contain important information relating to the Offer.

The receipt of cash pursuant to the Offer by SQS Shareholders may be a taxable transaction under applicable national, state and local, as well as foreign and other, tax laws. Each SQS Shareholder is urged to consult their independent professional adviser regarding the tax consequences of accepting the Offer.

This announcement does not constitute a prospectus or prospectus equivalent document.

Overseas Shareholders

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law, and the availability of the Offer to persons who are residents, citizens or nationals of jurisdictions other than the United Kingdom or Germany may be restricted by laws and/or regulations of those jurisdictions. Therefore any persons who are subject to the laws and regulations of any jurisdiction other than the United Kingdom or Germany should inform themselves about and observe any applicable requirements in their jurisdiction. Any failure to comply with the applicable requirements may constitute a violation of the laws and/or regulations of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Offer disclaim any responsibility or liability for the violation of such requirements by any person.

Unless otherwise determined by Bidco and permitted by applicable law and regulation, the Offer will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may accept the Offer by any such use, means, instrumentality or from within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this announcement and all documentation relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction, and persons receiving this announcement and all documentation relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from any Restricted Jurisdiction.

Unless otherwise permitted by applicable law and regulation, the Offer may not be made, directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of, any Restricted Jurisdiction and the Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.

Notice to German investors

This announcement has not been prepared in accordance with the German Takeover Act (Wertpapiererwerbs- und Übernahmegesetz) ("WpÜG") as the WpÜG does not apply to the Offer.

Notice to US investors

The Offer is being made for securities in a German registered company whose shares are traded on AIM and on the Open Market of Deutsche Börse and SQS Shareholders in the United States should be aware that this announcement and documentation relating to the Offer have been, or will be, prepared in accordance with disclosure requirements, format and style that differ from those in the United States. All financial information that is included in this announcement or that may be included or referred to in any other documents relating to the Offer, have been, or will be, prepared, save where Bidco and SQS have expressly agreed otherwise, in accordance with International Financial Reporting Standards adopted by the European Union and therefore may not be comparable to financial statements of US companies or companies whose financial statements are prepared in accordance with US GAAP.

The Offer, if required to be made, will be made in the United States pursuant to applicable exemptions under the US tender offer rules and securities laws and otherwise in accordance with the applicable provisions of English and German law. Accordingly, the Offer will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments that are different from those applicable under US domestic tender offer procedures and law.

Both SQS and Bidco are companies registered under the laws of Germany. It may not be possible for SQS Shareholders in the United States to effect service of process within the United States upon SQS or Bidco or their respective officers or directors or to enforce against any of them judgments of the United States predicated upon the civil liability provisions of the federal securities laws of the United States. It may not be possible to sue SQS or Bidco or their respective officers or directors in a non-US court for violations of the US securities laws. There is also substantial doubt as to enforceability in the United Kingdom in original actions, or in actions for the enforcement of judgments of US courts, based on the civil liability provisions of US federal securities laws.

Forward-looking statements

This announcement (including information incorporated by reference into this announcement) contains certain forward-looking statements. These statements are based on the current expectations of Bidco or SQS (as the case may be) and are naturally subject to uncertainty and changes in circumstances. These forward-looking statements may include statements about the expected effects on Bidco or SQS of the Offer, the expected timing and scope of the Offer, strategic options and all other statements in this announcement other than historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "budget", "schedule", "forecast", "project", "goal", "believe", "hope", "aims", "continue", "will", "may", "should", "would", "could", "subject to", or other words of similar meaning. By their nature, forward-looking statements involve known and unknown risks and uncertainties, because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward-looking statements in this announcement could cause actual results, outcomes and developments to differ materially from those expressed in, or implied by, such forward-looking statements and such statements are therefore qualified in their entirety by the risks and uncertainties surrounding these future expectations. Many of these risks and uncertainties relate to factors that are beyond the entities' ability to control or estimate precisely, such as, but not limited to, general business and market conditions both globally and locally, political, economic and regulatory forces, industry trends and competition, future exchange and interest rates, changes in government and regulation including in relation to health and safety, the environment, labour relations and tax rates and future business combinations or dispositions. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, neither Bidco nor SQS can give any assurance, representation or guarantee that such expectations will prove to have been correct and such forward-looking statements should be construed in light of such factors and you are therefore cautioned not to place reliance on these forward-looking statements which speak only as at the date of this announcement. Neither Bidco nor SQS assumes any obligation to update or correct the information contained in this announcement (whether as a result of new information, future events or otherwise), except as required by applicable law or regulations.

No profit forecasts or estimates

Nothing in this announcement is intended or shall be deemed to be a forecast, projection or estimate of the future financial performance of Bidco or SQS or the Enlarged Group and no statement in this announcement should be interpreted to mean that earnings or earnings per share of those entities (where relevant) for the current or future financial periods would necessarily match or exceed the historical published earnings or earnings per share of those entities (where relevant).

Application of the Code and dealing disclosure requirements

SQS is a German registered company whose shares are traded on AIM and is therefore not subject to the Code. Accordingly, SQS Shareholders and others dealing in SQS Shares are not obliged to disclose any of their dealings under the provisions of the Code. However, market participants are requested to make disclosures of "dealings" as if the Code applied and as if SQS were in an "offer period" under the Code. Disclosures made in relation to relevant securities of SQS should be released via a Regulatory Information Service using the headline "Document re: SQS". The headline "Form 8/8.3" should not be used. Any question regarding completion of these forms should be raised with Numis (on +44 (0) 207 260 1000).

SQS's website contains the form of disclosure requested. If you are in any doubt as to whether or not you should disclose "dealings", you should contact an independent financial adviser authorised by the Financial Conduct Authority under the Financial Services and Markets Act 2000 (or, if you are resident in a jurisdiction other than the United Kingdom, a financial adviser authorised under the laws of such jurisdiction). The guidance set out below follows the requirements of Rule 8 of the Code.

Any person who is "interested" in one per cent. or more of any class of "relevant securities" of SQS or of any "securities exchange offeror" (being any "offeror" other than an "offeror" in respect of which it has been announced that its "offer" is, or is likely to be, solely in "cash") is requested to make an "Opening Position Disclosure" following the commencement of the Offer Period which begins upon the release of this announcement.

An "Opening Position Disclosure" should contain details of the person's "interests" and short positions in, and rights to subscribe for, any "relevant securities" of each of (i) SQS and (ii) any "securities exchange offeror(s)". Persons requested to make an "Opening Position Disclosure" are requested to make such "Opening Position Disclosure" by no later than 3:30 p.m. on the tenth "business day" following the release of this announcement. Relevant persons who undertake "dealings" in the relevant securities of SQS or a "securities exchange offeror" prior to the deadline for making an "Opening Position Disclosure" are requested instead to make a "Dealing Disclosure".

If any person is, or becomes "interested" (directly or indirectly) in one per cent. or more of any class of "relevant securities" of an "offeree" or of any "securities exchange offeror", all "dealings" in any "relevant securities" of that "offeree" or of any "securities exchange offeror" (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") should be publicly disclosed in a "Dealing Disclosure" by no later than 3:30 p.m. on the "business day" following the date of the relevant transaction. These requested disclosures should continue until the date on which any "offer" becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the Offer Period otherwise ends. A "Dealing Disclosure" should contain details of the "dealing" concerned and of the person's interests and short positions in, and rights to subscribe for, any "relevant securities" of (i) SQS and (ii) any "securities exchange offeror", save to the extent that these details have previously been disclosed.

