AVV.L Regulatory News (AVV)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD BE UNLAWFUL. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES IN ANY JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

25 August 2020

ACQUISITION OF OSISOFT, LLC ("OSISOFT")

STRENGTHENING AVEVA'S POSITION AS A GLOBAL LEADER IN INDUSTRIAL SOFTWARE

ENHANCING AVEVA'S ABILITY TO ACCELERATE THE DIGITAL TRANSFORMATION OF THE INDUSTRIAL WORLD AND PROMOTE SUSTAINABILITY

ADDING SIGNIFICANT SCALE AND INDUSTRY DIVERSIFICATION

STRONG VALUE CREATION POTENTIAL AND EARNINGS ACCRETIVE BEFORE SYNERGIES

FINANCED BY NEW DEBT FACILITIES AND A PROPOSED RIGHTS ISSUE

Introduction

AVEVA Group plc ("AVEVA" or the "Company"), a global leader in industrial software, announces that it has reached agreement on the terms of an acquisition of OSIsoft (the "Acquisition"), at an enterprise value of $5.0 billion.

Founded in 1980 by Dr. J. Patrick Kennedy, OSIsoft is a global leader in real-time industrial data software and services. Its PI System is the system of record for customers for data capture, storage, analysis and sharing of real-time industrial sensor-based data across all operations, enabling customers to connect disparate sources of time-series data in an efficient and cost-effective manner. Through OSIsoft's PI System, customers draw insights, make better decisions, optimise operations, and drive digital transformation.

OSIsoft is headquartered in California, USA, and has approximately 1,400 employees. OSIsoft's PI System is used by its customers across 14,000 sites in 127 countries and is widely utilised in the process industries such as manufacturing, energy, utilities, pharmaceuticals, and life sciences, as well as within data centre facilities and across the public sector including federal government. OSIsoft works with over 1,000 of the world's leading power and utilities companies, 38 of the Global Fortune Top 40 oil & gas companies, all of the Global Fortune Top 10 metals and mining companies, 37 out of 50 of the world's largest chemical and petro-chemical companies and 9 out of 10 of the Global Fortune Top 10 pharmaceutical companies. Furthermore, as businesses deploy increasing levels of sensor-enabled equipment, more assets are streaming more data, increasing the need for and value derived from the PI System.

OSIsoft has a strong track record of organic growth and cash generation, with revenue growing at a 10.3% CAGR over the last 10 years (2009-2019). In the period from 2016 to 2019, OSIsoft delivered a revenue CAGR of 9.7% and an Adjusted EBIT CAGR of 18.5%. This strong growth continued this year as the imperative for digital transformation has continued through the COVID-19 crisis, with year over year revenue growth of 10.0% in the six months ended 30 June 2020. In the twelve months ended 30 June 2020, OSIsoft had revenue of $488.5 million and Adjusted EBIT of $152.2 million1.

1 FY2016-2019 CAGRs are shown according to ASC 605. H1 2019 and TTM to 30 June 2020 figures are shown according to ASC 606. See Appendix for details.

OSIsoft is currently owned by three shareholders:

· Estudillo Holdings Corp. ("Estudillo"), a company majority owned by Dr. J. Patrick Kennedy and his family, which holds a 50.3% stake;

· SB/OSI, Inc. ("SoftBank"), a company owned by SoftBank Group, which holds a 44.7% stake; and

· MDT Holding, Inc. ("Mitsui"), a company owned by Mitsui & Co., Ltd, which holds a 5.0% stake.

The Acquisition to form the "Enlarged Group" is a Class 1 transaction for AVEVA under the Listing Rules of the Financial Conduct Authority. A combined circular and prospectus containing further details on the Acquisition, the recommendation of AVEVA's board of directors (the "Board"), the terms of the proposed rights issue (the "Rights Issue"), and the notice of the general meeting of the Company (to be held to approve, amongst other matters, the Acquisition and to authorise the directors to allot shares in connection with the Rights Issue and the Acquisition) (the "General Meeting") (the "Combined Circular and Prospectus") is expected to be sent to AVEVA shareholders ("Shareholders") in October or early November 2020.

