Acquisitions

Acquisition Strategy

1. Introduction

Bateman Engineering N.V. has made a strategic decision to actively pursue acquisitions as a source of growth, and has raised money from the public to do so. This document defines the acquisition strategy. This is a living document that will be updated as our business evolves.

2. Acquisition Criteria

We will generally seek acquisitions that meet the following criteria:

Complementary to our:

• Execution centres
• Technologies
• Markets (both commodities and regions)

Represent a strong strategic and operating fit

Easy to integrate

• Healthy corporate culture
• Low risk
• Well run with little management intervention required
• Management and clients support the idea of an acquisition by Bateman

Not a turnaround situation

High intellectual property content

3. Conservatively financed:

We will only make acquisitions which are conservatively financed. This implies that we will pay with:

• Cash designated for acquisitions;
• Equity or an equity-linked instrument;
• Little to no debt - unless warranted by the individual circumstances.

4. Ensure key management retention:

Bateman is targeting only well run companies, and we would seek to compensate and retain key managers in the acquired companies by:

• Giving job security based on long term employment contracts;
• Buying management’s shares in a payout program where the price will be based in part on future results;
• Enabling managers to participate in the Bateman option plan; and
• Endeavoring to retain  the brand name and autonomy of the entity acquired, limiting the corporate overhead burden to the lowest appropriate level.

5. Screening Process

After identifying targets and confirming that existing management is interested in discussions, a thorough screening process will be carried out in a phased manner with “hold” or “abort” points, before we proceed with any offers. Elements of this screening process will include:

• review of financial position and preliminary assessment of financial attractiveness;
• strategic fit and potential structure within Bateman;
• technical review of marketing strategy, IP and technology strategy, overall business plans, operating methodologies and labour policies;
• In-depth financial, technical, legal, commercial and human resources due diligence

6. Contacts

Communications regarding possible transactions should be directed to any of the following:

Pieter du Plessis
Chief Financial Officer
Direct:  +31 (0) 20 502 2370
Mobile: +41 55 451 9010
Email: Pieter.duPlessis@BatemanEngineering.com

Steve Burks
Chief Technology Officer
Direct:  +31 (0) 20 502 2370
Mobile: +27 (0) 82 377 9608
Email: Steve.Burks@BatemanEngineering.com

Johan Robbertse
Corporate Finance Manager
Direct: +27 (0) 11 899 2068
Mobile: +27 (0) 82 495 3844
Email: Johan.Robbertse@BatemanEngineering.com