Accordingly, in the case of both an "Opening Position Disclosure" and any "Dealing Disclosure", disclosures of interests in the shares of SQS are requested to be made.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of SQS or a "securities exchange offeror", they should be regarded to be a single person for these purposes.

"Opening Position Disclosures" will be made by SQS and by any "offeror", and all "dealings" in "relevant securities" of SQS by SQS, by any "offeror" or by any persons "acting in concert" with any of them, will be disclosed in a "dealing disclosure" by no later than 12 noon on the "business day" following the date of the relevant transaction.

"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of "securities". In particular, a person will be treated as having an "interest" by virtue of the ownership or control of "securities", or by virtue of any option in respect of, or derivative referenced to, "securities".

Terms in quotation marks are defined in the Code, which can be found on the website of the UK Panel on Takeovers and Mergers. If you are in any doubt as to whether the request to disclose a "dealing" by reference to the above applies to you, you should contact an independent financial adviser authorised by the Financial Conduct Authority under the Financial Services and Markets Act 2000 (as amended).

Purchases outside the Offer

Bidco or its nominees or brokers (acting as agents) may purchase SQS Shares otherwise than under the Offer, such as in the open market or through privately negotiated purchases. Such purchases shall comply with the terms of the Framework Agreement and, if applicable, the AIM Rules.

Publication on websites and availability of hard copies

A copy of this announcement will, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, be available free of charge for inspection on SQS's website at www.sqs.com/en/offer.php by no later than 12 noon on the Business Day following this announcement. For the avoidance of doubt, the contents of the websites referred to in this announcement are not incorporated into, and do not form part of, this announcement.

You may request a hard copy of this document by contacting Computershare Investor Services PLC, on 0370 707 1312 if calling from within the United Kingdom or +44 (0) 370 707 1312 if calling from outside the United Kingdom, or by submitting a request in writing to Computershare Investor Services PLC, The Pavilions, Bridgwater, Bristol, BS13 8AE, United Kingdom. Lines are open 8.30 a.m. to 5.30 p.m. Monday to Friday. Calls to the helpline from within the United Kingdom will be charged at your network provider's standard rate. Calls to the helpline from outside the United Kingdom will be charged at the applicable international rate. You may also request that all future documents, announcements and information to be sent to you in relation to the Offer should be in hard copy form.

Information relating to SQS Shareholders

Please be aware that addresses, electronic addresses and certain other information provided by SQS Shareholders, persons with information rights and other relevant persons for the receipt of communications from SQS may be provided to Bidco during the Offer Period.

Rounding

Certain figures included in this announcement have been subject to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetical aggregation of the figures that precede them.

Time

All times shown in this announcement are London times, unless otherwise stated.

Appendix 1

Conditions and certain further terms of the Offer

Part A: Conditions of the Offer

   1.             Acceptance Condition 
   1.1          The Offer is conditional upon: 

1.1.1 valid acceptances of the Offer being received (and not validly withdrawn) by not later than 1.00 p.m. on the First Closing Date (or such later time(s) and/or date(s) as Bidco may, subject to the Framework Agreement or with the consent of SQS decide) in respect of SQS Shares which, when taken together with any SQS Shares acquired by Bidco (whether pursuant to the Offer or otherwise), will result in Bidco holding SQS Shares which constitute, in aggregate, 75 per cent. or more (or such lower percentage as Bidco may determine) in nominal capital of the SQS Shares and of the voting rights normally exercisable at a general meeting of SQS (assuming exercise of all SQS Stock Options which are outstanding at that time which are not the subject of valid acceptances of the Stock Option Proposals), provided that this Condition will not be satisfied unless Bidco and/or its wholly owned subsidiaries have acquired, or agreed to acquire, (whether pursuant to the Offer or otherwise) SQS Shares which carry, in aggregate, more than 50 per cent. of the voting rights then normally exercisable at a general meeting of SQS (including any voting rights attaching to SQS Shares which are unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances pursuant to the exercise of any outstanding SQS Stock Options); and

1.1.2 valid acceptances of the Stock Option Proposals being received (and not validly withdrawn) by not later than 1.00 p.m. on the First Closing Date (or such later time(s) and/or date(s) as Bidco may subject to the Stock Option Proposals decide) which will result in the total number of outstanding SQS Stock Options representing, in aggregate, less than 5 per cent. of the nominal capital of the SQS Shares and of the voting rights then normally exercisable at a general meeting of SQS.

   2.             Anti-trust Condition 

2.1 The Offer is conditional upon the following Conditions being satisfied or, where relevant, waived:

   2.1.1       the: 

(i) German Federal Cartel Office (Bundeskartellamt) ("GFCO") informing Bidco that it may proceed with the proposed acquisition by Bidco of the entire issued and to be issued share capital of SQS as contemplated by this Offer (the "Proposed Acquisition"); or

(ii) time period given to the GFCO under Section 40(1) first sentence of the Act Against Restraints of Competition ("GWB") having expired without the GFCO informing Bidco or the Seller that a second phase investigation is to be initiated pursuant to Section 40(1) of the GWB; or

(iii) time period given to the GFCO under Section 40(2) second sentence of the GWB having expired without the GFCO informing Bidco or the Seller of its decision ordering the prohibition of the Proposed Acquisition pursuant to Section 40(2) of the GWB; and

   2.1.2       the: 

(i) Austrian Federal Competition Authority (Bundeswettbewerbsbehörde) ("AFCA") informing Bidco that the AFCA and the Austrian Federal Cartel Prosecutor (Bundeskartellanwalt) ("AFCP") have both waived their right to initiate an in-depth review under section 11 of the Cartel Act (Kartellgesetz 2005) ("Cartel Act") of the Proposed Acquisition; or

(ii) time period given to the AFCA and the AFCP under Section 10 of the Cartel Act having expired without the AFCA or the AFCP informing Bidco that one or both authorities has initiated a review under section 11 of the Cartel Act; or

(iii) time period given to the Cartel Court under Section 14 of the Cartel Act having expired without the Cartel Court ordering the prohibition of the Proposed Acquisition pursuant to section 12 of the Cartel Act; and

2.1.3 the GFCO and AFCA not having made a request pursuant to Article 22(1) of the Council Regulation (EC) No. 139/2004 ("EUMR") to refer the Proposed Acquisition for examination by the European Commission under the EUMR, and SQS not having made a submission pursuant to Article 4(5) of the EUMR for the Proposed Acquisition to be examined by the European Commission under the EUMR.

   3.             Further Conditions 

In addition, subject to the certain further terms as stated in Part B of this Appendix 1 and to the requirements of the Framework Agreement, the Offer is conditional upon the following Conditions (as amended, if appropriate) being satisfied or, where relevant, waived:

Notifications, waiting periods and authorisations

3.1 Without prejudice to the Conditions set out in paragraph 2, all anti-trust and/or merger control notifications, filings or applications which are necessary in connection with the Offer having been made and all necessary waiting periods (including any extensions thereof) under any applicable anti-trust and/or merger control legislation or regulation of any jurisdiction having expired, lapsed or been terminated (as appropriate) and all anti-trust and/or merger control authorisations, orders, consents, clearances, permissions and approvals necessary in any jurisdiction for, or in respect of, the Offer and, the acquisition or the proposed acquisition of any shares or other securities in, or control or management of, SQS having been obtained.