Schneider Electric SE ("Schneider Electric"), which currently indirectly holds approximately 60% of the issued ordinary shares of AVEVA ("Ordinary Shares"), has irrevocably committed to vote in favour of the Acquisition and fully subscribe for shares pursuant to the Rights Issue on a pro rata basis.

Subject to satisfaction of the conditions to the Acquisition, completion of the Acquisition ("Completion") is expected to occur around the end of the year.

Key Highlights of the Acquisition

The Board expects that the Acquisition will, among other things:

· Strengthen AVEVA's position as a global leader in industrial software, with combined pro forma revenue of c.£1.2 billion and Adjusted EBIT of c.£330 million (c.28% margin) for the Enlarged Group;

· Combine the complementary product offerings of AVEVA and OSIsoft - bringing together industrial software and data management - capitalising on the technological megatrends that are driving digital transformation of the industrial world as efficiency, flexibility, sustainability and resilience become increasingly urgent requirements for customers:

o OSIsoft's PI System is a very scalable and robust enterprise level data historian platform, which will be a key enabler of a number of AVEVA solutions, in particular enhancing the Digital Twin, HMI/SCADA, Manufacturing Execution System and Asset Performance, with more inputs and connectivity to feed AI-infused and cloud-based solutions;

o AVEVA's and OSIsoft's solutions will combine to create a leading Industrial Internet of Things (IIoT) portfolio, which will continue to be platform and hardware agnostic, meaning that it will be able to communicate with diverse devices using different operating systems;

o The combined solution set will optimise engineering, operations and performance, with unprecedented efficiency and value as a result of the integration of both businesses; and

o AVEVA will be able to accelerate the market adoption and expansion of OSIsoft Cloud Services (OCS) and other cloud-based offerings, which recently entered into an early adopter program and provide OSIsoft's industry leading data management capability in a native cloud environment;

· Enable AVEVA to broaden and deepen its relationships with both existing and new customers across the highly complementary, global customer bases. AVEVA and OSIsoft have a significant shared customer base, which provides synergies in multiple industries, enabling product integration and customer value;

· Strengthen AVEVA's position in the power & utilities and chemicals & petrochemicals segments and add stronger positions in the pharmaceutical, food & beverage and life sciences segments. AVEVA's industry exposure will also be further diversified with the oil & gas segment's contribution to pro forma revenue expected to decrease from c.40% to c.35%;

· Create cross selling opportunities across the Americas, EMEA and Asia Pacific, with each region contributing c.41%, c.36% and c.23%, respectively, to the Enlarged Group's pro forma revenue;

· Support delivery of AVEVA's medium term targets and enhance the Enlarged Group's long-term growth opportunity, with OSIsoft's strong historical growth, recurring revenue and margins closely aligned with AVEVA's own targets, and significant further upside through operational leverage, cost and revenue synergies;

· Create additional value for Shareholders through the potential for material cross-sell and upsell revenue synergies owing to the high degree of complementarity between the two product portfolios and a significantly larger customer base in expanded geographies and industries;

· Meaningful cost synergies are expected to be achieved, driven by operational efficiencies through the optimisation of cost structures such as elimination of overlaps, increased utilisation of delivery centres, and integration of corporate and administrative functions;

· Create material cash tax savings over a 15 year period as a result of intangible assets created by the Acquisition that can be amortised for tax purposes; and

· Be earnings accretive in AVEVA's financial year ending 31 March 2022, before synergies.

