THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014, AS AMENDED (AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018.

6 October 2023

The 600 Group PLC

("600 Group", the "Group" or the "Company")

Letter of Intent re Potential Disposal

The 600 Group announces the entry of a non-binding letter of intent (the "LOI") by the Company's wholly owned subsidiary, 600 Group Inc. (the "Subsidiary"), with a U.S. based operationally-oriented mid-market private equity firm (the "Counterparty") regarding the potential disposal by the Group of a majority interest in the business and assets of the Group's wholly owned TYKMA Electrox and Control Micro Systems industrial laser businesses in the U.S. (the "Potential Disposal").

The LOI envisages the Potential Disposal to entail the disposal by the Group of an 80 per cent. stake in TYKMA Electrox and Control Micro Systems (the "Laser Business") for a cash consideration of US$9.5 million, subject to customary working capital adjustments, with the Group retaining a 20 per cent. interest in the Laser Business which would be subject to a put and call option arrangement between the parties (the "Option"). The Option would be capable of exercise by the parties in the 30-day periods following the conclusion of either of the Laser Business' FY25 and FY26 financial years should the Laser Business' EBITDA exceed pre-agreed targets.

The Board would therefore expect the initial cash proceeds to the Group of the Potential Disposal, should it be completed, to be sufficient to pay off all existing Group bank borrowings, provide significant operating cash and the Company would retain a 20 per cent. interest in the ongoing operations of the Laser Business.

Whilst the LOI is non-binding as to the terms of the Potential Disposal which remains subject to, inter alia, contract, the Subsidiary has provided the Counterparty with a binding 90-day period of exclusivity to conclude the Proposed Disposal (the "Exclusivity Period").

In the event that Group shareholder approval is required to approve the Potential Disposal, the Subsidiary has committed to meeting the reasonably incurred expenses of the Counterparty in the event that the Group's shareholders do not approve the Potential Disposal. In addition, and should the Subsidiary pursue an alternative proposal in respect of a similar transaction during the Exclusivity Period, the Subsidiary has agreed to pay to the Counterparty a termination fee of $500,000. The Company cautions that notwithstanding the entry of the LOI and the award of exclusivity to the Counterparty, there can at no certainty that the Potential Disposal will be concluded and nor can there be any certainty as to the terms on which any transaction may be possible.

Paul Dupee, Chairman of 600 Group, commented:

"The Group's industrial laser businesses continue to be well placed in their respective highly fragmented markets. Whilst non-binding, the entry of the LOI with the counterparty provides scope for TYKMA and CMS, and the Group, to partner with a U.S. private equity firm in the continued future growth of the industrial laser business."

Further announcements will be made, as appropriate, in due course.

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