Stock Exchange Release 31 January 2020, at 4:50 p.m. EET. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR TO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, HONG KONG, NEW ZEALAND, SINGAPORE OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. Following its announcement on 20 January 2020 that it is planning an initial public offering and listing of its shares (the “Listing”) on the official list of Nasdaq Helsinki Ltd ("Nasdaq Helsinki"), Musti Group Plc ("Musti", "Musti Group" or the "Company") announces today the preliminary price range for the share issue and the share sale in connection with its planned initial public offering (the “Offering”). The subscription period for the Offering is expected to commence on 3 February 2020 at 10:00 a.m. EET. The Offering in brief: · The preliminary price range of the Offering is a minimum of EUR 5.65 and a maximum of EUR 9.35 per share (the "Preliminary Price Range"). · The market capitalization of the Company based on the Preliminary Price Range would be approximately between EUR 260–300 million assuming that the Company raises gross proceeds of approximately EUR 45 million in the Offering. · Mandatum Life Insurance Company Limited and Kapitalforeningen Investering & Tryghed have, each individually, committed to subscribe for shares at the Final Subscription Price (as defined below) in the Offering, subject to certain conditions being fulfilled. · The Company's Annual General Meeting (the "AGM") held on 23 January 2020 authorised the Board of Directors to combine all shares classes into a single share class, conditional upon the execution of the Listing. After the combination of the share classes, each share in the Company shall entitle its holder to one vote at a general meeting of shareholders of the Company and carry equal rights to dividends and other distributions by the Company. The AGM also authorised the Board of Directors to increase the number of the Company’s shares by a share issue without consideration (split) in order to bring the number and value of the Company's shares to an appropriate level relative to public trading. · Following the combination of the share classes and issuance of the New Shares (as defined below) in the Offering, there would be 46,008,815 shares, 37,308,714 shares or 32,055,190 shares outstanding, if the final subscription price per share for the Offer Shares (as defined below) (the “Final Subscription Price”) would be set at the low, mid or high-point of the Preliminary Price Range, respectively. · The Offering: · · The Company aims to raise gross proceeds of approximately EUR 45 million by offering new shares in the Company (the “New Shares”) for subscription (the "Share Issue"). The number of New Shares to be issued will be determined based on the Final Subscription Price. · · In addition to the Share Issue, Millan Holding S.à.r.l., a company wholly owned by EQT Mid-Market Fund and its co-investors ("EQT" or the “Main Seller”), and certain other existing shareholders of the Company (the “Other Sellers”, and together with the Main Seller, the “Sellers”) may offer for purchase a maximum of 16,868,388 existing shares in the Company (the “Sale Shares” and together with the New Shares, the “Offer Shares”) (the “Share Sale” and together with the Share Issue, the “Offering”). The final number of Sale Shares to be offered will be determined based on the Final Subscription Price. · · The Sellers’ aim is to sell such a number of Sale Shares in the Offering that the Offer Shares represent approximately 45.0– 54.0 percent of the Company’s shares (the “Shares”) and all votes in the Company after the Share Issue without the Over-allotment Option (as defined below) (approximately 51.8– 62.1 percent assuming the Over-allotment Option is exercised in full). · · EQT is expected to grant Nordea as stabilizing manager (the “Stabilizing Manager”) an option, exercisable within 30 days from commencement of trading in the Shares on Nasdaq Helsinki, to purchase a maximum of 3,726,714 additional Shares (the “Additional Shares”) solely to cover over-allotments in connection with the Offering (the “Over-allotment Option”). · · The Offering consists of (i) a public offering to private individuals and entities in Finland (the “Public Offering”), (ii) an institutional offering to institutional investors in Finland and, in compliance with applicable legislation, internationally (the "Institutional Offering"), as well as (iii) a personnel offering to all employees who are in a full- or part-time permanent employment relationship with Musti or its subsidiaries as well as employees with a fixed-term employment relationship with Musti or its subsidiaries at the start of the subscription period on 3 February 2020 in Finland, Sweden and Norway, as well as to management team and CEO of the Company (the “Personnel Offering”). Only New Shares will be offered in the Personnel Offering and a discount to the subscription price will be applied. · · The size of the Offering based on the mid-point of the Preliminary Price Range is approximately EUR 174 million assuming that the Company collects gross proceeds of approximately EUR 45 million, the Sellers sell the maximum amount of Sale Shares at