Bruno Mendonça

M&A João Pianna

Matheus Della Rosa
InFinance 2019.1 Nathália Pereira
Gerente: Pedro Pontual
 Payments Industry Dynamics

1 Payments Business Dynamics – Monetary Flow 2 Total Paid Value (TPV) in Brazil (R$ Bn)
Debit transactions
8%
Credit transactions CAGR: 11.3

&'' &''
1,555
1,377
1,137 1,205
907 1,033
!+0
! + #$
()*'+,-.)/' &'' 2013 2014 2015 2016 2017 2018

3 Growing Industry Competitiveness

Payments Market Share Evolution (% of Payment Volume)
! + #%

! + 20
!+0
!1

48%
36%
32%
23%
13%
9% 10%
Transaction
1% 7%
2016 2017 2018E 2019E 2020E
Carrier Retail
Cielo Getnet Stone Rede PagSeguro

Although the payment industry is going through a significant growth in volume, it is becoming less interesting to operate.

Source: Brazilian Central Bank and ABECS

2
 Payments Industry Overview

1 Growing Industry Competitiveness 2 Commoditization

Credit Merchant Discount Rate (MDR) Industry EBITDA (R$ Bn)
2.65% 14.1 13.6
2.46% 2.46% 2.47% 12.7 13.1 12.6
2.31% 1.5
10.4 2.2
5.6 4.8
1.33% 5.2 4.1
1.32% 1.45% 1.48% 4.4 3.1
1.48% 1.0 1.3 1.7 0.7
2.1 1.4
2.3
1.32% 1.14% 5.6 6.5 6.8 6.1
1.01% 0.99% 0.83% 4.7 3.6

2009 2011 2013 2015 2017 2014 2015 2016 2017 2018 2019E
Net MDR Interchange Fee Cielo Getnet Stone Rede PagSeguro
3 Regulation and Price War
Top Players Take Rate Break Down (2018)
Commoditization
Due to commoditization tendencies, companies are reducing
considerably their MDR fees. 1,68% 1,69%
1,53% 1,59%

Digital Wallet 0.61%

0.86%
Payment method using QR Codes, making transactions immediate. This 0.79% 0.76%
makes the charge of prepayment fees irrelevant 0.22%

0.39% 0.38%
0.38%
Changes in Regulation 0.85%
Possible change in regulation would drop payment term in Credit 0.36% 0.44% 0.45%
Operations to D + 2 days.
Cielo
Prepayment
Getnet
Rental Fees StoneMDR Rede

Changes in regulation and in competitive dynamics could compromise the sector’s financial health.

Source: Stone’s IR and Brazilian Central Bank

3
 Management Software Industry Overview

1 Industry Dynamics

Common User Revenue Method

Payment Sector Software Sector
Payment Sector: MDR and Receivables

Transactions Data & Automation

POS Software Sector: Subscription (SaaS)

2 Expected Market Growth for 2019 3 Retail Software Market Share Evolution
% YoY Growth by Revenue % of Total Industry Revenue

41% 41%
67% 64% 62%
19% 17%
13.2%
10.5% 9.3%
7.6%
4.9% 4.9% 33% 36% 38% 40% 42%
3.9%

2013 2014 2015 2016 2017

Linx TOTVS Other

Both the payment and retail software industries are critical parts of the operation of the retail sector, and making good use of these tools could be a major
competitive advantage for retailers.

Source: Linx’s IR, IDC

4
 StoneCo.

1 Company Overview 2 Shareholders Shareholders Agreement

Existence of Class A and
1
Class B shares
Founded in 2012 as a brazilian Founding Madrone
indepedent acquirer Others
Shareholders Partners Class B shares provide 10x more voting
64%
25% 11%
power than Class A shares
Nearly 250 hubs spread all over Brazil
Founders: 51.8% of Class B shares
More than 3,000 employees and 46.7% of voting power
Right to appoint majority in board
Shares traded in Nasdaq ( >15% of voting power)

4 Operations 5 Stock Price (US$)*

Revenue Breakdown 2018 (%) Revenue(R$MM) x Gross Margin
2000 43.56
3% 61% 60%
MDR 50%
32% 1500
40% 40% 29.35
Subscription 30% 26.51
30% 24.00
1000 1,579
51% Prepayment 14%
20% 17.46
500 10%
NA 767
14% Other financial revenues 36 442 0%
0 -10%
2014 2015 2016 2017 2018 10/25/18 12/25/18 2/25/19

Stone has been a top player in terms of growth in client base and in customer satisfaction metrics, both due to an extremely client-focused strategy.

