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AS LHV Group entered into agreement for the acquisition of EveryPay AS. The transaction will be decided by the general meeting of shareholders of LHV

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AS LHV Group (LHV Group) concluded a contract for the acquisition of EveryPay AS
(EveryPay), in which LHV Group will acquire 100% of EveryPay shares, for EUR 8
million. For the amount received, EveryPay shareholders will subscribe to new
shares issued by LHV Group. In essence, this is a share exchange transaction.

A prerequisite for the transaction taking place is its approval and the
respective decision to increase share capital at the general meeting of
shareholders of LHV Group, which will be held on 30 March 2022. The purchase
price and other basic conditions of the transaction (in the non-confidential
extent), as well as the conditions for increasing share capital, will be
announced to the shareholders of LHV Group with the notice calling the general
meeting.

This transaction is not a transaction with a person for the purposes of stock
exchange regulations, and the Supervisory Board and Members of the Management
Board of LHV Group have no personal interest in the transaction.

EveryPay is a platform for receiving payments, established in 2012 and
introduced to the market in 2015, that interfaces banks and e-commerce companies
with modern payment methods, such as card payments and open banking payments.
Major banks in the Baltics, several smaller financial institutions, and over
2000 e-commerce companies use the services of EveryPay. Every year, EveryPay
processes over 15 million payments, totalling over EUR 800 million.

About 70% of Estonian online card transactions and approximately 50% of those in
the Baltics, are currently made through EveryPay. EveryPay employs 30 people.
The most important founders of the company, Joel Mitt and Lauri Teder, will
continue working in the business to be acquired.

The main product of EveryPay is a payment gateway platform of card payments and
open banking, which acts as a connecting link between e-commerce merchants and
the bank offering payment acquiring services and/or an institution offering
alternative payment methods. Merchants are offered the receipt of payment
services, and banks are offered a technologically strong payment gateway that
enables the bank to serve e-commerce merchants if the bank does not have their
own respective platform. Right now, card payments and open banking payments
belong to EveryPay's product portfolio. Additionally, they offer comfort
products related to payments, such as automatic payments, mass payments,
standing payments, and the LinkPay payment link.

In acquiring EveryPay, LHV Group sees the following opportunities for growing
business:

  * Expansion into the e-commerce business that is rapidly growing around the
    world. By acquiring EveryPay, AS LHV Group is more actively entering the
    rapidly growing e-commerce segment, both in Europe and the world in a wider
    context. Through EveryPay, LHV is able to provide added value in e-commerce
    to the main target groups: the local retail banking segment, the financial
    intermediaries segment, and the United Kingdom e-commerce companies segment.
  * Acquiring technology. The EveryPay platform has been developed with high
    quality and skill for collecting payments, and it corresponds to modern
    security requirements. Developing and operating an alternative platform in
    this extent would require significant financial and development resources.
  * Acquiring development talent. EveryPay's key employees have long-term
    experience and are mainly aimed at developing the product and technology.
    EveryPay has created long-term relations with external development partners,
    enabling them to manage IT development flexibly, and scale as required.

"More than before, we wish to grow business activities related to payment
services. This has become an important part of LHV's strategy. We see the local
retail banking segment, the financial intermediaries segment, and the United
Kingdom e-commerce companies segment as our target groups across LHV Group's
companies. Payment collection business related to e-commerce, such as online
card payments and open banking payments, are rapidly increasing in terms of the
Estonian retail banking segment. The joint offer of LHV and EveryPay to e-
commerce merchants is one of the best in Estonia. In terms of the international
financial intermediaries segment, we see an opportunity to increase sales
volumes, revenues and profit by offering the service to existing clients. In
terms of the United Kingdom's e-commerce companies segment, it is a necessary
product for developing new products and client offers of LHV UK Limited for
online card payments, open banking payments and the 'buy now, pay later'
product, with which to provide a comprehensive offer for companies engaged in e-
commerce in the United Kingdom," commented Madis Toomsalu, CEO of LHV Group.

In 2021, EveryPay earned EUR 1.2 million in revenue, which is twice as much as
in the year before. Most of the revenue was generated in Estonia, a smaller part
in Latvia and Lithuania. In 2022, the increase in revenue is estimated to be
75% compared to the previous year, and the company is expected to reach running
profitability. After acquiring EveryPay, the services of LHV companies would
create a positive synergy which, according to the financial plan, will increase
the volume of payments intermediated by EveryPay from EUR 800 million in 2021 to
six times that in five years, with fee and commission income increasing by 18
times in this period. From 2023, the company will be able to generate a profit
every year, which is estimated to reach EUR 7.5 million by 2026.

LHV Group is the largest domestic financial group and capital provider in
Estonia. LHV Group's key subsidiaries are LHV Pank, LHV Varahaldus, and LHV
Kindlustus. LHV employs over 670 people. As of January, LHV's banking services
are being used by 327,000 clients, the pension funds managed by LHV have
135,000 active clients, and LHV Kindlustus protects a total of 145,000 clients.
LHV's UK branch offers banking infrastructure to 180 international financial
services companies, via which LHV's payment services reach clients around the
world.


Priit Rum
LHV Communication Manager
Phone: +372 502 0786
Email: [email protected] (mailto:[email protected])