3.2 Excluding anti-trust or merger control clearance in relation to the implementation of this Offer (in respect of which only paragraphs 2 and 3.1 above shall apply) all material notifications, filings or applications which are necessary or reasonably considered appropriate in connection with the Offer having been made and all necessary waiting periods (including any extensions thereof) under any applicable legislation or regulation of any jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory and regulatory obligations in any jurisdiction having been complied with in each case in respect of the Offer and all material authorisations, orders, recognitions, grants, consents, clearances, confirmations, certificates, licences, permissions and approvals ("Authorisations") deemed necessary or reasonably appropriate by Bidco in any jurisdiction for, or in respect of, the Offer and, the acquisition or the proposed acquisition of any shares or other securities in, or control or management of, SQS having been obtained in terms and in a form reasonably satisfactory to Bidco from any appropriate central bank, government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental or investigative body or authority, court, trade agency, professional association, institution, employee representative body or any other body or person whatsoever in any jurisdiction or (without prejudice to the generality of the foregoing) from any person or bodies with whom any member of the SQS Group has entered into contractual arrangements and all such Authorisations necessary or reasonably appropriate to carry on the business of any member of the SQS Group in any jurisdiction having been obtained and all such Authorisations remaining in full force and effect at the time at which the Offer becomes otherwise unconditional in all respects and there being no notice or written intimation of an intention to revoke, suspend,

restrict, modify or not to renew such Authorisations.

General regulatory

3.3 No Third Party having given notice of a decision to take, institute, implement or threaten any action, proceeding, suit, investigation, inquiry or reference (and in each case, not having withdrawn the same), or having required any action to be taken or otherwise having done anything, or having enacted, made or proposed any statute, regulation, decision, order or change to published practice (and in each case, not having withdrawn the same) and there not continuing to be outstanding any statute, regulation, decision or order which would or might reasonably be expected to make the Offer or its implementation, or the acquisition or proposed acquisition of any shares or other securities in, or control of, SQS by Bidco, void, unenforceable and/or illegal under the laws of any relevant jurisdiction, or otherwise, directly or indirectly, materially prevent or prohibit, restrict, restrain or delay the same or otherwise interfere with the Offer or its implementation, or impose material additional conditions or obligations with respect to, or otherwise materially impede, interfere or require amendment of the Offer or the acquisition of any shares or other securities in, or control of, SQS by Bidco, to an extent which is material in the context of the Offer and all applicable waiting and other time periods (including any extensions thereof) during which any such Third Party could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or take any other step under the laws of any jurisdiction in respect of the Offer having expired, lapsed or been terminated.

Certain matters arising as a result of any arrangement, agreement, etc.

3.4 Except as Disclosed, there being no provision of any arrangement, agreement, lease, licence, franchise, permit or other instrument to which any member of the SQS Group is a party or by or to which any such member or any of its assets is, or may be, bound, entitled or subject, or any event or circumstance which, as a consequence of the Offer or the proposed acquisition by Bidco of any shares or other securities in SQS or because of the change in the control of SQS or any other member of the SQS Group represented by the Offer, would, or might reasonably be expected to, result in (in each case to an extent which is, or would be, material in the context of the SQS Group, taken as a whole):

3.4.1 any monies borrowed by, or any other indebtedness, whether actual or contingent, of, or any grant available to, any member of the SQS Group being or becoming repayable, or capable of being declared repayable, immediately or prior to its or their stated maturity date or repayment date, or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;

3.4.2 the creation or enforcement of any mortgage, charge or other security interest over the whole, or any part, of the business, property or assets of any member of the SQS Group or any such mortgage, charge or other security interest (whenever created, arising or having arisen) becoming enforceable;

3.4.3 any such arrangement, agreement, lease, licence, franchise, permit or other instrument being terminated or the rights, liabilities, obligations or interests of any member of the SQS Group therein being adversely modified or adversely affected, or any obligation or liability arising or any adverse action being taken or arising thereunder;

3.4.4 any liability of any member of the SQS Group to make any severance, termination, bonus or other payment to any of its directors or other officers;

3.4.5 the rights, liabilities, obligations, interests or business of any member of the SQS Group under any such arrangement, agreement, lease, licence, franchise, permit or other instrument, or the interests or business of any member of the SQS Group in or with any other person, body, firm or company (or any agreement or arrangement relating to any such interests or business) being, or becoming capable of being, terminated or adversely modified or affected or any onerous obligation or liability arising or any adverse action being taken thereunder;

3.4.6 any member of the SQS Group ceasing to be able to carry on business under any name under which it presently carries on business;

3.4.7 the value of, or the financial or trading position or prospects of, any member of the SQS Group being prejudiced or adversely affected; or

3.4.8 the creation or acceleration of any liability (actual or contingent) by any member of the SQS Group other than trade creditors or other liabilities incurred in the ordinary course of business,

and no event having occurred which, under any provision of any arrangement, agreement, lease, licence, franchise, permit or other instrument to which any member of the SQS Group is a party or by or to which any such member or any of its assets are bound, entitled or subject, would be expected to result in any of the events or circumstances as are referred to in Conditions 3.4.1 to 3.4.8 (in each case, to an extent which is material in the context of the SQS Group, taken as a whole).

Certain events occurring since 30 June 2017

   3.5          Except as Disclosed, since 30 June 2017 no member of the SQS Group having: 

3.5.1 issued or agreed to issue, or authorised or proposed or announced its intention to authorise or propose the issue of, additional shares of any class or securities or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares, securities or convertible securities or transferred or sold, or agreed to transfer or sell, or authorised or proposed the transfer or sale of SQS Shares out of treasury (except, where relevant, as between SQS and wholly owned subsidiaries of SQS or between the wholly owned subsidiaries of SQS);

3.5.2 recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution (whether payable in cash or otherwise) other than dividends (or other distributions whether payable in cash or otherwise) lawfully paid or made by any wholly owned subsidiary of SQS to SQS or any of its wholly owned subsidiaries;

3.5.3 other than pursuant to the Offer (and except for transactions between SQS and its wholly owned subsidiaries or between the wholly owned subsidiaries of SQS and transactions in the ordinary course of business) implemented, effected, authorised or proposed or announced its intention to implement, effect, authorise or propose any merger, demerger, reconstruction, amalgamation, scheme, commitment, acquisition or disposal of assets or shares or loan capital (or the equivalent thereof) in any undertaking or undertakings, in any such case, to an extent which is material in the context of the SQS Group, taken as a whole;

3.5.4 (except for transactions between SQS and its wholly owned subsidiaries or between the wholly owned subsidiaries of SQS) disposed of, or transferred, mortgaged or created any security interest over, any asset or any right, title or interest in any asset or authorised, proposed or announced any intention to do so which, in any case, is material in the context of the SQS Group, taken as a whole;

3.5.5 (except for transactions between SQS and its wholly owned subsidiaries or between the wholly owned subsidiaries of SQS) issued, authorised or proposed or announced an intention to announce or propose the issue of, or made any change in or to the terms of, any debentures or, except in the ordinary course of business, become subject to any contingent liability or incurred or increased any indebtedness which, in any case, is material in the context of the SQS Group, taken as a whole;

