13 April 2018 AMA Group to Demerge Automotive Component, Accessory and Procurement Business and enter A$508M Transaction with Blackstone for Vehicle Panel Repair Business • AMA to demerge its Automotive Component, Accessory and Procurement Business • Blackstone agrees to acquire the Vehicle Panel Repair Business • If both transactions are implemented, AMA Group shareholders will receive: • shares in the newly listed Automotive Component, Accessory and Procurement Business on a one-for-one basis; and • 86c in value for their shares in the Vehicle Panel Repair Business in their choice of either all cash consideration or a mix of cash and unlisted scrip consideration • AMA Group Directors unanimously recommend shareholders vote in favour of both transactions, in the absence of a superior proposal and subject to the Independent Expert concluding that the transactions are in the best interests of AMA shareholders AMA Group Limited (“AMA Group”, AMA.AX) is pleased to announce that it has today entered into two transactions that will lead to: • the demerger of its Automotive Component, Accessory and Procurement Business (referred to hereafter as the “ACAD Business”) (the “Demerger”); and • the subsequent purchase of the post-Demerger AMA Group and its remaining vehicle panel repair business (“Panel Business”) by funds advised by leading global private equity asset manager, Blackstone, for an enterprise value of A$508 million (the “Blackstone Proposal”). Both transactions will be effected by way of Scheme of Arrangement and will be subject to approval by AMA shareholders. THE DEMERGER Summary Under the first transaction, AMA Group will demerge its ACAD Business into a new company to be listed on the Australian Securities Exchange (the “ASX”). AMA Group shareholders at the time of the Demerger will receive one share in the new ACAD Business company for each share they own in AMA Group. The AMA Group Board expects that at the time of Demerger, the ACAD Business will have an initial value per share in the range of 32-36 cents. AMA Group Limited (ABN 50 113 883 560) Level 7,420 Collins Street, Melbourne, Victoria, 3000 Australia www.amagroupltd.com Tel: + 61 7 3897 5780 Fax + 61 7 3283 1168 Rationale The AMA Group Board is proposing the Demerger in pursuit of the following specific benefits: • To allow each business to adopt a capital structure that is most appropriate for its scale, operations and strategic objectives. • To enable the ACAD Business to gain access to new capital sources; for example, capital from investors that are attracted by the return profile of the business, which will, in turn, enable it to further exploit growth opportunities. • To allow management of each business to focus on the core competencies of the separate businesses. Importantly, as part of the Demerger process, the consumables and parts procurement function (“Procurement Business”) of the panel repair business will become part of the ACAD Business, reflecting the true nature of the operation. This procurement capability has delivered significant cost savings for the Panel Business’s major customers, the auto insurance companies, and has in turn, driven the rapid growth of the Panel Business. AMA considers that the potential to expand future revenue streams for the ACAD Business are promising and it is well positioned to benefit from global opportunities. In the event that the Panel Business is acquired under the Blackstone Proposal, the development of ACAD’s Procurement Business will be considerably de-risked and accelerated by a ten year product sourcing agency agreement between the ACAD Business and the Panel Business. Under this product sourcing agreement the Panel Business (after being acquired by Blackstone) intends to work with potential customers, including Blackstone Group portfolio companies, to develop mutually beneficial product supply arrangements. As part of the agreement, the Panel Business will guarantee the ACAD business A$12 million of product sourcing agency fees (A$6 million in Year 1, A$4 million in Year 2, and A$2 million in Year 3). This obligation will be reduced in line with the sourcing agency fees received by any customers referred by the Panel Business in the relevant period. The parties may terminate the Demerger in certain limited circumstances, including where the Australian Taxation Office does not grant specific demerger relief under Australian taxation laws. Board Recommendation The AMA Group Board unanimously recommends that shareholders vote in favour of the proposed Demerger at the relevant Demerger scheme meeting subject to the Independent Expert concluding (and continuing to conclude) that the Demerger is in the best interests of AMA Group shareholders. Each AMA Group Director intends to vote, or cause to be voted, all the AMA Group shares in which they have a relevant interest in favour of the Demerger in the absence of a proposal