Key terms of the Acquisition

The key terms of the Acquisition include:

· Acquisition of OSIsoft for an enterprise value of $5.0 billion, on a cash-free and debt-free basis, assuming a normalised level of working capital, and subject to customary completion adjustments;

· $5.0 billion represents a multiple of 32.9x EV / Adjusted TTM EBIT, broadly in line with AVEVA's multiple;

· Acquisition is expected to be funded by a combination of a capital raise by way of the Rights Issue, cash on balance sheet, new debt facilities and issuing new Ordinary Shares to one of the selling shareholders, as follows:

o Approximately 12% ($0.6 billion) of the total consideration will be paid to Estudillo, in newly issued Ordinary Shares2, of which Estudillo will distribute approximately 90% of the shares to affiliates of Dr. J. Patrick Kennedy and 10% to other shareholders in Estudillo; and

o Approximately 88% ($4.4 billion) of the total consideration will be paid in cash, which will be funded by a combination of:

§ c.$3.5 billion from the proceeds of the proposed Rights Issue3; and

§ c.$0.9 billion from existing cash on balance sheet and new debt facilities, resulting in pro forma net leverage of 1.9x EBITDA for the Enlarged Group;

· OSIsoft's founder, Dr. J. Patrick Kennedy, will remain involved in the business through his appointment to the newly established (non-Board) role of Chairman Emeritus and ongoing share ownership of >4% in the Enlarged Group, in order to support the delivery of the full strategic, operational and financial benefits of the Acquisition;

· PI to be established as a business unit within the Enlarged Group, and AVEVA plans to establish retention and incentive arrangements with key OSIsoft management and employees in order to ensure the continued success of OSIsoft as part of the Enlarged Group;

· Completion is conditional upon, among other things, Shareholder approval of the resolution needed to complete the Acquisition and to authorise the directors to allot shares in connection with the Rights Issue and the Acquisition (the "Resolution") and satisfaction of applicable antitrust and other regulatory approvals;

· The Combined Circular and Prospectus is expected to be published in October or early November 2020 with the proposed Rights Issue to follow soon thereafter;

· For the purposes of certain funds in connection with the Acquisition, AVEVA has entered into a fully committed facilities agreement with Barclays, BNP Paribas and J.P. Morgan, consisting of:

o A debt bridge to equity of $3.6 billion (the "Bridge Facilities") which is not expected to be drawn and will be cancelled upon receipt of the net proceeds of the Rights Issue; and

o Fully committed term and revolving facilities which include a $900 million term loan facility with a maturity of 3 years ("Term Loan") and a £250 million revolving credit facility with a maturity of a minimum of 3 years ("RCF"); and

· Schneider Electric, which currently holds approximately 60% of the issued Ordinary Shares of AVEVA, has irrevocably committed to vote in favour of the Acquisition and fully subscribe to the Rights Issue on a pro rata basis. This will deliver the necessary voting majority for the Resolution to pass.

2 The valuation of the Ordinary Shares of $611 million (£467 million) has been calculated by reference to the number of Ordinary Shares to be issued to Estudillo under the Stock and Unit Purchase Agreement, being 10.9 million Ordinary Shares, subject to customary adjustment for the Rights Issue, and the 5-day volume weighted average price of AVEVA's share price up to the close of trading on 24 August 2020 (the last practicable date prior to publication of this announcement).

3 The proceeds of the Rights Issue of $3.5 billion to fund the Acquisition excludes amounts payable for transaction related fees and expenses.

AVEVA Current Trading

AVEVA continued to see similar trends in the first four months of FY 2021 to those that were outlined in its first quarter trading update for the three months to 30 June 2020. Strong growth in subscription revenue continued, while maintenance revenue was broadly flat and perpetual licences and services reduced substantially. This reduction was partly due to AVEVA's ongoing transition to a subscription business model and partly due to disruption caused by Covid-19. Overall AVEVA Group organic constant currency revenue declined 3.7%.

Despite the Covid-19 related disruption, demand for AVEVA's software has been robust, due to its ability to drive efficiency, flexibility and sustainability for customers across a wide range of industries, with particularly good demand for Cloud solutions.

As previously outlined, AVEVA faces a tough comparative period in the first half of FY 2021, particularly in Asia Pacific, partly due to the early renewal of a large contract in the prior financial year. The order pipeline for the remainder of the financial year is solid and is expected to benefit from large contract renewals in the second half of the financial year.