3.5.6 entered into or varied, or authorised, proposed or announced its intention to enter into or vary, any material contract, arrangement, agreement, transaction or commitment (whether in respect of capital expenditure or otherwise) except in the ordinary course of business which is of a long term, unusual or onerous nature or magnitude or which involves an obligation of a nature or magnitude which is likely to be restrictive on the business of any member of the SQS Group and which, in any case, is material in the context of the SQS Group, taken as a whole;

3.5.7 entered into or varied the terms of, or made any offer (which remains open for acceptance) to enter into or vary, to a material extent, the terms of, any contract, service agreement, commitment or arrangement with any director or senior executive of any member of the SQS Group, save as agreed by Bidco;

3.5.8 proposed, agreed to provide or modified to a material extent the terms of any share option scheme, incentive scheme or other benefit relating to the employment, or termination of employment, of any employee of the SQS Group save as agreed by Bidco or which is required pursuant to the implementation of the Offer;

3.5.9 purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or, except in respect of the matters mentioned in Condition 3.5.1, made any other change to any part of its share capital, save as agreed by Bidco or which is required pursuant to the implementation of the Offer;

3.5.10 waived, compromised or settled any claim (other than in the ordinary course of business) which is material in the context of the SQS Group, taken as a whole;

3.5.11 terminated, or varied the terms of, any agreement or arrangement between any member of the SQS Group and any other person in a manner which would have a material adverse effect on the financial position of the SQS Group, taken as a whole;

3.5.12 other than pursuant to the Offer and as envisaged in accordance with the terms of the Offer, made any alteration to its articles of association or other incorporation documents, in each case, which is material in the context of the Offer;

3.5.13 except in relation to changes made or agreed as a result of, or arising from, changes to legislation, made or agreed or consented to any material change to the terms of the trust deeds or rules or policy or any other governing documents constituting the pension scheme(s) established by any member of the SQS Group for its directors, employees or their dependents or any material change to the contributions payable to any such scheme or to the benefits which accrue, or to the pensions which are payable, thereunder, or to the basis on which qualification for, or accrual or entitlement to, such benefits or pensions are calculated or determined or to the basis upon which the liabilities (including pensions) of such pension schemes are funded or made, or agreed or consented to, in each case, which is material in the context of the SQS Group, taken as a whole;

3.5.14 been unable, or admitted in writing that it is unable, to pay its debts or commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness, or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased, or threatened to cease, carrying on all, or a substantial part of, its business, in each case, which is material in the context of the SQS Group, taken as a whole;

3.5.15 (other than in respect of a member of the SQS Group which is dormant and was solvent at the relevant time) taken or proposed any steps, corporate action or had any legal proceedings instituted or threatened against it in relation to the suspension of payments, which is material in the context of the SQS Group, taken as a whole;

3.5.16 entered into, implemented, suffered or authorised the entry into or implementation of, passed any resolution for or proposed a moratorium of any indebtedness, its winding-up (voluntary or otherwise), dissolution, reorganisation or for the appointment of a receiver, administrator, manager, administrative receiver, trustee or similar officer of all, or any material part of, its assets or revenues or any analogous or equivalent steps or proceedings in any jurisdiction or appointed any analogous person in any jurisdiction or had any such person appointed, in each case, which is material in the context of the SQS Group, taken as a whole;

3.5.17 (except for transactions between SQS and its wholly owned subsidiaries or between the wholly owned subsidiaries of SQS) made, authorised or proposed or announced an intention to propose any change in its loan capital, in each case, which is material in the context of the SQS Group, taken as a whole;

3.5.18 entered into, implemented or authorised the entry into, any joint venture, asset or profit sharing arrangement, partnership or merger of business or corporate entities, in each case, which is material in the context of the SQS Group, taken as a whole;

3.5.19 entered into any licence or other disposal of intellectual property rights of any member of the SQS Group which is material in the context of the SQS Group taken as a whole, and outside the normal course of business; or

3.5.20 entered into any agreement, arrangement, commitment or contract or passed any resolution or made any offer (which remains open for acceptance) with respect to, or announced an intention to, or to propose to, effect any of the transactions, matters or events referred to in this Condition 3.5.

No adverse change, litigation, regulatory enquiry or similar

   3.6          Except as Disclosed, since 30 June 2017 there having been: 

3.6.1 no adverse change in the business, assets, financial or trading position or profits or prospects or operational performance of any member of the SQS Group which, in any case, is material in the context of the SQS Group, taken as a whole;

3.6.2 no litigation, arbitration proceedings, prosecution or other legal proceedings having been threatened in writing, announced or instituted by or against or remaining outstanding against or in respect of, any member of the SQS Group or to which any member of the SQS Group is, or could reasonably be expected to become, a party (whether as claimant, defendant or otherwise), in each case, which would or would be reasonably expected to have a material adverse effect on the SQS Group, taken as a whole, or in the context of the Offer;

3.6.3 no enquiry, review or investigation by, or complaint or reference to, any Third Party against or in respect of any member of the SQS Group having been threatened in writing, announced or instituted or remaining outstanding by, against or in respect of any member of the SQS Group, in each case which would or would be reasonably expected to have a material adverse effect on the SQS Group, taken as a whole, or in the context of the Offer;

3.6.4 no contingent or other liability having arisen or become apparent to Bidco or increased other than in the ordinary course of business which would, or would be reasonably expected to, adversely affect the business, assets, financial or trading position or profits or prospects of any member of the SQS Group to an extent which is material in the context of the SQS Group, taken as a whole, or in the context of the Offer; and

3.6.5 no steps having been taken and no omissions having been made which are likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the SQS Group which is necessary for the proper carrying on of its business and the withdrawal, cancellation, termination or modification of which would be reasonably expected to have a material adverse effect on the SQS Group, taken as a whole, or in the context of the Offer.

No discovery of certain matters regarding information, liabilities and environmental issues

   3.7          Except as Disclosed, Bidco not having discovered: 

3.7.1 that any financial, business or other information concerning the SQS Group Publicly Disclosed or disclosed at any time to Bidco or to any of its advisers by or on behalf of any member of the SQS Group prior to the date of this announcement is misleading, contains a material misrepresentation of any fact, or omits to state a fact necessary to make that information not misleading, to an extent which, in any such case, is material in the context of the SQS Group, taken as a whole;

3.7.2 that any member of the SQS Group or any partnership, company or other entity in which any member of the SQS Group has a significant economic interest and which is not a subsidiary undertaking of SQS is, otherwise than in the ordinary course of business, subject to any liability, contingent or otherwise, and which is material in the context of the SQS Group, taken as a whole, or in the context of the Offer;

3.7.3 that any past or present member of the SQS Group has not complied in any material respect with all applicable legislation, regulations or other requirements of any jurisdiction or any Authorisations relating to the use, treatment, storage, carriage, disposal, discharge, spillage, release, leak or emission of any waste or hazardous substance or any substance likely to impair the environment (including any property) or harm human or animal health or otherwise relating to environmental matters or the health and safety of humans, which non-compliance would be likely to give rise to any material liability including any penalty for non-compliance (whether actual or contingent) on the part of any member of the SQS Group which, in any case, is material in the context of the SQS Group, taken as a whole;

3.7.4 that there has been a material disposal, discharge, spillage, accumulation, release, leak, emission or the migration, production, supply, treatment, storage, transport or use of any waste or hazardous substance or any substance likely to impair the environment (including any property) or harm human or animal health which (whether or not giving rise to non- compliance with any law or regulation), would be reasonably likely to give rise to any material liability (whether actual or contingent) on the part of any member of the SQS Group which in any case is material in the context of the SQS Group, taken as a whole;