that is superior to the Demerger and subject to the Independent Expert concluding (and continuing to conclude) the Demerger is in the best interests of AMA shareholders. Comment AMA Executive Chairman, Ray Malone, said “Today is an important point in the development of AMA Group. The Board has decided to address the challenge of funding two growing but distinct businesses by separating the ACAD Business in to a new ASX listed company; with each business having its own management team, growth plans and funding strategy. This separation will ensure that neither business has its prospects limited by the competing demands of the other business for board and management attention and financial resources. Each business will be able to realise its full potential with significant benefits to customers, employees and shareholders. “I am especially excited about the prospects of the new Procurement Business. AMA Group is truly a global leader in sourcing consumables for the vehicle panel repair industry. This is reinforced by our well advanced discussions with a number of large international vehicle panel repair industry consolidators about servicing their consumables and parts needs. Based on the significant potential 2 cost savings for international vehicle panel repair operators, we expect to rapidly grow this new business.” Implementation The Demerger will be effected by means of a Scheme of Arrangement and will be separately assessed by an Independent Expert. The Demerger is not conditional on the Blackstone Proposal being implemented. THE BLACKSTONE PROPOSAL Summary If the Demerger is approved by shareholders and the Court, AMA has agreed to implement the Blackstone Proposal. Under the Blackstone Proposal, the shareholders of AMA Group will have their shares in the remaining AMA Group (which will then be the holding company of the Panel Business) acquired by Blackstone advised funds for 86 cents per share, which equates to an enterprise value of A$508 million or 10.7x projected pro forma normalised EBITDA for the year ending June 30, 2018. The total enterprise value assumes deferred acquisition consideration and net debt for the AMA Group of $72m (less $22.5 million which will be assumed by the demerged ACAD Business). Consideration alternatives Under the Blackstone Proposal AMA Group shareholders will be given the option to elect to receive all cash consideration of 86 cents per share or a combination of cash and shares in Queen TopCo Pty Limited (“TopCo”), a newly incorporated unlisted company formed by Blackstone advised funds to undertake the acquisition of AMA Group. The Blackstone Proposal recognises that AMA Group shareholders may wish to have an ongoing indirect interest in the Panel Business in varying degrees, so it is offering two mixed consideration alternatives with different ratios of cash to TopCo shares. AMA Group shareholders will be entitled to elect to receive: • All Cash Consideration: 86 cents cash per share; or • Mixed Alternative 1: 40% cash and 60% TopCo shares to the total value of 86 cents per share; or • Mixed Alternative 2: 95% cash and 5% TopCo shares to the total value of 86 cents per share. Both mixed consideration alternatives will be subject to a scale back to ensure the total number of shares issued does not exceed 22% of the total shares on issue in TopCo. AMA Group shareholders whose address is in a place outside Australia and its external territories or New Zealand will not be entitled to be issued with new TopCo shares and will instead be deemed to receive the All Cash Consideration option. The Blackstone Proposal is subject to various conditions including that AMA Group shareholders holding at least 13% of the AMA shares on issue elect to receive the Mixed Alternative 1. The following persons who together hold 14.1% of the AMA shares on issue have indicated to AMA that they, either directly or through their respective associates, intend to vote in favour of the Blackstone Proposal at the relevant acquisition scheme meeting in the absence of the AMA Group Board recommending a superior proposal and subject to an Independent Expert concluding (and continuing to conclude) that the Blackstone Proposal is in the best interests of AMA Shareholders, and intend to elect to receive the Mixed Alternative 1: Joe Walsh (1.8%), Andy Hopkins (9.5%), Peter Bubeck (1.1%), Mark Reid (0.1%), Chris Sjodin (0.2%), Frank Crispo (1.0%) and Dario Ferella (0.4%). 