Expected Timetable to Completion

The Combined Circular and Prospectus containing further details on the Acquisition, the recommendation of AVEVA's Board, the terms of the Rights Issue and the notice of the General Meeting is expected to be sent to Shareholders in October or early November 2020. Subject to satisfaction of the conditions to the Acquisition, Completion is expected to occur around the end of the year.

Commenting on the Acquisition, Philip Aiken, Chairman of AVEVA, said:

"I am delighted that we have reached agreement to acquire OSIsoft. The acquisition has compelling strategic rationale with strong operational and financial benefits. The acquisition will strengthen AVEVA's position as a global leader in industrial software, whilst a combination of the complementary product offerings of AVEVA and OSIsoft is expected to allow the Enlarged Group to accelerate growth and continue to generate significant shareholder value."

Commenting on the Acquisition, Craig Hayman, Chief Executive of AVEVA, said:

"The acquisition of OSIsoft is perfectly in line with our strategic vision and it will accelerate the Enlarged Group's role in the digitisation of the industrial world, which is being driven by a need for sustainability, the industrial internet of things, Cloud, data visualisation and artificial intelligence. The acquisition will enable AVEVA to broaden and deepen its relationships with existing and new customers and bring a more comprehensive product portfolio to market."

Commenting on the Acquisition, Peter Herweck, Vice Chairman of AVEVA and Executive Vice President, Industrial Automation, Schneider Electric, said:

"The combination of AVEVA and OSIsoft will accelerate our AVEVA partnership with significant customer value across process and hybrid automation industries plus the building and infrastructure sectors. AVEVA's industrial software is a key element of Schneider Electric's IoT-enabled architecture, EcoStruxure which will be further enhanced by OSIsoft's PI System and its support for open infrastructure. Schneider Electric is committed to supporting customers with digital solutions for efficiency and sustainability."

Commenting on the Acquisition, Dr. J. Patrick Kennedy, Founder and Chief Executive of OSIsoft, said:

"Joining forces with AVEVA enhances and extends our ability to deliver on our key commitments to our customers, partners and employees. Together we will be better able to service the largest digital transformation projects in history, including across industry 4.0+ and IIoT. The next chapter in PI's fifth decade will be exciting for our employees and customers, and I look forward to my continued involvement as Chairman Emeritus and shareholder."

The information contained within this announcement is considered by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No.596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information will be considered to be in the public domain.

The person responsible for arranging for the release of this announcement on behalf of the Company is James Kidd, Deputy CEO and CFO.

AVEVA will hosting a briefing call for investors and analysts at 08:30 BST today. See below for dial in details or visit https://investors.aveva.com.

Enquiries:

AVEVA Group plc

Philip Aiken (Chairman)

Craig Hayman (Chief Executive Officer)

James Kidd (Deputy CEO and CFO)

Matt Springett (Head of Investor Relations)

Tel: +44 7789 818 684

Lazard

Financial Adviser to AVEVA

Cyrus Kapadia

Keiran Wilson

Tel: +44 20 7187 2000

Numis Securities

Joint Corporate Broker and Sponsor to AVEVA

Simon Willis

Jamie Loughborough

Jonny Abbott

Tel: +44 20 7260 1000

J.P. Morgan Cazenove

Joint Corporate Broker to AVEVA

Bill Hutchings

Tel: +44 20 7742 4000

FTI Consulting

PR Adviser to AVEVA

Edward Bridges

Dwight Burden

Tel: +44 20 3727 1017

Sources and Bases

1. Where amounts are shown in both US dollars and sterling, or converted between the aforementioned currencies, in this announcement, an exchange rate of £1.00/US$1.30775 has been used, which has been derived from data provided by Bloomberg on 24 August 2020.

2. Unless otherwise stated:

· financial information relating to AVEVA has been extracted or derived from the audited results for the twelve months ended 31 March 2020; and

· financial information relating to OSIsoft has been extracted or derived from the audited results for the twelve months ended 31 December 2019 and the unaudited results for the six months ended 30 June 2020.

