Over Wire : OTW & ABB sign Scheme Implementation Deed

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ASX RELEASE

2 DECEMBER 2021

AUSSIE BROADBAND PROPOSES TO ACQUIRE OVER THE WIRE

IN A RECOMMENDED TRANSACTION

• OTW has entered into a Scheme Implementation Deed with ABB under which it is proposed that ABB will acquire 100% of the share capital in OTW by way of a recommended scheme of arrangement
• Scheme Consideration of $5.75 per OTW share which comprises $5.75 cash, or 1.1500 ABB shares1 or a combination of cash and ABB shares
• The offer value per OTW share represents:

1. an acquisition multiple of 11.8x EV/FY22E EBITDA2 based on OTW's FY22 EBITDA guidance of $33m

• 1. a 20.0% to 30.8% premium to OTW's 30 day VWAP to 21 October 20213,4 o a 28.7% to 40.3% premium to OTW's 60 day VWAP to 21 October 20213,4
• OTW directors unanimously recommend that OTW shareholders vote in favour of the Scheme and will vote their interests in favour of the Scheme subject to an independent expert concluding that the Scheme is in the best interests of OTW shareholders and in the absence of a superior proposal

Over the Wire Holdings Limited (OTW) is pleased to announce that it has entered into a Scheme Implementation Deed with Aussie Broadband Limited (ABB) under which ABB has agreed to acquire all of the issued shares in OTW by way of a scheme of arrangement (Scheme or Proposal).

The Scheme is unanimously recommended by the Board of OTW and each OTW director intends to cause any OTW shares which they own or control to be voted in favour of the Scheme, subject to a superior proposal not materialising and an independent expert concluding that the Scheme is in the best interests of OTW shareholders.

1. Assumes $5.00 per ABB share.
2. Enterprise value calculated on an implied fully diluted market capitalisation (equity value) of approximately $344.0m (59,820,564 OTW fully diluted shares outstanding (inclusive of vested performance rights, unvested performance rights, 2021 employee share option plan grants and FY22 performance rights grants) multiplied by $5.75 per OTW share) plus net debt of $46.4m as at 30 June 2021 (inclusive of lease liabilities and deferred consideration).
3. Being the undisturbed share price prior to OTW's announcement on 22 October 2021 regarding the receipt of ABB's proposal.
4. See "Implied value of Over the Wire offer" section for a description of the range of premiums arising from different Scheme Consideration options.

Over the Wire Holdings Limited	ABN: 89 151 872 730
Level 24, 100 Creek St, Brisbane, QLD 4000, Australia
P: 1300 689 689 I: [phone]	W: www.overthewire.com.au

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OTW Chair, Stephe Wilks said "We admire the Aussie Broadband business' strong ambitions and proven execution, and we are excited about the compelling customer propositions that OTW and ABB can bring to market together".

Having co-founded the business in 2005, Michael Omeros, Managing Director and Group CEO of OTW said "This is an exciting next step in the OTW journey, and I am very proud of what the OTW team has built over the years which is reflected in this compelling proposal for the company".

ABB co-founder and Managing Director, Phillip Britt, said the company is thrilled to reach this milestone. "We believe Over the Wire is a great match to complement our current range of services. It's a high quality business in a large and growing segment of the Australian telecommunications market."

"After several weeks of getting to know the company's senior team, we very much look forward to welcoming OTW to the Aussie Broadband family".

Overview of the Scheme

Under the terms of the Scheme, OTW shareholders will have the option to receive consideration representing $5.75 per OTW share (Scheme Consideration) in one of four ways:

• 80% cash consideration and 20% scrip consideration (Default Option) equating to $4.60 cash and 0.2300 ABB shares for each OTW share;
• 100% cash consideration equating to $5.75 cash per OTW share (Cash Consideration);
• 100% scrip consideration equating to 1.1500 ABB shares for each OTW share (Scrip Consideration); or
• at least 1% but less than 100% scrip consideration with the balance payable as cash consideration (Mix and Match Consideration)

OTW shareholders who do not make an election or who make an invalid election, will receive the Default Option.

The value of ABB shares for the purposes of determining the number of ABB shares to be issued under the Default Option, Scrip Consideration and Mix and Match Consideration options above has been agreed at $5.00 per ABB share, and compares with the last close of ABB's share price of $5.45 on 1 December 2021.

The Scheme Consideration is subject to the maximum total cash consideration payable by ABB not exceeding approximately $275m (Maximum Cash Consideration) representing 80% of the total Scheme Consideration and the maximum total ABB scrip consideration not exceeding approximately 40m ABB shares (Maximum Scrip Consideration) representing 57.5% of the total Scheme Consideration.

If OTW shareholders elect to receive Scheme Consideration comprising aggregate total cash consideration that exceeds the Maximum Cash Consideration, then each OTW shareholder that has elected to receive cash (or by the terms of the Scheme are required to receive cash) will have

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their cash consideration scaled back and receive approximately 0.0020 ABB shares for each 1 cent of cash scaled back.5 Alternatively, if OTW shareholders elect to receive Scheme Consideration comprising aggregate total scrip consideration that exceeds the Maximum Scrip Consideration, then each OTW shareholder who elects to receive scrip (or by the terms of the Scheme are required to receive scrip) will have their scrip consideration scaled back and receive approximately 1 cent of cash for each 0.0020 ABB Shares scaled back.