3 The Blackstone Proposal is also subject to the condition that AMA Shareholders holding at least 12% of the AMA shares on issue elect to receive the Mixed Alternative 2. Ray Malone, who has a relevant interest in 14.6% of the AMA shares on issue, has indicated to AMA that he, either directly or through his respective associates, intends to vote in favour of the Blackstone Proposal at the relevant acquisition scheme meeting in the absence of the Board recommending a superior proposal and subject to an Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of AMA Shareholders, and intends to elect to receive the Mixed Alternative 2. AMA Group shareholders that elect to receive shares in TopCo will become parties to the TopCo Shareholders Deed, which is included as a schedule to the Scheme which is itself a schedule to the attached Scheme Implementation Deed (“SID”). Under the terms of the TopCo Shareholders Deed, TopCo shareholders will have different voting and other rights to those currently applicable to AMA Group ordinary shares. Further details in relation to these consideration alternatives will be provided to shareholders in due course in the scheme booklet. Board Recommendation The AMA Group Board has considered the Blackstone Proposal in detail and unanimously recommends that shareholders vote in favour of the Blackstone Proposal at the relevant acquisition scheme meeting in the absence of a superior proposal and subject to the Independent Expert concluding (and continuing to conclude) the Blackstone Proposal is in the best interests of AMA shareholders. Each AMA Group Director intends to vote, or cause to be voted, all the AMA Group shares in which he has a relevant interest in favour of the Blackstone Proposal in the absence of a superior proposal and subject to the Independent Expert concluding (and continuing to conclude) the Blackstone Proposal is in the best interests of AMA shareholders. Comment AMA Group Vehicle Panel Repair CEO, Andrew Hopkins, who will continue as CEO of the Panel Business post an acquisition by Blackstone, said “Over the past two years, we have rapidly grown our vehicle panel repair operations to over 100 sites and in the process fundamentally changed the way the industry engages with its primary customers, the automotive insurance companies, to the ultimate benefit of their customers, the insurance policyholders. Taking the business private will increase our senior management team’s focus and allow us to further improve our cost competitiveness; in the process, strengthening our insurer customer relationships. Throughout the transaction diligence period we have been very impressed by Blackstone’s level of understanding of our business and their willingness to embrace our plans for growing and improving the operations. We are excited about them partnering with us for the next stage of our development.” Blackstone Managing Director, Jonathan Chamberlain, said “We are excited about investing in Australia’s leading panel repair network, and to be partnering with Andrew Hopkins and the management team. As the owners of one of the leading panel repair businesses in the United States, Service King, Blackstone understands the industry and the opportunities and challenges ahead for the business.” Implementation The implementation of the Blackstone Proposal is subject to a number of customary conditions including the approval of AMA Group shareholders and the Court, no material adverse change or prescribed occurrence taking place, obtaining certain material third party consents as well as the approval of Australia’s Foreign Investment Review Board (“FIRB”). An application for such approval will be submitted by Blackstone to FIRB for its consideration. Blackstone has advised AMA Group that the Blackstone Proposal is fully funded on customary terms. 4 The SID contains customary exclusivity provisions including no shop and no talk restrictions, a notification obligation, a matching right, and a restriction on the Board changing their Recommendation or withdrawing their support for the offer, subject to AMA Group Directors’ fiduciary obligations. The SID also details circumstances under which a break fee may be payable to Blackstone, or a reverse break fee payable to AMA Group. A copy of the SID is attached to this announcement. INDICATIVE TIMETABLE AND NEXT STEPS FOR BOTH TRANSACTIONS AMA Group shareholders do not need to take any action at the present time. An Explanatory Booklet containing information relating to the Demerger, and a separate Explanatory Booklet containing information relating to the Blackstone Proposal, including the consideration alternatives and the reasons for the Directors’ unanimous recommendations, as well as Independent Expert’s reports are expected to be sent to shareholders in July 2018 with shareholder meetings to consider the proposed Demerger and Blackstone Proposal (subject to court approval) planned for August 2018. AMA Group is being advised on the transaction by Gilbert + Tobin, PwC, Colinton Capital Partners and Nicholson Ryan Lawyers. Blackstone is being advised on the transaction by Ashurst, Deloitte and UBS AG. 5 Attachment Acquisition Scheme Implementation Deed 6 Acquisition scheme implementation deed Queen BidCo Pty Limited Queen TopCo Pty Ltd AMA Group Limited Contents Page 1 Defined terms and interpretation 3 2 Objectives and acknowledgements 3 