Source: Stone’s IR and Capital IQ

5
 StoneCo.

1 Company Overview 2 Shareholders 3 Financial Highlights (R$)*

Market Cap = 35,636.9
Founded in 2012 as a brazilian Founding Madrone 1
indepedent acquirer Others Net Margin = 19.3%
Shareholders Partners
64%
25% 11%
Nearly 250 hubs spread all over Brazil
Net Debt = (231.5)
Net Debt/EBITDA = (0.3x)
More than 3,000 employees EV/EBITDA FWD** = 22.7x

Shares traded in Nasdaq

P/E FWD** = 42.9x
% of Maximum Price = 63.7%
4 Operations 5 Stock Price (US$)*
Revenue Breakdown 2018 (%) Revenue(R$MM) x Gross Margin
2000 43.56
3% 61% 60%
MDR 50%
32% 1500
40% 40% 29.35
Subscription 30% 26.51
30% 24.00
1000 1,579
51% Prepayment 14%
20% 17.46
500 10%
NA 767
14% Other financial revenues 36 442 0%
0 -10%
2014 2015 2016 2017 2018 10/25/18 12/25/18 2/25/19

Stone has been a top player in terms of growth in client base and in customer satisfaction metrics, both due to an extremely client-focused strategy.

Source: Stone’s IR and Capital IQ

* BRL/USD ratio – 4.04 based on 05/22/2019 closing price; Stone’s and Linx’s stock prices were using VWAP 6
**Multiple FWD for 2019
 Linx S.A.

1 Company Overview 2 Shareholders 3 Financial Highlights (R$)*

Market Cap = 5,384.9
Founded in 1985 by Nércio Fernandes Founding Genesis
Others Net Margin = 10.4%
Shareholders Asset
74%
Biggest software management house in Latin 18% 8%
Net Debt = (157.8)
America focused in Retail
Net Debt/EBITDA = (0.9x)
Linx has 41% of Retail Software Market Share
in Brazil EV/EBITDA FWD** = 24.7x
P/E FWD** = 45.1x
Shares traded in Bovespa
% of Maximum Price = 81.6%
4 Operations 5 Stock Price (R$)*
Revenue Breakdown 2018 (%) Revenue(R$MM) x Gross Margin
38.77
13% Software Subscription 72% 71% 71%
70% 70% 31.55
5% 29.85
29.15
Royalties 24.96
686
496 572
369 449 17.53
82% Services
2014 2015 2016 2017 2018 5/18/18 7/18/18 9/18/18 11/18/18

Linx develops softwares mainly focused in small and medium businesses, and offers solutions to a great part of retailers’ management software needs.

Source: Stone’s IR and Capital IQ

* Price based on 05/22/2019 closing price; Stone’s and Linx’s stock prices were using VWAP 7
**Multiple FWD for 2019
 Transaction Rationales

Expansion of Stone’s TPV through Linx’s Client Base

1 Linx’s solid and vast retail client base could increase considerably Stone’s TPV. Therefore, the combined
company would consolidate itself as the third biggest player in the Payments Market.

Higher Adherence on Payments Business

2 The Payments Market is extremely sensetive to price. The transaction would combine software solutions
with Stone’s POS devices, reducing its churn and boosting its volume of transactions.

Cross-selling of Linx’s Solutions to Stone’s Client Base

3 Differentiation is becoming a key element to the success in the Payments Industry. The offering of Linx´s
solutions alonsgside Stone´s Pin Pad will benefit the combined company.

4
SG&A, R&D and Revenue Synergies
The combined company could boost its revenue by the cross-selling of its software solutions. Besides
that, there’ll be a significant impact from SG&A and R&D synergies as well.