3. All OSIsoft financial information in this announcement is presented in accordance with US GAAP and may be different in the Combined Circular and Prospectus, which will be prepared in accordance with IFRS and AVEVA's accounting policies.

4. Adjusted Earnings Before Interest and Tax (EBIT), as used in this announcement, is calculated where applicable before amortisation of intangible assets (excluding other software), share-based payments, gain/loss on fair value of forward foreign exchange contracts and (save in respect of OSIsoft) exceptional items.

5. EBITDA, as used in this announcement, is calculated as adjusted EBIT plus depreciation.

6. Combined pro forma financial information is based on twelve months ended 31 March 2020 for AVEVA and twelve months ended 30 June 2020 for OSIsoft.

7. Combined revenue breakdowns by industry and geography have been derived from the reclassification of OSIsoft segments in accordance with AVEVA's segments.

8. Pro forma oil & gas revenues based on AVEVA's approximate oil & gas revenues in financial year ended 31 March 2020 and OSIsoft's oil & gas revenues estimated by applying billings by industry breakdown (breakdown for OSIsoft's financial year ended 31 December 2019) to total revenues for the twelve months ended 30 June 2020.

9. Enterprise value of $5.0 billion has been calculated by reference to the total of cash consideration and the 5-day volume weighted average price of AVEVA's share price up to the close of trading on 24 August 2020 (the last practicable date prior to publication of this announcement) multiplied by the number of Ordinary Shares to be issued to Dr. J. Patrick Kennedy, subject to customary adjustment for the Rights Issue.

10. TTM is defined as trailing twelve months.

11. CAGR is defined as a compound annual growth rate.

12. Certain figures in this announcement have been subject to rounding adjustments.

Important Notices

This announcement is an announcement and not a circular or prospectus or equivalent document and prospective investors should not make any investment decision on the basis of its contents. The Combined Circular and Prospectus in relation to the transaction will be published in due course. Nothing in this announcement constitutes an offer of securities for sale in any jurisdiction.

This announcement contains statements about AVEVA that are or may be forward looking statements. All statements other than statements of historical facts included in this announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "goals", "should", "would", "could", "continue", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "hopes", "projects" or words or terms of similar substance or the negative thereof, are forward looking statements.

Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof. AVEVA disclaims any obligation to update any forward looking or other statements contained herein, except as required by applicable law or regulation. 

This announcement is for informational purposes only and is not an offer of securities for sale in any jurisdiction where to do so would be unlawful. Securities may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended (the "US Securities Act"), or an exemption therefrom. The securities referred to herein have not been and will not be registered under the US Securities Act or under the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold, taken up, resold, transferred or delivered in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in accordance with any applicable securities laws of any state or other jurisdiction of the United States.

Lazard & Co., Limited ("Lazard"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser to AVEVA and no one else in connection with the possible acquisition referenced above and will not be responsible to anyone other than AVEVA for providing the protections afforded to clients of Lazard or for providing advice in relation to the proposed Acquisition or any other matters referred to in this announcement. Neither Lazard nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard in connection with this announcement, any statement contained herein, the possible acquisition or otherwise.

Numis Securities Limited ("Numis"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as joint corporate broker to AVEVA and no one else in connection with the proposed Acquisition or any other matter referred to in this announcement and will not be responsible to anyone other than AVEVA for providing the protections afforded to its clients nor for providing advice in relation to the Acquisition or any other matter referred to in this announcement. Neither Numis nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not its client in connection with this announcement, any statement contained herein, the Acquisition or otherwise.

J.P. Morgan Securities plc, which conducts its UK investment banking activities as J.P. Morgan Cazenove ("JPM") and which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively as joint corporate broker to AVEVA and no one else in connection with the proposed Acquisition or any other matter referred to in this announcement and will not be responsible to anyone other than AVEVA for providing the protections afforded to its clients nor for providing advice in relation to the Acquisition or any other matter referred to in this announcement. Neither JPM nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not its client in connection with this announcement, any statement contained herein, the Acquisition or otherwise.