such Offer Price, and that the Over-Allotment Option is exercised in full. · · The number of the Company’s Shares may increase to a maximum of 46,008,815 Shares and the number of New Shares issued represents approximately 17.3, 16.1 or 15.1 percent of the Shares and votes after the Share Issue, assuming that all of the New Shares preliminarily offered in the Offering are subscribed for in full, and that the Final Subscription Price for the Offer Shares is the lowest price, at the mid-point or the highest price of the Preliminary Price Range, respectively. · · The subscription period for the Institutional Offering will commence on 3 February 2020 at 10:00 a.m. and end on 13 February 2020 at 10:00 a.m. at the latest (Finnish time). · · The subscription period for the Public Offering will commence on 3 February 2020 at 10:00 a.m. and end on 11 February 2020 at 4:00 p.m. at the latest (Finnish time). · · The subscription period for the Personnel Offering will commence on 3 February 2020 at 10:00 a.m. and end on 11 February 2020 at 4:00 p.m. at the latest (Finnish time). · · The Company’s Board of Directors and the Main Seller have, in the event of an oversubscription, the right to end the Institutional Offering, the Personnel Offering and the Public Offering by joint decision at the earliest on 10 February 2020 at 4:00 p.m. (Finnish time). · · Trading of the Shares on the pre-list of Nasdaq Helsinki is expected to commence on or about 14 February 2020 and on the official list of Nasdaq Helsinki on or about 18 February 2020 with the trading code “MUSTI”. The following table sets forth for illustrative purposes, the number of Shares outstanding in the Company prior to the Listing (taking into consideration the combination of share classes into one share class) and by alternative Final Subscription Prices within the Preliminary Price Range after the Listing: Final Subscription Price EUR 5.65 EUR 7.50 EUR 9.35 Shares prior to the 38,032,442 31,296,838 27,320,543 Offering Market value prior to 215 235 255 the Offering (EUR million) New Shares in the Share 7,976,373 6,011,876 4,824,647 Issue Shares after the 46,008,815 37,308,714 32,055,190 Offering Market value after the 260 280 300 Offering (EUR million) David Rönnberg, CEO of Musti Group: "Musti Group has demonstrated a strong track record of growth – we have developed from a strong Finnish retail concept into the leading Nordic pet care company. We expect the planned listing to further support the execution of our strategy and our growth. People are increasingly treating their dogs and cats like members of their family, spending more on higher quality and more premium food, as well as a more diverse range of products and services. We expect the global megatrend of Pet Parenting to continue to shape the Nordic market in the coming years. We cater to the needs of Pet Parents by offering them our winning concept, which is built around expert advice, high-quality offering, and omnichannel operations. Our mission is to make the life of pets and their owners easier, safer and more fun. We are ready to continue fulfilling that mission as a publicly listed company." The background and reasons for the Listing Musti Group is the leading Nordic pet care company that operates an omnichannel business model to cater for the needs of pets and their parents across Finland, Sweden and Norway.[1] (http://#_ftn1) The Company had 277 stores (the number of own and franchise stores) as at 30 September 2019 and 20.7 percent of its net sales were generated through the online channel. The Company offers a wide, curated assortment of pet products in both food and non-food categories, and has a broad range of own and exclusive as well as third-party brands. In the financial year 2019, 51.7 percent of product sales in the Company’s own stores and online sales were generated through the Company’s own and exclusive brands. The own and exclusive products consist of high-quality food and non-food brands developed by the Company itself and offered exclusively through the Company's own physical stores and online stores and high-quality brands of exclusive suppliers that are sold only through Musti stores and online stores in the Nordic countries. The Company also provides services for pets such as grooming, training and veterinary services in selected locations across the Nordic countries. The Listing is expected to support the execution of Musti’s strategy by increasing the visibility of the Company among its present and potential new customers, cooperation partners and employees. It will also enable the Company to access the capital markets to raise new capital to support its growth strategy, widen its shareholder base and increase the liquidity of the Shares. In addition, the Offering gives the shareholders selling Sale Shares an opportunity to realise a portion of their investment and to trade their shares on a public market. The Listing of the Shares also enables the Company to offer market-based incentive programs to its key personnel and to strengthen its image as an employer. Details of the Offering and the Finnish Prospectus release Preliminarily a maximum of 23,977,334 Offer Shares are being offered in the Institutional