Source: Own elaboraton 8

 1. Expansion of Stone’s TPV through Linx’s Client Base

1 Small and Medium Business (SMB) TPV Share* 2 Segment Attractiveness

Total Adressable Payments Market (2017) Top Players MDR by Segment (2018)

12%

29%
59% 1.8%
1.4%
1.2%
0.9%
0.4% 0.4% 0.4% 0.4%
Micro Bussiness Small Medium Bussiness Large Bussiness SMB Large Business
Rede Cielo Stone Getnet
3 Stone and Linx Client Base Profile 4 TPV per Company (R$ Bn)
Stone’s TPV by Segment (2018) Linx’s Revenue by Segment (2019) 2023E

75% 90%

948
557 511 125
25% 10% 386 376

SMB Large Business SMB Large Business Cielo Rede NewCo** Stone GetNet Linx**

The combination of the companie’s client base could have major impacts in the proforma TPV and market share in a decisive moment for establishing
Stone as an important player in the sector.

Source: Stone’s IR, Linx’s IR, Own Elaboration

*Micro Business: 0-9 employees; Small Medium: 10 – 250 employees; Large: 250+ employees 9
**Potential TPV by Linxpay expectations
 2. Higher Adherence on Payments Business

1 Relationship between Retailers and Acquirers 2 Importance of Bundle Selling

Main reasons to switch acquirer Breakdown of Purchase of acquiring services

Fee 17% 18% 16% 15% 18%

21%
POS Price 17%
POS Rental 17% 35% 43% 34% 36%
35%
Maintence 9%
Reciavables Fee 9%
44% 47% 41% 51% 46%
Sales Fee 4%
Others 18%
2015 2016 2017 2018 2019
Don't Know/NA 9%
Single Package Separated Don't Know/NA

3 Retailers Business Perspective 4 Linx’s Retainment (Year)

% of respondents who acknowledge digital transformation as important (2018)

79% 95% 95% 96%

94%
55% 60% 59%

$100 m–$249.9 m $250 m–$499.9 m $500 m–$999.9 m $1 bn+ 2015 2016 2017 2018

The Pro-Forma company could offer a more interesting joint value proposition for the retailer. Therefore, the company would benefit of lower payments
churn and would boost its transaction volume.

Source: Stone’s IR, Linx ‘s IR and Oxford Economics, UBS Lab.

10
 3. Cross-selling of Linx’s Solutions to Stone’s client base

1 Stone’s Client Base as a driver to higher market penetration

Stone’s client base evolution (Thousands) Payments (% of TPV - 2018) Retail software (% of Revenue - 2018)

%
R 80 15%
CAG
33%
268
234
201
131
161 67%
103
82 83 88 85%

4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Penetrated market Unpenetrated market

2 Software Adoption by Small Business 3 NewCo Revenue Breakdown* (2018)

Software solutions used by small businesses in retail (% of respondents - 2018)

5% Prepayment

23% 38% Subscription

68%
MDR
25% 26% 28% 27% 24% 4%
34% Other
Does not use Accounts Accounts Sales of goods Inventory Raw material Others
receivab le payab le and services

Sharing the companies’ client base could have major impacts on software growth, without losing strategic focus on small and medium businesses.

Source: Stone’s IR, Linx’s IR, SEBRAE, Own Elaboration

*Ex-Synergies 11
 4.1. Revenue Synergies

1 Synergies Rationales 3 NewCo Revenue with Synergies

Software cross-selling opportunities Stone’s Client Base 268,000

Synergies are expected from software cross-selling to Stone’s client base.
Stone’s Addressable clients (70%) 187,600
Sales expertise exchange
Penetrated client base (19.4%) 36,394
Stone’s hub sales model would revamp software sales strategy.
Linx users (41%) 14,922
Higher client retention
Stone’s expertise in customer support could reduce software churn I Estimated capture (0%) -

Other software users (59%) 21,472

2 Main Assumptions
II Estimated capture (5%) 1,074
Market and Client Base Homogeneity
We assume Stone’s client base profile, in terms of software penetration, Unpenetrated client base (80.6%) 151,206
homogeneous with the Brazilian market.
III Estimated capture (15%) 22,681
Same-as-market software organic growth rate
Linx’s growth is estimated based on market growth, discounted for Total estimated capture (I + II + III) 23,755
synergy estimation.

