Mr. Mr. Richard Kellam reports

DCM ANNOUNCES STRATEGIC ACQUISITION OF OCTACOM, STRENGTHENING ITS POSITION IN HIGH-GROWTH INTELLIGENT DOCUMENT PROCESSING MARKET

Data Communications Management Corp. has acquired Octacom Ltd., a leading Canadian provider of intelligent document processing (IDP) and digital transformation solutions, for $54.0-million on a cash-free and debt-free basis. In addition, the company has entered into a fifth amended and restated credit agreement with a Canadian chartered bank, which provides for up to $160-million of credit facilities, a portion of which have been used to finance the transaction.

Founded in 1976, Octacom is a privately held enterprise software and services company that provides business process outsourcing and automation solutions across a broad range of industries. By combining artificial-intelligence-enabled data capture, automated workflows and collaborative process design, Octacom helps organizations reduce costs, increase processing accuracy, strengthen compliance and unlock productivity gains from document-intensive operations. Octacom has delivered strong, sustained growth in both revenue and profitability, including generating approximately $23-million in revenue for the 12-month period ended May 31, 2026. The acquisition is expected to be accretive to Data's adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) and adjusted EBITDA margin, adjusted EPS (earnings per share) and free cash flow.

"We believe this acquisition will accelerate the company's strategic shift toward a higher-growth, higher-margin and higher recurring-revenue business. At a time when enterprise clients are increasing their investment in automation, digitization and AI-enabled workflow, this transaction enhances our capabilities in intelligent document automation and meaningfully expands DCM's potential addressable market," said Richard Kellam, president and chief executive officer of Data. "This transaction broadens our portfolio of tech-enabled services and solutions, deepens our strategic relevance with our clients and we believe strengthens our platform for sustainable earnings growth to create long-term shareholder value."

"Combining our business with DCM marks an exciting new chapter for Octacom, expanding our ability to deliver secure and innovative solutions that help organizations improve operating performance and advance their digital transformation agendas," said Lee Berger, chief executive officer of Octacom. "With DCM's national reach of secure document processing facilities, complementary client relationships and strong commitment to leadership in the IDP space, the combined organization will be well positioned to deliver broader value to customers and capitalize on attractive growth opportunities."

Strategic benefits of the transaction

Strengthens Data's position in the fast-growing global IDP market, driven by the rapid expansion of enterprise data, advances in AI and machine learning, and increasing regulatory compliance requirements. The global IDP market is expected to grow at a 34.5-per-cent CAGR (compound annual growth rate) between 2026 and 2033, from $3.0-billion (U.S.) in 2025 to $30.7-billion (U.S.) in 2033.

Expands Data's tech-enabled product and service offerings with a leading independent Canadian provider of digitization, automation and document management solutions for large enterprises, particularly in high-volume document-intensive verticals including banking, finance, insurance, health care, government, loyalty programs and transportation, markets that are highly complementary to Data's own client base and the company's long-standing relationships.

Octacom's proprietary AI-enabled information and data capture solutions and Odiss workflow, automation, and data repository platform are expected to enhance Data's ability to deliver scalable embedded solutions with strategic value to clients. This enhanced solution mix is expected to support improved margins, stronger customer retention and features a highly recurring revenue base, with approximately 10 per cent of Octacom's revenue derived from the Odiss cloud-based SaaS (software-as-a-service) platform.

Creates meaningful benefits for Data's clients, who are focused on accelerating their digital transformation, by enabling them to digitize paper-based workflows and records, reduce paper dependency, improve accuracy, and unlock value from unstructured data and legacy records.

Transaction overview

Data has acquired all of the issued and outstanding shares of Octacom. The aggregate purchase price is comprised of $43.2-million paid in cash and $10.8-million settled through the issuance of 6,428,571 common shares in the capital of Data at a deemed price of $1.68 per share. On closing, Octacom shareholders hold approximately 10.3 per cent of Data's issued and outstanding shares. Shares issued to Octacom's selling shareholders are subject to an 18-month lock-up period following closing. Going forward, Octacom will operate as a division of Data retaining the Octacom name, operations footprint and the full team, including its leadership.