Ashurst LLP and Debevoise & Plimpton LLP are acting as the lead legal advisers to AVEVA in connection with the transaction.

OSIsoft's financial adviser in the transaction is Morgan Stanley and Co. LLC and its legal counsel in the transaction is Fenwick & West and Slaughter and May.

APPENDIX I

HISTORICAL FINANCIAL PERFORMANCE OF OSISOFT

As of 31 December 2019, OSIsoft had gross assets of $364.6 million and net assets of $126.3 million.

Notes

OSIsoft's FY16-FY19 figures shown above are according to ASC 605 revenue recognition policies. FY19 and H1 19 figures are shown as restated according to ASC 606. H1 20 and TTM ended 30 June 2020 figures are shown according to new ASC 606 policies.

All OSIsoft financial information in this announcement is presented in accordance with US GAAP and may be different in the Combined Circular and Prospectus, which will be prepared in accordance with IFRS and AVEVA's accounting policies.

Operating costs calculated as gross profit less EBITDA.

APPENDIX II

DETAILS OF THE PROPOSED ACQUISITION OF OSISOFT

Stock and Unit Purchase Agreement

On 25 August 2020, the Company, AVEVA US 1 Corp. and AVEVA US 2 Corp., Delaware corporations and indirect wholly owned subsidiaries of the Company (together, the "Purchasers"), OSIsoft, Mitsui, Softbank and Estudillo (Estudillo, together with Mitsui and SoftBank, being the sellers) entered into a stock and unit purchase agreement (the "SUPA"), pursuant to which the Company and the Purchasers have agreed, subject to the terms and the conditions of the SUPA, to acquire, directly or indirectly, all of the issued and outstanding units of OSIsoft.

The consideration for the Acquisition will comprise: (i) the payment of $4.4 billion in cash consideration; and (ii) the allotment and issuance by AVEVA of 10.9 million consideration shares in respect of a portion of the consideration payable to Estudillo, subject to certain customary adjustments and payments to reflect that the Acquisition will be made on a cash-free, debt-free basis and on the basis of a normalised level of working capital at Completion. Following Completion, and while Dr. J. Patrick Kennedy has a legal or beneficial interest in 3% or more of the share capital of AVEVA (including through Estudillo), each of Dr. J. Patrick Kennedy and Estudillo will consult with AVEVA and its brokers prior to any offer or disposal of Ordinary Shares.

Completion of the Acquisition is conditional upon satisfaction of certain conditions, including the approval of Shareholders at the General Meeting and the receipt of antitrust and CFIUS approvals. The SUPA contains customary representations, warranties, covenants and pre-Completion undertakings.

The Company will be required to pay a termination fee of $85 million to OSIsoft if the SUPA is terminated due to either: (a) Completion not having occurred by 20 December 2020 as a result of Shareholder approval, antitrust approvals or CFIUS approval not having been obtained or governmental orders having prevented Completion (the "Conditions"), provided that such date will be extended to 31 March 2021, and subsequently to 30 June 2021, where any of the Conditions (other than the Shareholder approval condition) have not been satisfied (without regard being had to the satisfaction or otherwise of the Shareholder approval condition); or (b) a government authority having prohibited the Acquisition by way of a final non-appealable order under an antitrust law or issued by CFIUS, provided that, in either case, at the time of such termination all other conditions to AVEVA's obligations to effect the Acquisition have been satisfied or would have been satisfied at Completion, and OSIsoft has not committed a material breach of the SUPA which was the principal cause of Completion not having occurred and the SUPA being terminated.

Facilities Agreement and Schneider Electric Guarantee

AVEVA has entered into an English law governed facilities agreement with certain lenders and Barclays Bank PLC as agent (the "Facilities Agreement"), pursuant to which the lenders have made available to AVEVA and certain of its subsidiaries $3.6 billion of debt under the Bridge Facilities, a $900 million term facility and a £250 million revolving credit facility, each of which may be used to finance the cash consideration component of the consideration. The Bridge Facilities are not expected to be drawn and will be automatically cancelled upon receipt of the net proceeds of the Rights Issue.