Higher Capture on Non-Penetrated Market Linx's revenue per client R$ 12,784

Due to the high transition costs, we estimate a 5% capture of already
penetrated market, in contrast with 15% of non-penetrated market. Estimated revenue synergy R$ 303,683,920

Sharing the Pro-Forma client base to its software branch would increase the company’s performance even further.

Source: Stone’s IR, Linx’s IR, IDC, Own Elaboration

12
 4.2. Expenses Synergies

1 Synergies Rationales 2 Main Assumptions

Lower administrative costs 20.5% Reduction on G&A Expenses

Elimination of administrative redundancies. By reducing 40% of Linx’s G&A

Lower software development costs 10% Reduction on R&D Expenses

Reduction of expenses in similar efforts. By reducing development team and acquisitions

Lower customer acquisition cost 3.7% Reduction on Selling Expenses

The not-intersected client base will allow lower CAC over time. By reducing Linx’s Selling Expenses in 10%

3 NewCo with Synergies (R$MM)

NewCo
NewCo (With Estimated Δ Earnings
Stone Linx (Without Δ(%)
Synergies) Synergies Post-Taxes
Synergies)
Sales (190.2) (111.0) (301.2) (3.7%) (290.1) 11.1 7.3
G&A (208.1) (218.4) (426.5) (20.5%) (339.1) 87.4 57.7
R&D (44.8) (73.5) (118.3) (10.0%) (106.5) 11.8 7.8
OpEx (443.0) (402.9) (845.9) (13.0%) (735.6) 110.3 72.8

Thanks to Stone’s endeavor in software development and Linx’s entry in the payment industry, a significative amount of R&D and SG&A expenses could be
spared.

Source: Stone’s IR, Linx’s IR, Own Elaboration

Tax Rate: 34% 13
 Transaction Impacts

1 Present Value of All Synergies

Revenue SG&A R&D P/E FWD*

Stone NPV

( Δ Earnings:
143.6 MM
Δ Earnings :
65.0 MM
Δ Earnings :
7.8 MM
) 31.04x 6,717 MM

2 Cost Synergies Sensibility Analysis 3 Revenue Synergies Sensibility Analysis

% of Estimated Synergy % of Estimated Synergy
80% 90% 100% 110% 120% 80% 90% 100% 110% 120%
29.04 1,691.09 1,902.48 2,113.86 2,325.25 2,536.63 29.04 3,335.84 3,752.83 4,169.81 4,586.79 5,003.77

P/E FWD**
P/E FWD**

30.04 1,749.32 1,967.99 2,186.65 2,405.32 2,623.98 30.04 3,450.72 3,882.06 4,313.41 4,744.75 5,176.09
31.04 1,807.56 2,033.50 2,259.45 2,485.39 2,711.33 31.04 3,565.60 4,011.30 4,457.01 4,902.71 5,348.41
32.04 1,865.79 2,099.01 2,332.24 2,565.46 2,798.68 32.04 3,680.48 4,140.54 4,600.61 5,060.67 5,520.73
33.04 1,924.02 2,164.53 2,405.03 2,645.53 2,886.03 33.04 3,795.36 4,269.78 4,744.20 5,218.63 5,693.05

Once achieved all of estimated synergies, the deal would have a high NPV for the proforma company.