Offering to institutional investors in Finland and, in accordance with the applicable laws, internationally if the Final Subscription Price is the lowest price of the Preliminary Price Range and preliminarily a maximum of 16,442,378 Offer Shares if the Final Subscription Price is the highest price of the Preliminary Price Range. Preliminarily a maximum of 748,663 Offer Shares are offered in the Public Offering to private individuals and entities in Finland. Preliminarily a maximum of 118,764 personnel shares are being offered for subscription in the Personnel Offering to all employees who are in a full- or part-time permanent employment relationship with Musti or its subsidiaries as well as employees with a fixed-term employment relationship with Musti or its subsidiaries at the start of the subscription period on 3 February 2020 in Finland, Sweden and Norway, as well as to management team and CEO of the Company. The Preliminary Price Range of the Offering is a minimum of EUR 5.65 and a maximum of EUR 9.35 per share. The final subscription price in the Personnel Offering will be 10 percent lower than the Final Subscription Price in the Public Offering. Thus, the price for the New Shares in the Personnel Offering can be a maximum of EUR 8.42 per share. In the Offering, Musti aims to raise gross proceeds of approximately EUR 45 million by offering New Shares for subscription. The Company would issue a total of 6,011,876 New Shares assuming that the Final Subscription Price is at the mid -point of the Preliminary Price Range and that 118,764 New Shares will be subscribed for in the Personnel Offering with a lower subscription price applied to such New Shares. The Sellers offer for purchase preliminarily a maximum of 16,868,388 Sale Shares in the Share Sale if the Final Subscription Price is the lowest price of the Preliminary Price Range and preliminarily a maximum of 12,485,158 Sale Shares if the Final Subscription Price is the highest price of the Preliminary Price Range. The Sale Shares represent approximately 36.7 percent of the Shares after the Share Issue without the Over-Allotment Option and approximately 44.8 percent including the Over-Allotment Option, assuming that the Sellers will sell the maximum amount of Sale Shares for the lowest price of the Preliminary Price Range, and that all New Shares offered in the Share Issue are subscribed for. The Sale Shares represent approximately 38.9 percent of the Shares after the Share Issue without the Over-Allotment Option and approximately 47.0 percent including the Over-Allotment Option, assuming that the Sellers sell the maximum amount of Sale Shares for the highest price of the Preliminary Price Range, and that all New Shares offered in the Share Issue are subscribed for. In connection with the Offering, the Main Seller is expected to grant the Stabilising Manager an Over-allotment Option which would entitle the Stabilising Manager to purchase a maximum of 3,726,714 Additional Shares for the Final Subscription Price solely to cover over-allotments in connection with the Offering. The Over-Allotment Option is exercisable within 30 days from the commencement of trading of the Shares on the Prelist of Nasdaq Helsinki (i.e. on or about the period between 14 February 2020 and 14 March 2020). The maximum number of Additional Shares represents 8.1 percent of the Shares and votes vested by the Shares assuming that the Company will issue 7,976,373 New Shares. The number of New Shares is calculated assuming that the subscription price for the New Shares is the lowest price of the Preliminary Price Range and that the persons entitled to participate in the Personnel Offering would subscribe for 118,764 New Shares in total in the Personnel Offering for the lower subscription price applicable to the Personnel Shares. However, the number of Additional Shares will not represent more than 15 percent of the aggregate number of Offer Shares. In connection with the Listing, the Company and the Main Seller are expected to enter, and the Other Sellers as well as other current shareholders of the Company have entered into lock-up agreements of 180 days. The Board of Directors of the Company and the management team have entered into lock-up agreements of 360 days. Two institutional investors have committed to becoming cornerstone investors (“Cornerstone Investors”) in the Offering – Mandatum Life Insurance Company Limited and Kapitalforeningen Investering & Tryghed. The Cornerstone Investors have, each individually, committed to subscribe for shares at the Final Subscription Price in the Offering, subject to certain conditions being fulfilled, including a condition that the maximum valuation of all of the Company's outstanding shares (after any proceeds from the share issue and excluding treasury shares), based on the Final Subscription Price, does not exceed EUR 300 million. According to the terms and conditions of the subscription undertakings, the Cornerstone Investors will be guaranteed the number of Offer Shares covered in the subscription undertaking. The Cornerstone Investors will not be compensated for their subscription undertakings. The Cornerstone Investors have given subscription undertakings as follows: · The