ASSYSTEM_Registration_Document_2017

MANAGEMENT REPORT

BUSINESS OVERVIEW

3.1.2 SIGNIFICANT EVENTS OF THE YEAR 2017 marked a turning point in the Group’s history, with the transfer of control of GPS and the acquisition of an ownership interest in Framatome. TRANSFER OF CONTROL OF THE GLOBAL PRODUCT SOLUTIONS (GPS) DIVISION 1/ Reasons for the transaction In early 2017, the private equity firm, Ardian, put forward an unsolicited expression of interest for the acquisition of Assystem’s GPS division. Assystem considered this opportunity very carefully and came to the conclusion that in view of the fast-paced consolidation taking place in the R&D sector (see Section 3.1.1.1 above – Market trends) such an acquisition could be advantageous for GPS. Its reasoning was that the transaction would give GPS access to Ardian’s resources and expertise in terms of driving the growth of its equity interests and particularly in identifying, financing and integrating acquisitions. As a result, Assystem decided to agree in principle to Ardian's suggestion set out in its expression of interest, provided that it could take a 40% ownership interest in the acquisition company in order to share in the value creation potential of a build-up strategy. Based on this understanding, Assystem allowed Ardian to carry out the customary due diligence procedures during the first few months of 2017, following which Ardian issued an offer that valued all of GPS’s activities at €550 million and confirmed that Assystem could take a 40% ownership interest in the acquisition entity. 2/ Implementation On 9 May 2017, having examined the deal and the main components of the draft memorandum of understanding, Assystem’s Board of Directors unanimously decided to recommend to the Company’s shareholders that they vote in favour of the offer, including Assystem's potential 40% ownership interest in the acquisition entity. On the same date, HDL Development – Assystem’s controlling shareholder – confirmed its unconditional support for the deal. Consequently, on 11 May 2017 Assystem published a press release announcing that it had entered into a memorandum of understanding with Ardian. In June 2017, the Company obtained the opinion of its employee representative bodies as required by the applicable legislation, and in accordance with the recommendation of the AFEP-MEDEF Code, on 5 July 2017 the deal was put to the vote of Assystem’s shareholders in an Ordinary General Meeting. It was approved by 99.6% of the shareholders present or represented at this meeting. Clearance was received from the relevant competition authorities on 18 August 2017. The deal was closed on 28 September 2017, and on the same date, Assystem invested €124.28 million in equity and quasi-equity financing raised by Assystem Technologies Groupe (ATG) – the parent of the new group comprising the entities that previously constituted GPS – in order to help finance the acquisition of GPS. Following this transaction, Assystem held 39.24% of ATG’s equity and quasi-equity (and 39.23% of its ordinary shares) alongside its majority shareholder

which is a fund managed by Ardian. The overall investment took the form of €62.14 million worth of ordinary shares and €62.14 million worth of convertible bonds paying an annual coupon of 9% which is

capitalisable each year. 3/ Accounting treatment

In application of IFRS 5, GPS's profit for the period from 1 January to 28 September 2017, as well as the net disposal gain after transaction costs and taxes, have been included under “Profit from discontinued operations” in the 2017 financial statements. Since 1 October 2017, ATG’s consolidated profit has been accounted for by the equity method and included in a separate line of Assystem’s consolidated income statement, based on its 39.23% equity investment in ATG. The interest received on the convertible bonds issued by ATG and taken up by Assystem has also been recognised in a separate line of Assystem’s consolidated income statement. SHARE BUYBACK OFFER On 11 May 2017, Assystem announced its intention to allocate at least €200 million (i.e. around 50% of the proceeds of the sale of GPS, net of the reinvestment in ATG and the transaction costs incurred on the deal) to a public share buyback offer scheduled to be launched during the quarter following the close of the GPS deal. The idea was to structure the buyback in such a way that the respective holdings of HDL Development and the free float would remain unchanged after the transaction. When the offer was announced it involved a total of €225 million, corresponding to 6 million shares purchased at a unit price of €37.50, as validated by an independent valuer appointed by the Board of Directors. The French securities regulator (the AMF) approved the information memorandum on 31 October 2017 and the Board of Directors called an Extraordinary General Meeting held on 22 November 2017 at which 99.96% of the shareholders present or represented approved the offer. The offer period then ran from 24 November to 14 December 2017 (inclusive). On 19 December 2017, Assystem announced that it had bought back 6 million of its own shares with a par value of €1 each, for a total €225 million. These shares represented 27.00% of the number of shares making up Assystem’s capital and 28.35% of the number of Assystem shares outstanding (i.e. the number of shares making up the capital less the number of shares held in treasury). All of the shares bought back under the offer were cancelled on 21 December 2017, together with 550,000 shares already held in treasury, by way of a decision taken by Assystem’s Chairman and Chief Executive Officer acting under powers delegated to him by the Board of Directors. Consequently, the Company’s capital was reduced to 15,668,216 shares with a par value of €1 each. INVESTMENT IN FRAMATOME As announced on 11 May 2017, Assystem used another portion of the net proceeds received from the transfer of control of GPS to purchase a 5% interest in Framatome (formerly “New NP”) for €123.7 million.

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ASSYSTEM

REGISTRATION DOCUMENT 2017