Source: Stone’s, Linx‘s IR, Own Elaboration

*Weighted Average Multiple FWD for 2019, 2020, 2021
14
 Transaction Structure

1 Merger Model*
Transaction's Assumptions (R$MM) Valuation (R$MM) Stone Linx Adjust. NewCo
Stock Price Linx (R$) 33.9 Earnings 307.56 71.10 - 378.66
Premium 20% P/E FWD 43.0x 45.2x - -
Price Paid per Share 40.7
Equity Value 35,636.9 5,384.9 - 41,021.8
Equity Value Acquired (R$MM) 6,461.9
Net Debt (232.5) (157.86) 1,938.56 1,548.21
Price Paid per Share in Cash (30%) 12.2
Price Paid per Share in Stock (70%) 28.5 Net Debt/EBITDA - - 2.19x
Stock Exchange Ratio (Stone/Linx) 0.22 Enterprise Value 35,404.4 5,227.0 - 42,570.0
Total Debt Issued (R$) 1,938.6 EV/EBITDA FWD 22.77x 24.70x - -
Ownership Structure Stone Linx NewCo
(Thousands of shares) Shares A Shares B % total Ações % total Adjust. Shares A Shares B % total
Stone Founders - 68,490.84 24.71% - - - - 68,490.84 21.92%
Madrone Partners 6,209.53 23,129.74 10.58% - - - 6,209.53 23,129.74 9.39%
Genesis Asset - - - 13,988.18 8.81% 3,101.34 3,101.34 - 0.99%
Linx Founders - - - 29,328.30 18.47% 6,502.43 6,502.43 - 2.08%
Others 119,487.91 59,861.98 64.71% 115,490.37 72.72% 25,605.57 145,093.48 59,861.98 65.61%
Total 125,697.44 151,482.56 100.00% 158,806.85 100.00% 35,209.34 160,906.78 151,482.56 100.00%

The transaction structure is based on 30% cash and 70% on stock, with a premium of 19% on the Equity Value.

Source: Stone’s IR, Linx’s IR, Own Elaboration

*BRL/USD ratio – 4.04 based on 05/22/2019 closing price 15
Stone’s and Linx’s stock prices were using VWAP
Q&A 16
Accretion/Dilution Analysis (30% Cash – 70% Stock)

Accretion/Dilution 2019E 2020E 2021E

Net Income STNE (R$ mm) 801.44 1,131.90 1,402.12
# Shares Outstanding (mm) 277.40 277.40 277.40
STNE Standalone EPS (R$/share) 2.89 4.08 5.05
Net Income LINX3.SA (R$ mm) 92.07 160.60 198.20
# Shares Outstanding (mm) 158.8 158.8 158.8
LINX3.SA EPS (R$/shares) 0.58 1.01 1.25
Combined Net Income (R$ mm) 893.51 1,292.50 1,600.32
Add'l Interest Expenses - 173.02 - 173.02 - 173.02
(-) Tax Shield 58.83 58.83 58.83
Operating Synergies (Post-Tax) 123.93 176.95 21.64
Post-tax Adjustments (R$ mm) 9.74 62.76 -92.55
Pro-forma Net Income (R$ mm) 903.25 1,355.26 1,507.77
New Shares Issuance 34.92 34.92 34.92
Pro-forma Shares Outstanding (mm) 312.31 312.31 312.31
EPS Pro Forma (R$/share) 2.89 4.34 4.83
EPS Accretion/Dillution - R$ 0.00 0.26 -0.23
EPS Accretion/Dillution - % 0.10% 6.35% -4.49%
Need/ (Buffer) for synergies for a neutral transaction $ 0.93 $ 80.89 $ (70.84)

First Year Capture Second Year Capture Third Year Caputure

Sales Synergies 7,326,000.00 50% 25% 25%
G&A Synergies 57,657,600.00 80% 10% 10%
R&D Synergies 7,807,800.00 30% 30% 40%
Revenue Synergies 143,599,782.78 50% 30% 20%
Total 123,931,311.39 176,950,846.22 216,391,182.78
Upside (30% Cash / 70% Stock) X (60% Cash / 40% Stock)