3.7.5 that there is, or is reasonably likely to be, any material obligation or liability (whether actual or contingent) or requirement to make good, remediate, repair, reinstate or clean up any property or asset currently or previously owned, occupied, operated or made use of or controlled by any past or present member of the SQS Group (or on its behalf), or in which any such member may have, or previously have had or be deemed to have had, an interest, under any environmental legislation, common law, regulation, notice, circular, Authorisation or order of any Third Party in any jurisdiction or to contribute to the cost thereof or associated therewith or indemnify any person in relation thereto, which, in any case, is material in the context of the SQS Group, taken as a whole;

3.7.6 that circumstances exist (whether as a result of the making of the Offer or otherwise) which would be reasonably likely to lead to any Third Party instituting (or whereby any member of the SQS Group would be reasonably likely to be required to institute) an environmental audit or take any steps which would in any such case be reasonably likely to result in any actual or contingent liability to improve or install new plant or equipment or to make good, repair, reinstate or clean up any property of any description or any asset now or previously owned, occupied or made use of by any past or present member of the SQS Group (or on its behalf) or by any person for which a member of the SQS Group is or has been responsible, or in which any such member may have, or previously have had or be deemed to have had, an interest, which, in any case, is material in the context of the SQS Group, taken as a whole;

3.7.7 that SQS or any member of the SQS Group is subject to any liability, actual or contingent and which has arisen otherwise than in the ordinary course of business, which is not fairly disclosed in the annual report and accounts of SQS for the period ended 31 December 2016 and which is material in the context of the SQS Group, taken as a whole; or

3.7.8 that circumstances exist whereby a person has, or class of persons have, or is reasonably likely to have, any legitimate claim or claims against any member of the SQS Group in respect of any product or process, or materials used therein, now or previously manufactured, sold, supplied or carried out by any past or present member of the SQS Group, which, in each case, is material in the context of the SQS Group, taken as a whole.

Anti-corruption and criminal property

   3.8          Except as Disclosed, Bidco not having discovered that: 

(a) any member of the SQS Group or any person that performs or has performed services for or on behalf of any such member is or has engaged in any activity, practice or conduct which would constitute an offence under the UK Bribery Act 2010, the US Foreign Corrupt Practices Act or any other applicable anti-corruption legislation;

(b) any asset of any member of the SQS Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition); or

(c) any past or present member of the SQS Group has engaged in any activity or business with, or made any investments in, or made any payments to any government, entity or individual covered by any of the economic sanctions administered by the United Nations or the European Union (or any of their respective member states) or the United States Office of Foreign Assets Control or any other governments or supranational body or authority in any jurisdiction.

Part B: Certain Further Terms of the Offer

Bidco reserves the right to waive, in whole or in part, all or any of the above Conditions 2 or 3.1 to 3.8 (inclusive). Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.

Bidco shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or to treat as fulfilled any of Conditions 2 or 3.1 to 3.8 (inclusive) by a date earlier than the latest date for the fulfillment of that Condition notwithstanding that the other Conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such Conditions may not be capable of fulfillment.

If pursuant to the Framework Agreement Bidco is required to make a mandatory offer for SQS Shares, Bidco will make such alterations to any of the above Conditions and terms of the Offer as are necessary to comply with the relevant provisions of the Code as if the Offer were subject to Rule 9 of the Code (except as otherwise specifically provided in the Framework Agreement).

If the Offer lapses, it will cease to be capable of further acceptance and persons accepting the Offer and Bidco shall thereupon cease to be bound by acceptances submitted before the time the Offer lapses.

The availability of the Offer to persons not resident in the United Kingdom or in Germany may be affected by the laws of the relevant jurisdiction. Persons who are not resident in the United Kingdom or in Germany should inform themselves about and observe any applicable requirements.

The Offer will not be made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, telex, telephone, internet or e-mail) of interstate or foreign commerce of, or of any facility of a national securities exchange of, any Restricted Jurisdiction and the Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within any Restricted Jurisdiction (unless otherwise determined by Bidco).

SQS Shares which will be acquired under the Offer will be acquired fully paid and free from all liens, equities, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature and together with all rights now or hereafter attaching or accruing to them, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of this announcement.

The Offer Price for each outstanding SQS Share validly tendered (and not validly withdrawn) in accordance with the terms and Conditions of the Offer will be payable in Sterling. Any fees, commissions, expenses or any other costs incurred by a SQS Shareholder in connection with any currency conversion arising from settlement of the consideration to which any SQS Shareholder is entitled will be borne by that respective SQS Shareholder.

Insofar as a dividend or other distribution and/or a return of capital is proposed, declared, made, paid or payable by SQS in respect of an SQS Share on or after the date of this announcement, Bidco reserves the right to reduce the price payable under the Offer in respect of an SQS Share by the amount of such dividend and/or distribution and/or return of capital, except in so far as the SQS Share is or will be transferred pursuant to the Offer on a basis which entitles Bidco alone to receive the dividend and/or distribution and/or return of capital, but if that reduction to the price has not been effected, the person to whom the Offer consideration is paid in respect of that SQS Share will be obliged to account to Bidco for the amount of such dividend and/or distribution and/or return of capital. If Bidco exercises its right to reduce the Offer consideration by all or part of the amount of such dividend and/or distribution and/or return of capital that has not been paid, SQS Shareholders will be entitled to receive and retain that dividend and/or distribution and/or return of capital.

Consistent with Rule 13.5 of the Code and in accordance with the Framework Agreement, Bidco may not invoke a Condition to the Offer (not including the Acceptance Condition or the Anti-trust Condition) so as to cause the Offer not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the Condition are of material significance to Bidco in the context of the Offer. Whether or not such Condition can be invoked would be determined by the Code Committee, and failing their reaching agreement, by the Code Expert in accordance with the Framework Agreement. The Conditions contained in paragraph 1 (Acceptance Condition) and paragraph 2 (Anti-trust Condition) of Part A of this Appendix 1 are not subject to the limitations and procedure described above.

The Offer will be governed by English law (and in respect of the transfer of the legal title of SQS Shares, German law) and will be subject to the jurisdiction of the English courts and to the Conditions and further terms set out in this Appendix 1 and to be set out in the Offer Document and, in respect of SQS Shares held directly in registered form, the Form of Acceptance. Under the terms of the Framework Agreement, Bidco and SQS have agreed to conduct themselves and the Offer as if the Offer were subject to the Code and to observe and comply with the Code (save as agreed between them in the Framework Agreement). The Offer will also be subject to applicable requirements of the London Stock Exchange, the FCA and the AIM Rules.

Appendix 2

Bases and sources

In this announcement:

1. Unless otherwise stated, financial information relating to the SQS Group has been extracted or derived (without any adjustment) from the audited annual report and accounts of SQS for the year ended 31 December 2016 or from the unaudited interim condensed consolidated financial statements for the SQS Group as of and for the six-month period ended 30 June 2017.

2. References to the existing issued share capital of SQS are to the 32,431,967 SQS Shares in issue as at 14 December 2017, being the last Business Day prior to the date of this announcement.

3. As at the close of business on 14 December 2017, being the last Business Day prior to the date of this announcement, SQS had 32,431,967 SQS Shares in issue. The International Securities Identification Number for SQS Depositary Interests is DE0005493514.

