Annoucement_0715_for Posiflex biz partners_v1

News & Update

Posiflex to team up with strategic investors via US$160m PrivatePlacement of Preferred Stock and to acquire Portwell at US$180mAn US$360 million B2B IoT Platform powered by O2O Integration[July 14, 2017]Posiflex Technology, Inc. (“Posiflex”, or the “Company”) announced to acquire 100% shares ofPortwell Inc. (“Portwell”) for a total consideration of US$180 million; upon closing Portwell willbecome a wholly-owned subsidiary of Posiflex. Meanwhile, Posiflex to invite Embedded City Taiwan,a group of international strategic investors, by US$160 million preferred shares issuance toestablish the balance of power between the Founders and the professional management team,trying to avoid the challenge for most aged founders in Taiwan searching for succession plans. Withthe support from Embedded City Taiwan, Posiflex shall introduce corporate governance andinfrastructure with reference to global best practice, preparing for a sustainable corporate platform.Posiflex believes such strategic acquisition shall effectively expand the total addressable markets,further optimize business models, and ultimately enable sustainable corporate development.Embedded City Taiwan to offer international capital management, global industrial brand &channel reach, IoT innovations, along with capabilities to execute cross-border M&Atransactions and integrationEmbedded City Taiwan is a joint venture of Embedded City Limited (“Embedded City”) and Fu-YiInvestment (“Fu-Yi”), managed by Esquarre Capital. The major shareholders of Embedded Cityinclude Palace Investments Pte. Ltd (“Palace”) and Argus Holding Limited (“Argus”). Palace is awholly-owned subsidiary of Pavilion Capital, a Singaporean investment institution focusing on NorthAsia private equity investment; Argus is a 100% Taiwanese-funded holding company aiming todevelop innovative O2O business model for housing industrialization; Argus’s portfolio businessesinclude kitchen and bath products, fittings & valves and smart home solutions. Fu-Yi is a companyheld by Portwell’s founding families. Esquarre Capital is founded by Jay Cheng, former Presidentof KPMG Deal Advisory Limited, who has over 20 years experiences in cross-border M&A and hasadvised/represented industry leaders to execute over 50 cross-border M&As with change in control,including over 10 successful transactions in IPC industry. Mr. Cheng has comprehensiveunderstanding and insights around corporate governance, strategic M&As & integration, as well assustainable corporate development strategy, and has accumulated fruitful experiences in globalindustrial PC and IoT industries over the past 15 years.

Portwell’s expertise in RISC/Android solutions and deep domain knowhow in multiplevertical markets will be the best support for KIOSK’s global expansionFounded in 1993 and listed on Taiwan OTC market since 2001, Portwell is the leader in IPCtechnology innovation, dedicated to the development of technologies in electronics, mechanical,firmware and system integration for embedded computing. In addition to the traditional WINTELplatform, Portwell is also a distant leader offering solutions to the latest core IoT platform &applications, such as RISC, FPGA, as well as Android/Linux platform integration. Portwellprovides IPC computing boards, system solutions and technology services for applications inmultiple vertical markets including gaming and lottery, digital healthcare, green technology,network security, and industrial automation. Portwell has been well positioned to provide project-based customized turnkey solutions with high entry barriers (long product life cycle, long &stringent certification process) which ensures high customer loyalty with tier-1 global leaders inmedical equipment, gaming & lottery machines, network security appliance, and industrialautomation. It is believed that Portwell’s technologies and innovation will fuel KIOSK’sinternational expansion outside of North American, whereas KIOSK’s blue chip customers andPosiflex’s global channel partner will together further expand Portwell’s end markets andcustomer access; the combined 3 businesses will soon scale up to create significant synergies.Post transaction, Portwell’s current management team will be retained and to continue with dailyoperations as is.Total addressable market will triple to reach US$16bnWith Portwell and KIOSK, Posiflex aims to master the demand from B2B IOT Platform empoweredby its two strategic business groups with 50/50 revenue split: (1) O2O Solutions, with addressablemarket of US$11 billion, and (2) IoT Infrastructure, with addressable market of US$5 billion. Theapplications of O2O solution include Smart Retail & Hospitality, Gaming & Entertainment, Fintech,Security & Logistics, and Digital Healthcare, while the applications of IoT Infrastructure cover GreenTech, SDN Datacenter, and Automation. The combined business portfolio will enable Posiflex toexpand its total addressable markets from US$1.4 billion of EPOS hardware, US$3.1 billion fromself-service solutions, to a few more vertical markets with over US$16 billion market opportunities.Rising with the explosive growth in demand from O2O/IoT platform applications, Posiflex aims toprovide project based customized total solutions to increase number of edges/access and improvecustomer experiences, which will be followed by cloud-based hosting services for hardwaremonitoring, preventive maintenance, and value added managed services throughout the project lifecycle.

To build the World’s Leading Brand for O2O SolutionsPosiflex and Portwell have complementary product lines, supply chain advantages, R&D resourcesand regional focus; the combination is expected to fuel mid to long term revenue growth and harvestefficiently on cost synergies. Together with KIOSK and Portwell, Posiflex will continue own brandbusiness development for its global channel partners with support from enlarged R&Dcapacity/resources and economies of scale. The Company will differentiate itself from its peers byintegrating into the one and only platform, optimizing manufacturing resources and consolidatingsupply chain (procurement, inventory, warehouse, logistics) operations. Posiflex will be well-positioned to capitalize on Internet of Things fully by its unique and winning US$360 billion platformpowered by the most comprehensive vertical market coverage on a global scale.About Posiflex:Founded in 1984, Posiflex Technology, Inc. has designed and manufactured its own-branded and world-classPOS solutions as well as self-service solutions through acquisition of KIOSK in 2016. Recognized as apioneer and leader in the industry, Posiflex has been awarded more than 30 patents for innovative design.The company’s products are manufactured in ISO 9001/9002/14001 facilities in Taiwan and sold worldwidethrough retail, hospitality, banking, healthcare and many other verticals. Posiflex’s offices are in the USA,Germany, China, India, Singapore, Malaysia, Japan and Dubai along with the global distribution networks toprovide direct and timely support to its customers around the world. For more information: www.posiflex.comAbout Portwell:Portwell, Inc. was founded in Taiwan in 1993 and entered the Industrial PC market in 1995 by developingsingle-board computers. Portwell is an Associate member of the Intel IoT Solutions Alliance, an executivemember of the PCI Industrial Computer Manufacturers Group (PICMG), as well as a member of the AdvancedTelecommunications Computing Architecture (ATCA) Group.Portwell dedicated itself to provide innovative and high quality turnkey solutions and comprehensivetechnology services to support customers keep leading in their applications. It has worldwide offices in theU.S.A., Taiwan, Japan, China, United Kingdom, Germany, Brazil and India. For more information:http://www.portwell.com