Equity Value da STNE 35,636,889,527

Equity Value da LINX 5,384,901,904

Upsides 30% Cash 70% Equity Upsides 60% Cash 40% Equity
Earnings 216.39 Earnings 216.39
Perceived Multiple 31 Perceived Multiple 31
Total Synergies (Equity Value) 6,716.78 Total Synergies (Equity Value) 6,716.78
Equity Value (Linx) 5,384.90 Equity Value (Linx) 5,384.90
Premium Paid 20.0% Premium Paid 20.0%
Premium (R$) 1,076.98 Premium (R$) 1,076.98
Net Synergies NewCo 5,639.80 Net Synergies NewCo 5,639.80
Participation in NewCo (Linx Shareholders) 11.3% Participation in NewCo (Linx Shareholders) 6.8%
Linx's Shareholders Synergies 635.22 Linx's Shareholders Synergies 381.39
Additional Equity Value (Linx) 1,712.20 Additional Equity Value (Linx) 1,458.37
Participation in NewCo (Stone Shareholders) 88.7% Participation in NewCo (Stone Shareholders) 93.2%
Stone's Shareholders Synergies 5,004.58 Stone's Shareholders Synergies 5,258.41
Additional Equity Value (Stone) 5,004.58 Additional Equity Value (Stone) 5,258.41
Upside Stone 14.04% Upside Stone 14.76%
Upside Linx 31.80% Upside Linx 27.08%
 Merger Model – 60% Cash / 40% Stock

Transaction's Assumptions (R$MM) Valuation (R$MM) Stone Linx Adjust. NewCo

Stock Price Linx (R$) 33.9 Earnings 307.56 71.10 - 378.66
Premium 20.0%
P/E FWD 42.97 45.16 - -
Price Paid per Share 40.7
Equity Value 35,636.89 5,384.90 - 41,021.79
Equity Value Acquired (R$MM) 6,461.9
Net Debt -232.50 -157.86 3,877.13 3,486.77
Price Paid per Share in Cash (60%) 3,877.1
Net Debt/EBITDA - - 4.94
Price Paid per Share in Stock (40%) 2,584.8
Stock Exchange Ratio (Stone/Linx) 0.13 Enterprise Value 35,404.39 5,227.05 - 44,508.57
Total Debt Issued (R$) 3,877.1 EV/EBITDA FWD 22.77 24.70 - -

Ownership Structure Stone Linx NewCo

(Thousands of shares) Shares A Shares B % total Ações % total Adjust. Shares A Shares B % total

Stone Founders - 68,490.84 24.71% - - - - 68,490.84 23.04%

Madrone Partners 6,209.53 23,129.74 10.58% - - - 23,129.74 9.87%

6,209.53
Genesis Asset - - - 13,988.18 8.81% 1,772.20 - 0.60%
1,772.20
Linx Founders - - - 29,328.30 18.47% 3,715.67 - 1.25%
3,715.67
Others 119,487.91 59,861.98 64.71% 115,490.37 72.72% 14,631.76 134,119.66 59,861.98 65.25%

Total 125,697.44 151,482.56 100.00% 158,806.85 100.00% 20,119.62 145,817.06 151,482.56 100.00%
Accretion/Dilution Analysis (60% Cash / 40% Stock)

Accretion/Dilution 2019E 2020E 2021E

Net Income STNE (R$ mm) 801.44 1,131.90 1,402.12
# Shares Outstanding (mm) 277,396.28 277,396.28 277,396.28
STNE Standalone EPS (R$/share) 2.89 4.08 5.05
Net Income LINX3.SA (R$ mm) 92.07 160.60 198.20
# Shares Outstanding (mm) 158,806.8 158,806.8 158,806.8
LINX3.SA EPS (R$/shares) 0.58 1.01 1.25
Combined Net Income (R$ mm) 893.51 1,292.50 1,600.32
Add'l Interest Expenses -348.94 -348.94 -348.94
(-) 34% Tax Shield 118.64 118.64 118.64
Operating Synergies 123.93 176.95 216.39
Post-tax Adjustments (R$ mm) -106.37 -53.35 -13.91
Pro-forma Net Income (R$ mm) 787.14 1,239.15 1,586.41
New Shares Issuance 20,119.62 20,119.62 20,119.62
Pro-forma Shares Outstanding (mm) 297515.91 297,515.91 297,515.91
EPS Pro Forma (R$/share) 2.65 4.16 5.33

EPS Accretion/Dillution - R$ -0.24 0.08 0.28

EPS Accretion/Dillution - % -8.43% 2.07% 5.49%
Need/ (Buffer) for synergies for a neutral transaction $ (72,428.83) $ 25,152.36 $ 82,593.57