Implied value of Over the Wire offer

The Scheme Consideration equates to a total offer value of $5.75 per OTW share under each of the options above, assuming that each ABB Share is valued at $5.00. This implies a 20.0% premium to OTW's 30 day VWAP of $4.79 to 21 October 20216, and a 28.7% premium to OTW's 60 day VWAP of $4.47 to 21 October 2021.

However, based on ABB's closing share price of $5.45 on 1 December 2021, the Scheme Consideration represents the following total implied value for OTW shareholders under the following options (noting that the Cash Consideration Option and Scrip Consideration Option are both subject to scale-backs):

• Default Option: $5.85 per OTW share, representing a 22.1% premium to OTW's 30 day VWAP to 21 October 2021 and a 31.0% premium to OTW's 60 day VWAP to 21 October 2021
• Cash Consideration Option: $5.75 per OTW share, representing a 20.0% premium to OTW's 30 day VWAP to 21 October 2021 and a 28.7% premium to OTW's 60 day VWAP to 21 October 2021
• Scrip Consideration Option: $6.27 per OTW share, representing a 30.8% premium to OTW's 30 day VWAP to 21 October 2021 and a 40.3% premium to OTW's 60 day VWAP to 21 October 2021

Shareholders that choose to receive all or part of their Scheme Consideration in ABB shares should note that ABB's share price may rise or fall before the Scheme Implementation Date, currently expected to take place in the first quarter of calendar year 2022.

Benefits of the Scheme

The Scheme provides compelling value to OTW shareholders. Assuming a total offer value of $5.75 per OTW share, the Proposal represents:

• an acquisition multiple of 11.8x EV/FY22E EBITDA7 based on OTW's FY22 EBITDA guidance of $33m; and
• an offer value that exceeds the highest closing share price of OTW shares of $5.64 (on 12 November 2018) since listing on the ASX on 3 December 2015.

1. Excluding Foreign Scheme Shareholders as defined in the Scheme Implementation Deed.
2. Refer to footnote 3 above.
3. Refer to footnote 2 above.

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For those OTW shareholders who elect to receive cash consideration, depending on the extent of any scale-back, they will receive either full or partial cash certainty of value for their OTW shares.

For those OTW shareholders who elect to receive all or part of their consideration in ABB shares, they will benefit from the following:

• exposure to a significantly larger and diversified company, with a strong growth profile;
• share in the value creation from synergies as a result of the combination of two highly complementary businesses, noting that the Scheme is expected to deliver annual cost synergies of $8-12m within 3 years; and
• enhanced trading liquidity through a broadened shareholder base, and potential for enhanced analyst coverage and inclusion in the S&P/ASX200 index.

Governance

Michael Omeros, current Managing Director and Group CEO of OTW, will join the ABB Board upon completion of the transaction, replacing John Reisinger who will step down as a director at the completion of transaction, but will remain as a senior executive with ABB.

Scheme Implementation Agreement

OTW and ABB have entered into the attached Scheme Implementation Deed which contains customary terms and conditions on which OTW and ABB will implement the transaction. The conditions to the Scheme include OTW shareholder approval, Court approval, the independent expert concluding the Scheme is in the best interests of OTW shareholders, no material adverse change affecting OTW, no prescribed occurrence in relation to either OTW or ABB, OTW maintaining certain key customers and management and other customary conditions.

The Scheme Implementation Deed may be terminated in certain circumstances, including by OTW if ABB's share price falls by 17.5%8 or more after the date of the Scheme Implementation Deed relative to movements in the S&P/ASX 200 index and subject to minimum volumes of ABB shares being traded.

The Scheme Implementation Deed also includes customary exclusivity arrangements in favour of ABB (including "no shop", "no talk" and "no due diligence" restrictions and notification provisions, with the "no talk" and "no due diligence" restrictions subject to a fiduciary out where required), and certain matching rights for ABB.

8 Relative to the ABB share price of $5.00.

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Indicative Timetable and next steps

OTW shareholders do not need to take any action in relation to the Scheme at this stage.

A Scheme Booklet containing information regarding the Scheme, reasons for OTW Directors' recommendation, an Independent Expert's Report and details of the Scheme will be sent to OTW shareholders in due course.

It is anticipated that the Scheme will be completed in the first quarter of calendar year 2022.

OTW FY22 Guidance

In addition to the 15% organic recurring revenue growth expectations provided to market, OTW advises that it anticipates FY22 EBITDA of $33m.

Advisers

OTW is being advised by Macquarie Capital (Australia) Limited as exclusive financial adviser and McCullough Robertson as legal counsel.

ABB is being advised by Findex Corporate Finance as financial adviser and Gadens as legal counsel.

This document is authorised for release by the Board.

For further information, please contact:

Mike Stabb Company Secretary [phone] [e-mail]

About Over the Wire Holdings Limited

Over the Wire Holdings Limited (ASX: OTW) is an ASX listed telecommunications, cloud and IT solutions provider that has a national network with points of presence in all major Australian capital cities and Auckland, NZ. The company offers an integrated suite of products and services to business customers including Data Networks and Internet, Voice, Data Centre co-location, Cloud and Managed Services.

Over the Wire Holdings Limited companies include Over the Wire, NetSIP, Faktortel, Sanity Technology, Telarus, VPN Solutions, Access Digital Networks, Comlinx, Zintel Communications, Fonebox and Digital Sense.

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