The Facilities Agreement is unsecured, however indebtedness under the Facilities Agreement is guaranteed by certain subsidiaries of AVEVA. In addition, under an English law governed guarantee entered into on 25 August 2020, Schneider Electric has irrevocably and unconditionally agreed to guarantee the obligations of the borrowers, as they concern payment of principal and outstanding interest, in respect of $2.2 billion of the Bridge Facilities. This amount is equivalent to the proceeds receivable from Schneider Electric's pro rata entitlement of the Rights Issue. The Schneider Electric guarantee shall terminate on the date on which the guaranteed obligations have been discharged in full and the lenders are under no further obligation to provide financial accommodation under the relevant Bridge Facility. AVEVA and certain of its subsidiaries have agreed on a joint and several basis to pay and reimburse Schneider Electric for the full amount of any payments made by Schneider Electric under the guarantee.

Schneider Electric Irrevocable Undertakings

Schneider Electric has irrevocably agreed to vote (or cause to be voted) its Ordinary Shares, which constitute approximately 60% of the issued and outstanding Ordinary Shares of AVEVA as of the date hereof, in favour of the Resolution approving, among other things, the Acquisition, at the General Meeting, pursuant to a voting and support agreement between Schneider Electric, OSIsoft and the Company entered into on 25 August 2020. Schneider Electric's obligations shall not apply if there is a governmental order which prohibits the carrying out of the above actions.

Schneider Electric has also irrevocably committed to take up (or cause to be taken up) its entitlement to subscribe for shares pursuant to the Rights Issue, pursuant to an equity financing deed between Schneider Electric, AVEVA, J.P. Morgan Securities plc, as the lead arranger of the Facilities Agreement (the "Arranger"), Barclays Bank PLC, BNP Paribas Fortis SA/NV and Numis Securities Limited entered into on 25 August 2020 ("Equity Financing Deed"). The Equity Financing Deed provides each of the banks thereto a right to enforce the undertaking in the event that Schneider Electric has not done so by 12.00 p.m. on the third business day before the latest time for acceptance and payment pursuant to the terms of the Rights Issue.

Schneider Electric has agreed that it will not dispose of, or enter into an agreement to dispose of, its Ordinary Shares in the Company until dealings in the Rights Issue shares (fully paid) have commenced.

Cooperation Agreement

On 25 August 2020, AVEVA and Schneider Electric entered into a cooperation agreement recording the steps which AVEVA and Schneider Electric have agreed to take in relation to Completion and certain obligations which each party has agreed in favour of the other relating to the Acquisition (the "Cooperation Agreement").

The Cooperation Agreement provides, amongst other matters, that AVEVA shall use its reasonable best efforts to cancel (if undrawn) or prepay (if drawn) the portion of the Bridge Facilities guaranteed by Schneider Electric in full prior to the latest applicable termination date under the Facilities Agreement, and that Schneider Electric will assist AVEVA and its advisers as reasonably requested in connection with any filings with applicable governmental authorities deemed necessary or advisable as a result of the Acquisition.

Seller Non-Competition Agreement

The seller non-competition agreement ("Seller Non-Competition Agreement") was entered into on 25 August 2020 between AVEVA, OSIsoft and Dr. J. Patrick Kennedy. Pursuant to the Seller Non-Competition Agreement, Dr. J. Patrick Kennedy has agreed that, for a three-year period following Completion, he will not (and shall cause his controlled affiliates not to) directly or indirectly, among other things, operate, control or engage in any business competing with any member of the OSIsoft Group throughout the United States and any country in the world if the OSIsoft Group is conducting or has undertaken material planning to conduct business in such country as of Completion.

The Seller Non-Competition Agreement also contains non-solicitation (in respect of employees and business connections), non-hiring and non-disparagement obligations.