Execution of the preliminary sale agreement concerning the acquisition of 100% of the shares in the share capital of the Polish subsidiaries of Nexity S.A., with its registered office in Paris

The Management Board of Develia S.A. (the “Issuer” or the “Company”) announces that on 1 June 2023, the Company, acting as the buyer, entered into a preliminary sale agreement (the “Preliminary Agreement”) with Nexity S.A., a joint stock company incorporated and existing under the laws of France, with its registered office in Paris (the “Seller”) regarding acquisition by the Issuer of 100% of the shares in the share capital of 19 Polish limited liability companies being subsidiaries of the Seller (the “Transaction”): (i) Nexity Polska sp. z o.o., (ii) Nexity Polska 303 sp. z o.o., (iii) NP 7 sp. z o.o., (iv) NP 8 sp. z o.o., (v) NP 9 sp. z o.o., (vi) NP 10 sp. z o.o., (vii) NP 15 sp. z o.o., (viii) NP 16 sp. z o.o. (ix) NP 11 sp. z o.o., (x) NP 12 sp. z o.o., (xi) NP 14 sp. z o.o., (xii) NP 17 sp. z o.o., (xiii) NP 18 sp. z o.o., (xiv) NP 19 sp. z o.o., (xv) NP 20 sp. z o.o, (xvi) NP 21 sp. z o.o., (xvii) NP 22 sp. z o.o., (xviii) NP 23 sp. z o.o., and (xix) NP 24 sp. z o.o., all having its registered seat in Warsaw (the “Acquired Companies”).

Within the Transaction, the Issuer will additionally take control over 10 limited partnerships (whose limited and general partners are Acquired Companies), conducting development activity in Poland: (i) NP 11 sp. z o.o. sp. k. (carrying out the Project Next Ursus at Posag 7 Panien Street in Warsaw), (ii) NP 12 sp. z o.o. sp. k. (which completed the Project Golden Space at Budki Szczęśliwickie Street in Warsaw), (iii) NP 14 sp. z o.o. sp. k. (carrying out the Project Bemowo Line at Szeligowska Street in Warsaw), (iv) NP 18 sp. z o.o. sp. k. (currently not developing any project), (v) NP 19 sp. z o.o. sp. k. (carrying out the Project Malta Point at Brneńska Street in Poznań), (vi) NP 20 sp. z o.o. sp. k. (carrying out the Project City Vibe at Myśliwska Street in Kraków), (vii) NP 21 sp. z o.o. sp. k. (which completed the Project La Praga at Radzymińska Street in Warsaw), (viii) NP 23 sp. z o.o. sp. k. (which completed the Project Bliski Marcelin at Jeleniogórska Street in Poznań), (ix) NP 8 sp. z o.o. sp. k. (carrying out the Project Bemosphere at Szeligowska Street in Warsaw) and (x) NP 8 Bogucicka sp. z o.o. sp. k. (currently not developing any project), all based in Warsaw (the “Limited Partnerships”, and together with the Acquired Companies, the “Group of Companies”).

Aforementioned Group of Companies, as for 31 December 2022, has investment potential comprising: (i) approximately 69,000 sq. m. of usable residential area and usable services area (i.e. 1,413 units) at various stages of development, (ii) land bank – projects in the pipeline of 115,000 sq. m. usable residential area and usable services area (i.e. approximately 2,200 units). Developments described above are located in Warsaw (approximately 65% of total usable residential area ), Kraków (25%) and Poznań (10%).

In addition, the Acquired Companies have secured lands under preliminary agreements enabling the development of approximately 109,500 sq.m. of usable residential area and usable services area (i.e. approximately 2,300 units).

The Parties have established an aggregate purchase price for the shares of the Acquired Companies as EUR 100.0 million (the “Price”), which takes into consideration a positive Net Debt (Net Cash) of PLN 42.0 million i.e. approximately EUR 9.0 million. The transaction structure assumes that the current cash flows and profits generated in 2023 shall be accrued to the Issuer. In the event that unauthorised cash flows arise between the Group of Companies and the Seller and its affiliates in 2023, the pricing will be reduced by the value of such flows.

The Price shall be paid in total on the date of the Final Agreement (as defined below).

It is expected that execution of the Final Agreement shall occur by 30 September 2023 (the “Final Agreement”). Execution of the Final Agreement is subject to fulfilment of the condition precedent of obtaining the approval of the President of the Office of Competition and Consumer Protection for the concentration within the Transaction.

The Preliminary Agreement provides following material provisions typical for this kind of transactions:

restriction on the Seller to conduct competitive activities within the territory of Poland after the closing of the Transaction, subject to certain exceptions and limitations, including time limits;
the Seller’s obligations in the interim period until the closing of the Transaction.

The Preliminary Agreement contains standard provisions for this type of transaction relating to representations and warranties of the Seller and the Issuer and rules of liability of the Parties and risks’ securities. In connection with the Transaction, in order to secure the Seller’s liability for breach of representations and warranties, the Issuer will obtain an insurance policy covering the Seller’s liability for representations and warranties.

The Parties may rescind the Preliminary Agreement in cases specified in the Preliminary Agreement relating to non-performance of the provisions set out therein.

The basis for this report is a materiality of the event in terms of the Issuer’s operations.

The information contained in this report constitutes confidential information within the meaning of Article 7 of the MAR Regulation.

Legal basis: Article 17(1) in conjunction with Article 7(1)(a), (2), (3) and (4) of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (Market Abuse Regulation) repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC, as amended (“MAR Regulation”) in conjunction with Art. 2 and 3 of Commission Implementing Regulation (EU) 2016/1055 of 29 June 2016 laying down implementing technical standards as regards the technical conditions for appropriate public disclosure and delay of public disclosure of inside information pursuant to Regulation (EU) No 596/2014 of the European Parliament and of the Council.