4. The value of the Offer is calculated on the basis of the fully diluted number of SQS Shares, being 34,090,977.

   5.     Unless otherwise stated, all Closing Prices have been derived from Bloomberg. 
   6.     The premium calculations to the price per SQS Share have been calculated by reference to: 

a. the Closing Price of an SQS Share of 527.5 pence on 14 December 2017, being the last Business Day prior to the date of this announcement;

b. the six month volume weighted average Closing Price of 539.1 pence per SQS Share since 14 June 2017; and

   c.     the highest ever Closing Price of 627.5 pence per SQS Share in May 2015. 

Appendix 3

Details of irrevocable undertakings and letters of intent

Part A: Irrevocable undertakings from SQS Managing Directors and SQS Supervisory Board Members

The following SQS Managing Directors and SQS Supervisory Board Members, who are holders of SQS Shares and/or SQS Stock Options, have given irrevocable undertakings to accept, or procure acceptances of, the Offer and/or the cash cancellation offer under the Stock Option Proposals in respect of their and their close relatives' SQS Shares and SQS Stock Options:

 
 Name                 Position             Number of     Percentage      Number of SQS 
                                            SQS Shares    of existing     Stock Options 
                                                          issued share 
                                                          capital of 
                                                          SQS 
-------------------  -------------------  ------------  --------------  --------------- 
                      SQS Managing 
                       Director 
 Diederik              (Chief Executive 
  Vos                  Officer)            103,129       0.32            450,000 
-------------------  -------------------  ------------  --------------  --------------- 
                      SQS Managing 
                       Director 
 René             (Chief Financial 
  Gawron               Officer)            147,129       0.45            220,000 
-------------------  -------------------  ------------  --------------  --------------- 
                      SQS Managing 
                       Director 
                       (Chief Operating 
 Ralph Gillessen       Officer)            60,000        0.19            215,000 
-------------------  -------------------  ------------  --------------  --------------- 
                      SQS Supervisory 
                       Board Member 
 David Bellin          (Chairman)          7,600         0.02            0 
-------------------  -------------------  ------------  --------------  --------------- 
                      SQS Supervisory 
                       Board Member 
                       (Employee 
 Peter Bölter     Representative)     7,129         0.02            0 
-------------------  -------------------  ------------  --------------  --------------- 
                      SQS Supervisory 
                       Board Member 
                       (Employee 
 Anne Baumeister       Representative)     4,846         0.01            0 
-------------------  -------------------  ------------  --------------  --------------- 
                      SQS Supervisory 
 Jeremy Hamer          Board Member        7,900         0.02            0 
-------------------  -------------------  ------------  --------------  --------------- 
                      SQS Supervisory 
 Heinz Bons            Board Member        3,788,316     11.68           0 
-------------------  -------------------  ------------  --------------  --------------- 
 

The irrevocable undertakings will only cease to be binding if the Offer lapses or is withdrawn and, for the avoidance of doubt, no new, revised or replacement Offer has been announced, in accordance with the Framework Agreement, in its place.

Part B: Irrevocable undertakings from SQS Shareholders

The following SQS Shareholders have given irrevocable undertakings to accept the Offer, or procure acceptances of, the Offer:

 
 Name                            Number of SQS   Percentage of existing 
                                  Shares          issued share capital 
                                                  of SQS 
------------------------------  --------------  ----------------------- 
 Rudolf van Megen                4,220,423       13.01 
------------------------------  --------------  ----------------------- 
 Herald Investment Management 
  Limited                        2,189,445       6.75 
------------------------------  --------------  ----------------------- 
 Marlborough Fund Managers 
  Limited                        695,000         2.14 
------------------------------  --------------  ----------------------- 
 

The irrevocable undertakings will only cease to be binding if:

(a) the Offer lapses or is withdrawn and, for the avoidance of doubt, no new, revised or replacement Offer has been announced, in accordance with the Framework Agreement, in its place; or

(b) any person other than Bidco and any person acting in concert (as defined in the Code) with Bidco announces a firm intention to make an offer to acquire all of the SQS Shares (a "Competing Bid") and the value of the consideration pursuant to the terms of the Competing Bid (as at the date on which such person announces its firm intention to make the Competing Bid) (i) in the case of Rudolf van Megen is 900p or more per SQS Share; and (ii) in the case of Herald Investment Management Limited and Marlborough Fund Managers Limited exceeds the value of the Offer by 10 per cent. or more per SQS Share.

Part C: Letters of intent from SQS Shareholders

The following SQS Shareholders have given non-binding letters of intent to accept the Offer:

 
 Name                              Number of SQS   Percentage of existing 
                                    Shares          issued share capital 
                                                    of SQS 
--------------------------------  --------------  ----------------------- 
 Rock (Nominees) Limited           759,940         2.34 
--------------------------------  --------------  ----------------------- 
 Brooks Macdonald Asset 
  Management Limited               879,691         2.71 
--------------------------------  --------------  ----------------------- 
 Octopus Investments Ltd           4,826,223       14.88 
--------------------------------  --------------  ----------------------- 
 Miton Asset Management 
  Limited                          1,856,791       5.73 
--------------------------------  --------------  ----------------------- 
 Schroder Investment Management 
  Limited                          1,326,898       4.09 
--------------------------------  --------------  ----------------------- 
 J O Hambro Capital Management 
  Limited                          523,000         1.61 
--------------------------------  --------------  ----------------------- 
 

The signatories to the letters of intent reserve their position should information arise which is material in the context of the Offer including, for the avoidance of doubt, a higher competing offer.

Appendix 4

Definitions

 
 Acceptance Condition                           the condition set out at paragraph 
                                                 1 of Part A of Appendix 1 to this 
                                                 announcement; 
 AG or Aktiengesellschaft                       a stock corporation (Aktiengesellschaft) 
                                                 incorporated in Germany under 
                                                 the German Stock Corporation 
                                                 Act (Aktiengesetz); 
 AIM                                            the AIM market of the London 
                                                 Stock Exchange; 
 AIM Rules                                      the AIM Rules for Companies published 
                                                 by the London Stock Exchange; 
 Anti-trust Condition                           the condition set out at paragraph 
                                                 2 of Part A of Appendix 1 to this 
                                                 announcement; 
 Ardian France                                  Ardian France, a French société 
                                                 anonyme incorporated under the 
                                                 laws of the Republic of France 
                                                 under registration number 403 
                                                 201 882 RCS Paris, having its 
                                                 registered office at 20 place 
                                                 Vendôme, 75001 Paris, France; 
 Ardian Group                                   Ardian Holding and its affiliated 
                                                 companies (verbundene Unternehmen) 
                                                 as defined in the German Stock 
                                                 Corporation Act (Aktiengesetz) 
                                                 from time to time; 
 Ardian Holding                                 Ardian Holding, a French société 
                                                 par actions simplifiée incorporated 
                                                 under the laws of the Republic 
                                                 of France under registration 
                                                 number 752 778 159 RCS Paris, 
                                                 having its registered office 
                                                 at 20 place Vendôme, 75001 
                                                 Paris, France; 
 Ardian LBO Fund VI B                           Ardian LBO Fund VI B S.L.P., 
                                                 a French société de 
                                                 libre partenariat incorporated 
                                                 under the laws of the Republic 
                                                 of France under registration 
                                                 number 819 701 889 RCS Paris, 
                                                 having its registered office 