commitment of Kapitalforeningen Investering & Tryghed's undertaking amounts to EUR 10 million; and · The commitment of Mandatum Life Insurance Company Limited’s undertaking amounts to EUR 15 million. Before the execution of the Offering, the Shares of the Company have not been subject to trading on any regulated market or multilateral trading facility. The Company has submitted its listing application with Nasdaq Helsinki to list the Shares on the official list of Nasdaq Helsinki. Trading in the Shares is expected to commence on the Prelist of Nasdaq Helsinki on or about 14 February 2020 and on the official list of Nasdaq Helsinki on or about 18 February 2020. The Finnish Financial Supervisory Authority has approved the Finnish language prospectus (the "Finnish Prospectus") on 31 January 2020. The Finnish Prospectus will be available on or about 3 February 2020 on the Company’s website at www.mustigroup.com/listautuminen, on the website of Nordea at www.nordea.fi/osakkeet and on the website of Nordnet at www.nordnet.fi/musti. The English language translation of the Finnish Prospectus will be available on or about 3 February 2020 at www.mustigroup.com/IPO. The printed Finnish Prospectus will be available on or about 3 February 2020 at the office of the Company at Mäkitorpantie 3 B, FI-00620 Helsinki, Finland, at Nordea’s branch offices, and at Nasdaq Helsinki at Fabianinkatu 14, FI.00100 Helsinki. Carnegie Investment Bank AB, Finland Branch, Jefferies International Limited and Nordea Bank Abp (“Nordea”) are acting as joint global coordinators and joint bookrunners for the Offering (“Joint Global Coordinators”). Nordnet Bank AB (“Nordnet”) acts as the subscription place in the Public Offering and in the Personnel Offering. Roschier, Attorneys Ltd. acts as Legal Adviser to the Company and Borenius Attorneys Ltd as Legal Adviser to the Joint Global Coordinators. More information on the Offering and the subscription places are found on www.mustigroup.com/IPO, at www.nordea.fi/osakkeet and at Nordea’s branch offices. Important Dates 31 January 2020 · The Finnish Prospectus approved: 3 February 2020 · The Finnish Prospectus will be published (on or about): 3 February 2020 at 10:00 a.m. EET · The subscription periods for the Public Offering, Personnel Offering and the Institutional Offering commence: 10 February 2020 at 4:00 p.m. EET · The Offering may be ended at the earliest: 11 February at 4:00 p.m. EET · The subscription period for the Public Offering and Personnel Offering ends: 13 February 2020 at 10:00 a.m. EET · The subscription period for the Institutional Offering ends: 13 February 2020 · The Final Offer Price, the subscription price per Share in the Personnel Offering and the results of the Offering will be announced through a stock exchange release (on or about): 14 February 2020 · The Shares subscribed for in the Public Offering and the Personnel Offering will be recorded in the book-entry accounts of investors (on or about): 14 February 2020 · Trading in the Shares on the pre-list of Nasdaq Helsinki is expected to commence (on or about): 18 February 2020 · The Shares subscribed for in the Institutional Offering will be ready to be delivered against payment through Euroclear Finland Ltd (on or about): 18 February 2020 · Trading in the Shares on the official list of Nasdaq Helsinki is expected to commence (on or about): Musti in brief Musti makes the life of pets and their owners easier, safer and more fun. We are the leading Nordic pet care company and we operate an omnichannel business model to cater for the needs of pets and their owners across Finland, Sweden and Norway. We offer a wide, curated assortment of pet products. We also provide pet care services such as grooming, training and veterinary services in selected locations. Musti Group’s net sales were EUR 247 million in the financial year 2019. At the end of the financial year 2019, the company had 1,100 employees, over one million loyal customers and 277 stores. www.mustigroup.com Further enquiries Robert Berglund, CFO, Musti Group Tel. +358 50 534 8657 robert.berglund@mustigroup.com Important information The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed by any person for any purpose on the information contained in this announcement or its accuracy, fairness or completeness. The information in this announcement is subject to change. This announcement is not an offer to sell or a solicitation of any offer to buy any securities issued by Musti Group Plc (the ”Company”) in any jurisdiction where such offer or sale would be unlawful. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. In any EEA Member State, other than Finland, this announcement is only addressed to and is only directed at qualified investors in that Member State within the meaning of Regulation (EU) 2017/1129 (“Prospectus Regulation”). Any potential offering of the securities referred to in this announcement will be made by means of a prospectus. This announcement is not a prospectus as set out in the Prospectus Regulation. Investors should not subscribe for or purchase any securities referred to in this announcement except on the basis of information contained in the aforementioned prospectus. Before subscribing for or purchasing any shares in the Company in connection with the proposed Offering, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the aforementioned prospectus if published. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. The Company may decide not to go ahead with the Offering and there is therefore no guarantee that the Offering will occur. Potential investors should not base their financial decision on this announcement. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. This announcement and the information contained herein are not for distribution in or into the United States. This announcement does not constitute an offer to sell, or a solicitation of an offer to purchase, any securities in the United States. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public offering of the securities in the United States. In the United Kingdom, this announcement and any other materials in relation to the securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this announcement relates is available only to, and will be engaged in only with, “qualified investors” (as defined in section 86(7) of the Financial Services and Markets Act 2000) and who are (i) persons having professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). Persons who are not relevant persons should not take any action on the basis of this announcement and should not act or rely on it. This announcement is for information purposes only and under no circumstances shall constitute an offer or invitation, or form the basis for a decision, to invest in any securities of the Company. Each of Carnegie Investment Bank AB, Finland Branch, Jefferies International Limited and Nordea Bank Abp (the "Joint Global Coordinators") is acting exclusively for the Company and the selling shareholders and no-one else in connection with the Offering. They will not regard any other person as their respective clients in relation to the Offering and will not be responsible to anyone other than the Company and the selling shareholders for providing the protections afforded to their respective clients, nor for providing advice in relation to the Offering, the contents of this announcement or any transaction, arrangement or other matter referred to herein. The contents of this announcement have been prepared by, and are the sole responsibility of, the Company. None of the Joint Global Coordinators or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith. For the avoidance of doubt, the contents of the Company’s website are not incorporated by reference into, and do not form part of, this announcement. Forward-looking statements Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as “believe”, “expect”, “anticipate”, “intend”, “may”, “plan”, “estimate”, “will”, “should”, “could”, “aim” or “might”, or, in each case, their negative, or similar expressions. The forward -looking statements in this announcement are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialise or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this announcement by such forward-looking statements. The Company and the Joint Global Coordinators do not guarantee that the assumptions underlying the forward-looking statements in this announcement are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this announcement or any obligation to update or revise the statements in this announcement to reflect subsequent events. Undue reliance should not be placed on the forward-looking statements in this announcement. The information, opinions and forward-looking statements contained in this announcement speak only as at its date and are subject to change without notice. The Company does not undertake any obligation to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this announcement. Information to Distributors For the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) Chapter 5 of the Finnish Financial Supervisory Authority’s regulations regarding investment services and activities (together the “MiFID II Product Governance Requirements”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the shares have been subject to a product approval process, where the target market for shares in the Company are: (i) retail investors and (ii) investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II (the “target market”). Notwithstanding the assessment of the target market, distributors should note that: the price of the shares may decline and investors could lose all or part of their investment; the shares offer no guaranteed income and no capital protection; and an investment in the shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The target market assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Offering. For the avoidance of doubt, the target market assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the shares in the Company. Each distributor is responsible for undertaking its own target market assessment in respect of the shares in the Company and determining appropriate distribution channels. [1] (http://#_ftnref1) Measured by market share for Nordic pet food and products in 2018, which was 22 percent based on Musti’s consumer sales for the financial year ended 30 September 2019.