Key terms of amended credit facility

Data financed the cash portion of the consideration from borrowings under the amended credit facility, which provides for up to $160-million of funds. A portion of the proceeds drawn under the amended credit facility were used to repay Data's outstanding indebtedness with Fiera Private Debt Fund VI LP (FPD VI). In connection with the syndication of the amended credit facility, the bank may, upon prior written consultation with the company, change the terms of the amended credit facility, where the bank reasonably determines, on a commercially reasonable basis, that such change is necessary to facilitate a successful syndication of the amended credit facility or in the event a successful syndication cannot be completed.

The amended credit facility currently has a three-year term maturing on July 8, 2029, and includes: (a) a $70-million revolving credit facility, available for working capital and general corporate purposes, which replaces the company's existing revolving credit facility with the bank; (b) a $40-million non-revolving term loan used to refinance the company's outstanding indebtedness with FPD VI; and (c) a $50-million acquisition line. The term loan and acquisition line amortize over a 10-year period, with funds available on the acquisition line used to pay for the cash portion of the transaction.

The amended credit facility is available to be drawn by way of prime rate loans, base rate loans, CORRA loans, SOFR loans and/or letters of credit.

The terms and conditions of the amended credit facility are set out in the fifth amended and restated credit agreement, a copy of which will be filed under the company's profile on SEDAR+.

Early warning disclosure

As a result of the transaction, Octacom Holdings LP, a former shareholder of Octacom, acquired 6,388,203 shares, representing approximately 10.21 per cent of the currently issued and outstanding shares. Prior to completion of the transaction, the LP did not hold any shares. The consideration shares have an aggregate value of $10,732,181.04 (being $1.68 per consideration share).

The acquisition of the consideration shares by the LP was completed in connection with the transaction and the consideration shares were issued from treasury and formed a portion of the purchase price payable by Data. Depending on market conditions and subject to the lock up agreement entered into with Data, the LP may, from time to time, distribute consideration shares to its partners, acquire additional securities of Data, dispose of some or all of the consideration shares, or additional securities of Data or may continue to hold the consideration shares and/or other securities of Data.

An early warning report will be filed by the LP in accordance with applicable securities laws and will be available on SEDAR+ or may be obtained directly from James Lorimer upon request at 905-791-3151. The LP's head and registered office is located at 120, 45 Staples Ave., Richmond Hill, Ont., L4B 4W6, Canada.

About Data Communications Management Corp.

Data Communications is a leading Canadian tech-enabled provider of print and digital solutions that help simplify complex marketing communications and operations workflow. Data serves over 2,500 clients including 70 of the 100 largest Canadian corporations and leading government agencies. The company's core strength lies in delivering individualized services to its clients that simplify their communications, including customized printing, highly personalized marketing communications, campaign management, digital signage and digital asset management. From omnichannel marketing campaigns to large-scale print and digital workflows, the company's goal is to make complex tasks surprisingly simple, allowing its clients to focus on what they do best.

About Octacom Ltd.

Octacom is an enterprise software and business process services provider, delivering intelligent document and data management solutions that help organizations automate, optimize and govern their most critical workflows. Since 1976, the company has partnered with clients to address complex operational challenges through large-scale scanning, AI-enhanced capture, secure integrations and comprehensive BPO (business process outsourcing) support.

Octacom's cloud platform, Odiss, offers robust, secure and cost-effective document management and workflow automation for organizations across diverse industries. Backed by a dedicated, client-focused team, Octacom provides solutions that seamlessly integrate with existing systems and drive long-term efficiency gains. Octacom is committed to enabling true digital transformation -- empowering clients to reduce paper dependency, improve accuracy and continuously optimize their business performance.

We seek Safe Harbor.