                                                 at 20 place Vendôme, 75001 
                                                 Paris, France; 
 Assystem Technologies                          Assystem Technologies, a French 
                                                 société par actions 
                                                 simplifiée incorporated 
                                                 under the laws of the Republic 
                                                 of France under registration 
                                                 number 509 768 917 RCS Versailles, 
                                                 having its registered office 
                                                 at 23 place de Wicklow, 78180 
                                                 Montigny-le-Bretonneux, France; 
 AT Group                                       Assystem Technologies and its 
                                                 affiliated companies (verbundene 
                                                 Unternehmen) as defined in the 
                                                 German Stock Corporation Act 
                                                 (Aktiengesetz) from time to time; 
 Assystem Technologies Groupe                   Assystem Technologies Groupe, 
                                                 a French société par 
                                                 actions simplifiée incorporated 
                                                 under the laws of the Republic 
                                                 of France under registration 
                                                 number 831 178 785 RCS Versailles, 
                                                 having its registered office 
                                                 at 23 place de Wicklow, 78180 
                                                 Montigny-le-Bretonneux, France; 
 Assystem Technologies Services                 Assystem Technologies Services, 
                                                 a French société par 
                                                 actions simplifiée incorporated 
                                                 under the laws of the Republic 
                                                 of France under registration 
                                                 number 831 178 348 RCS Versailles, 
                                                 having its registered office 
                                                 at 23, place de Wicklow, 78180 
                                                 Montigny-le-Bretonneux, France; 
 Bidco                                          Weilchensee 884. V V GmbH, a 
                                                 limited liability company (Gesellschaft 
                                                 mit beschränkter Haftung) 
                                                 incorporated in Germany under 
                                                 the German Limited Liability 
                                                 Company Act (Gesetz betreffend 
                                                 die Gesellschaften mit beschränkter 
                                                 Haftung) and registered with 
                                                 the commercial register of the 
                                                 district court (Amtsgericht) 
                                                 of Munich with registered number 
                                                 HRB 236229; 
 Business Day                                   a day (other than a Saturday, 
                                                 Sunday, public or bank holiday 
                                                 in London, Paris or Cologne) 
                                                 on which banks are generally 
                                                 open for business in London, 
                                                 Paris and Cologne (other than 
                                                 solely for trading and settlement 
                                                 in Euro); 
 Code                                           the City Code on Takeovers and 
                                                 Mergers (which, for the avoidance 
                                                 of doubt, SQS and Bidco have 
                                                 agreed, to the extent and subject 
                                                 as set out in the Framework Agreement, 
                                                 that they will conduct themselves 
                                                 and the Offer as if the Offer 
                                                 were subject to it); 
 Closing Price                                  the closing middle market price 
                                                 of an SQS Share as derived from 
                                                 Bloomberg; 
 Conditions                                     the conditions of the Offer set 
                                                 out in Appendix 1 to this announcement 
                                                 and to be set out in the Offer 
                                                 Document; 
 Confidentiality Agreement                      the confidentiality agreement 
                                                 dated 30 October 2017 entered 
                                                 into between SQS, Ardian LBO 
                                                 Fund VI B represented by its 
                                                 management company Ardian France 
                                                 and Assystem Technologies (as 
                                                 amended), as described in paragraph 
                                                 20 of this announcement; 
 CREST                                          the securities system for paperless 
                                                 settlement of trades in securities 
                                                 and the holding of uncertificated 
                                                 securities operated by Euroclear; 
 Depositary                                     Computershare Investor Services 
                                                 Plc, acting in its capacity as 
                                                 registrar for SQS Depositary 
                                                 Interests; 
 Disclosed                                      (i) fairly disclosed in the annual 
                                                 report and accounts of SQS for 
                                                 the period ended 31 December 
                                                 2016; (ii) Publicly Disclosed; 
                                                 (iii) disclosed in this announcement; 
                                                 or (iv) fairly disclosed to Bidco 
                                                 or Bidco's financial, accounting, 
                                                 tax or legal advisers (specifically 
                                                 as Bidco's advisers in relation 
                                                 to the Offer) by or on behalf 
                                                 of SQS prior to the date of this 
                                                 announcement; 
 EBIT                                           earnings before interest and 
                                                 taxes; 
 Enlarged Group                                 the AT Group including the SQS 
                                                 Group following completion of 
                                                 the Offer; 
 Euro or EUR                                    the single European currency; 
 Euroclear                                      Euroclear UK & Ireland Limited, 
                                                 the operator of CREST; 
 FCA                                            the UK Financial Conduct Authority; 
 First Closing Date                             22 January 2018; 
 Form of Acceptance                             the form of acceptance and authority 
                                                 for use by SQS Shareholders who 
                                                 hold their SQS Shares directly 
                                                 in registered form in connection 
                                                 with acceptance of the Offer, 
                                                 which will accompany the Offer 
                                                 Document; 
 Framework Agreement                            the Framework Agreement dated 
                                                 13 December 2017 entered into 
                                                 between Bidco, Assystem Technologies, 
                                                 Ardian LBO Fund VI B represented 
                                                 by its management company Ardian 
                                                 France and SQS, as described 
                                                 in paragraph 20 of this announcement; 
 GmbH or Gesellschaft mit beschränkter     a limited liability company (Gesellschaft 
  Haftung                                        mit beschränkter Haftung) 
                                                 incorporated in Germany under 
                                                 the German Limited Liability 
                                                 Act (Gesetz betreffend die Gesellschaften 
                                                 mit beschränkter Haftung); 