3 Conditions precedent 4 4 Acquisition Scheme and Acquisition Scheme Consideration 11 5 Implementation 13 6 Public announcements 28 7 Board support of Transaction 29 8 Exclusivity 30 9 AMA Break Fee 34 10 Blackstone Break Fee 36 11 Representations and Warranties 37 12 Releases 43 13 Termination 45 14 Confidentiality 47 15 Duty, costs and expenses 47 16 GST 47 17 General 48 Schedule 1 Dictionary 52 Schedule 2 AMA capital structure 67 Execution page 68 Attachment A Timetable 70 Attachment B Acquisition Scheme 72 Attachment C Acquisition Deed Poll 73 Attachment D Shareholders Agreement 74 Gilbert + Tobin page | i Date: 12 April 2018 Parties 1 Queen BidCo Pty Ltd ACN 624 151 079 of c/- Seed Outsourcing Pty Ltd, Level 7, Suite 6, 122 Arthur Street, North Sydney NSW 2060 (Blackstone); 2 Queen TopCo Pty Ltd ACN 624 140 441 of c/- Seed Outsourcing Pty Ltd, Level 7, Suite 6, 122 Arthur Street, North Sydney NSW 2060 (TopCo); and 3 AMA Group Limited ACN 113 883 560 of Level 7, 420 Collins Street, Melbourne VIC 3000 (AMA). Background A AMA has agreed to propose a members’ scheme of arrangement pursuant to which Blackstone will acquire all the Acquisition Scheme Shares, and AMA, TopCo and Blackstone have agreed to implement the Acquisition Scheme on the terms and conditions of this deed. B Blackstone has agreed to assist AMA in proposing the Acquisition Scheme. The parties agree 1 Defined terms and interpretation 1.1 Definitions in the Dictionary A term or expression starting with a capital letter: (a) which is defined in the Dictionary in Schedule 1 (Dictionary), has the meaning given to it in the Dictionary; (b) which is defined in the Corporations Act, but is not defined in the Dictionary, has the meaning given to it in the Corporations Act; and (c) which is defined in the GST Law, but is not defined in the Dictionary or the Corporations Act, has the meaning given to it in the GST Law. 1.2 Interpretation The interpretation clause in Schedule 1 sets out rules of interpretation for this deed. 2 Objectives and acknowledgements 2.1 Acknowledgement and objectives The parties acknowledge and agree that: (a) the general effect of the Demerger Scheme will be to restructure AMA to effect the separation of ACAD as a standalone, separate ASX-listed entity on the Demerger Implementation Date such that the non-ACAD related assets and liabilities will continue to be held and operated by the existing ASX-listed AMA entity after the Demerger Implementation Date; Gilbert + Tobin page | 3 (b) the Demerger Scheme will not be subject to or conditional on the Acquisition Scheme becoming Effective; (c) the Acquisition Scheme will be conditional on the Demerger Scheme coming into effect under section 411(10) of the Corporations Act; (d) the general effect of the Acquisition Scheme will be that, subject to the Acquisition Scheme becoming Effective, AMA (following the Demerger) will be acquired by, and become a wholly owned subsidiary of, Blackstone in consideration for Blackstone and TopCo paying the Acquisition Scheme Consideration for each Acquisition Scheme Share held at the Acquisition Record Date; and (e) their objective in entering into this deed is to facilitate the implementation of the Acquisition Scheme. 2.2 Proposal of Demerger Scheme AMA agrees to propose the Demerger Scheme to its members in accordance with Part 5.1 of the Corporations Act and on and subject to the terms and conditions of the Demerger Implementation Deed, the Demerger Scheme of Arrangement and the Demerger Deed Poll and, subject to clause 2.4 of the Demerger Implementation Deed, in accordance with the Demerger Timetable. 2.3 Proposal of Acquisition Scheme (a) AMA agrees to propose and implement the Acquisition Scheme to its members in accordance with Part 5.1 of the Corporations Act and on and subject to the terms and conditions of this deed and, subject to clause 2.4, in accordance with the Timetable. (b) Blackstone agrees to assist AMA in proposing and implementing the Acquisition Scheme on and subject to the terms and conditions of this deed. 2.4 Timetable (a) The parties must take all reasonable steps to implement the Acquisition Scheme substantially in accordance with the Timetable. (b) The parties acknowledge the timetable is an indicative timetable and will consult with each other regularly in relation to: (i) performing their respective obligations by their respective due dates set out in the Timetable; and (ii) any need to modify the Timetable. 3 Conditions precedent 3.1 Conditions Precedent Subject to this clause 3, the Acquisition Scheme will not become Effective, and the obligations of Blackstone and TopCo to provide, or procure the provision of, the Acquisition Scheme Consideration in accordance with the Deed Poll and clause 4.1(b) will not be binding, until and unless the following Conditions Precedent are satisfied or waived in accordance with clause 3.3: Gilbert + Tobin page | 4