 Letter of Intent                               the letter of intent dated 9 
                                                 November 2017 entered into between 
                                                 SQS, Ardian LBO Fund VI B represented 
                                                 by its management company Ardian 
                                                 France and Assystem Technologies 
                                                 (as amended), as described in 
                                                 paragraph 20 of this announcement; 
 London Stock Exchange                          London Stock Exchange plc; 
 Management Arrangements                        the equity participation arrangements 
                                                 in respect of the Senior Management 
                                                 Subscribers as described in paragraph 
                                                 13 of this announcement; 
 Numis                                          Numis Securities Limited; 
 Offer                                          the recommended all cash offer 
                                                 to be made by Bidco for SQS Shares 
                                                 not already owned, or agreed 
                                                 to be acquired, by Bidco, on 
                                                 the terms and subject to the 
                                                 conditions set out in this announcement 
                                                 and to the full terms and conditions 
                                                 to be set out in the Offer Document 
                                                 and, in respect of SQS Shares 
                                                 held directly in registered form, 
                                                 the Form of Acceptance and, where 
                                                 the context so requires, any 
                                                 subsequent revision, variation, 
                                                 extension or renewal of such 
                                                 offer; 
 Offer Document                                 the document to be sent to SQS 
                                                 Shareholders which will contain, 
                                                 amongst other things, the terms 
                                                 and conditions of the Offer; 
 Offer Period                                   the period commencing on 15 December 
                                                 2017 and ending on the earlier 
                                                 of the date on which the Offer 
                                                 becomes, or is declared, unconditional 
                                                 as to acceptances and/or the 
                                                 date on which the Offer lapses 
                                                 or is withdrawn (or such other 
                                                 date as Bidco and SQS may agree); 
 Offer Price                                    825 pence per SQS Share; 
 Open Market of Deutsche Börse             the Open Market (Freiverkehr) 
                                                 of Deutsche Börse AG, a 
                                                 market operated by the Frankfurt 
                                                 Stock Exchange; 
 Opening Position Disclosure                    an announcement containing details 
                                                 of interests or short positions 
                                                 in, or rights to subscribe for, 
                                                 any relevant securities of a 
                                                 party to the offer if the person 
                                                 concerned has such a position; 
 pound, GBP, pence or Sterling                  the lawful currency of the United 
                                                 Kingdom; 
 Publicly Disclosed                             fairly disclosed in any public 
                                                 announcement by SQS to any Regulatory 
                                                 Information Service prior to 
                                                 the date of this announcement; 
 registered or in registered form               in relation to an SQS Share, 
                                                 an SQS Share title to which is 
                                                 recorded in the shareholder register 
                                                 of SQS as being held directly 
                                                 in registered form; 
 Regulatory Information Service                 any information service authorised 
                                                 from time to time by the FCA 
                                                 or the German Federal Financial 
                                                 Supervisory Authority (as applicable) 
                                                 for the purposes of disseminating 
                                                 regulatory announcements; 
 Restricted Jurisdiction                        any jurisdiction where local 
                                                 laws or regulations may result 
                                                 in a significant risk of civil, 
                                                 regulatory or criminal exposure 
                                                 if information concerning the 
                                                 Offer is sent or made available 
                                                 to SQS Shareholders in that jurisdiction; 
 Rothschild                                     N M Rothschild & Sons Limited; 
 Stock Option Proposals                         the proposals to be made by Bidco 
                                                 to SQS Stock Option Participants; 
 SQS or the Company                             SQS Software Quality Systems 
                                                 AG, a stock corporation (Aktiengesellschaft) 
                                                 incorporated in Germany under 
                                                 the German Stock Corporation 
                                                 Act (Aktiengesetz) and registered 
                                                 with the commercial register 
                                                 of the district court (Amtsgericht) 
                                                 of Cologne with registered number 
                                                 HRB 12764; 
 SQS Boards                                     taken together, the SQS Supervisory 
                                                 Board and the SQS Management 
                                                 Board; 
 SQS Depositary Interest                        a dematerialised depositary interest 
                                                 which represents an entitlement 
                                                 to SQS Shares held by the Depositary 
                                                 on trust for the holders of such 
                                                 depositary interests; 
 SQS Group                                      SQS and its affiliated companies 
                                                 (verbundene Unternehmen) as defined 
                                                 in the German Stock Corporation 
                                                 Act (Aktiengesetz) as at the 
                                                 date of this announcement; 
 SQS Management Board                           the management board (Vorstand) 
                                                 of SQS as at the date of this 
                                                 announcement; 
 SQS Managing Directors                         members of the SQS Management 
                                                 Board as at the date of this 
                                                 announcement; 
 SQS Stock Options                              the options to acquire SQS Shares 
                                                 granted to participants pursuant 
                                                 to the SQS Stock Option Plans; 
 SQS Stock Option Participants                  any person who holds an option, 
                                                 warrant or award granted pursuant 
                                                 to the SQS Stock Option Plans; 
 SQS Stock Option Plans                         the SQS Stock Option Plan for 
                                                 the Management Board 2013 (governed 
                                                 by rules adopted by the general 
                                                 shareholders meeting of SQS on 
                                                 29 May 2013), the SQS Stock Option 
                                                 Plan for Key Employees 2013 (governed 
                                                 by rules adopted by the general 
                                                 shareholders meeting of SQS on 
                                                 29 May 2013) and the SQS Stock 
                                                 Option Plan for Management Board 
                                                 Members and Key Employees 2015 
                                                 (governed by rules adopted by 
                                                 the general shareholders meeting 
                                                 of SQS on 27 May 2015); 

 SQS Shareholders                               the holders of SQS Shares and 
                                                 including the holders of SQS 
                                                 Depositary Interests directly 
                                                 or indirectly; 
 SQS Shares                                     the unconditionally allotted 
                                                 or issued and fully paid up (or 
                                                 legally deemed as being fully 
                                                 paid up) non-par value registered 
                                                 shares (auf den Namen lautende 
                                                 nennwertlose Stückaktien) 
                                                 in the capital of SQS with a 
                                                 pro rata amount attributable 
                                                 to each share equaling EUR 1 
                                                 each ("Ordinary Share") (it being 
                                                 understood and agreed that, for 
                                                 the purposes of the Offer, an 
                                                 SQS Depositary Interest issued 
                                                 by the Depositary shall be deemed 
                                                 to be the Ordinary Share(s) held 
                                                 by the Depositary, as nominee, 
                                                 that is represented by such SQS 
                                                 Depositary Interest) and any 
                                                 such share which is issued and 
                                                 fully paid (or legally deemed 
                                                 as being fully paid up) before 
                                                 the date on which the Offer closes 
                                                 for acceptance (or such earlier 
                                                 time(s) and/or date(s) as Bidco 
                                                 may decide, subject to the Code, 
                                                 or with the agreement of SQS 
                                                 or the consent of the Code Committee 
                                                 (as defined in the Framework 
                                                 Agreement)), and "SQS Share" 
                                                 shall be construed accordingly; 
 SQS Supervisory Board                          the supervisory board (Aufsichtsrat) 
                                                 of SQS as at the date of this 
                                                 announcement; 
 SQS Supervisory Board Members                  members of the SQS Supervisory 
                                                 Board as at the date of this 
                                                 announcement; 
 Third Party                                    any central bank, government 
                                                 or governmental, quasi-governmental, 
                                                 supranational, statutory, regulatory, 
                                                 administrative, fiscal, or investigative 
                                                 body, authority (excluding any 
                                                 national antitrust or merger 
                                                 control authority), court, trade 
                                                 agency, association, institution 
                                                 or professional or environmental 
                                                 body, employee representative 
                                                 body or any other person or body 
                                                 whatsoever in any relevant jurisdiction; 
 United Kingdom or UK                           the United Kingdom of Great Britain 
                                                 and Northern Ireland; 
 United States or US                            the United States of America, 
                                                 its territories and possessions, 
                                                 any state of the United States 
                                                 of America, the District of Columbia 
                                                 and all other areas subject to 
                                                 its jurisdiction; 
 US$                                            US dollars, being the lawful 
                                                 currency of the US; and 
 US GAAP                                        generally accepted accounting 
                                                 principles in the US. 
 
 

All the times referred to in this announcement are London times, unless otherwise stated.

References to the singular include the plural and vice versa.

References in this announcement to any English legal term shall, in respect of any jurisdiction other than England or in respect of Bidco or any member of the SQS Group which is incorporated or operating in a jurisdiction other than England, be deemed to include what most nearly approximates in that jurisdiction to the English legal term.

References in this announcement to any German legal term, shall in respect of any jurisdiction other than Germany or in respect of any member of the SQS Group which is incorporated or operating in a jurisdiction other than Germany, be deemed to include what most nearly approximates in that jurisdiction to the German legal term.

All references to any statutory provision or law or to any order or regulation shall be construed as a reference to that provision, law, order or regulation as extended, modified, replaced or re-enacted from time to time and all statutory instruments, regulations and orders from time to time made thereunder or deriving validity therefrom.

This information is provided by RNS

The company news service from the London Stock Exchange

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December 15, 2017 02:09 ET (07:09 GMT)