First Year Capture Second Year Capture Third Year Caputure

Sales Synergies 7,326,000.00 50% 25% 25%
G&A Synergies 57,657,600.00 80% 10% 10%
R&D Synergies 7,807,800.00 30% 30% 40%
Revenue Synergies 143,599,782.78 50% 30% 20%
Total 123,931,311.39 176,950,846.22 216,391,182.78
 Merger Model – 100% Stock

Transaction's Assumptions (R$MM) Valuation (R$MM) Stone Linx Adjust. NewCo

Stock Price Linx (R$) 33.9 Earnings 307.56 71.10 - 378.66
Premium 10.0%
P/E FWD 42.97 45.16 - -
Price Paid per Share 37.3
Equity Value 35,636.89 5,384.90 - 41,021.79
Equity Value Acquired (R$MM) 5,923.4
Net Debt -232.50 -157.86 0.00 -390.36
Price Paid per Share in Cash (0%) -
Net Debt/EBITDA - - - -0.55
Price Paid per Share in Stock (100%) 37.3
Stock Exchange Ratio (Stone/Linx) 0.29 Enterprise Value 35,404.39 5,227.05 - 40,631.44
Total Debt Issued (R$) - EV/EBITDA FWD 22.77 24.70 - -

Ownership Structure Stone Linx NewCo

(Thousands of shares) Shares A Shares B % total Ações % total Adjust. Shares A Shares B % total

Stone Founders - 68,490.84 24.71% - - - - 68,490.84 21.19%

Madrone Partners 6,209.53 23,129.74 10.58% - - - 6,209.53 23,129.74 9.08%

Genesis Asset - - - 13,988.18 8.81% 4,061.28 4,061.28 - 1.26%

Linx Founders - - - 29,328.30 18.47% 8,515.08 8,515.08 - 2.63%

Others 119,487.91 59,861.98 64.71% 115,490.37 72.72% 33,531.11 153,019.01 59,861.98 65.85%

Total 125,697.44 151,482.56 100.00% 158,806.85 100.00% 46,107.47 171,804.91 151,482.56 100.00%
Accretion/Dillution Analysis – 100% Stock

Accretion/Dilution 2019E 2020E 2021E

Net Income STNE (R$ mm) 801.44 1,131.90 1,402.12
# Shares Outstanding (mm) 277.40 277.40 277.40
STNE Standalone EPS (R$/share) 2.89 4.08 5.05
Net Income LINX3.SA (R$ mm) 92.07 160.60 198.20
# Shares Outstanding (mm) 158.81 158.81 158.81
LINX3.SA EPS (R$/shares) 0.58 1.01 1.25
Combined Net Income (R$ mm) 893.51 1,292.50 1,600.32
Add'l Interest Expenses - - -
(-) 34% Tax Shield - - -
Operating Synergies 123.93 176.95 216.39
Post-tax Adjustments (R$ mm) 123.93 176.95 216.39
Pro-forma Net Income (R$ mm) 1,017.44 1,469.45 1,816.71
New Shares Issuance 46.11 46.11 46.11
Pro-forma Shares Outstanding (mm) 323.50 323.50 323.50
EPS Pro Forma (R$/share) 3.15 4.54 5.62

EPS Accretion/Dillution - R$ 0.26 0.46 0.56

EPS Accretion/Dillution - % 8.86% 11.32% 11.10%
Need/ (Buffer) for synergies for a neutral transaction $ 82.79 $ 149.41 $ 181.54

First Year Capture Second Year Capture Third Year Caputure

Sales Synergies 7,326,000.00 50% 25% 25%
G&A Synergies 57,657,600.00 80% 10% 10%
R&D Synergies 7,807,800.00 30% 30% 40%
Revenue Synergies 143,599,782.78 50% 30% 20%
Total 123,931,311.39 176,950,846.22 216,391,182.78
Upside (100% Stock)

Equity Value da STNE 35,636,889,527.37

Equity Value da LINX 5,384,901,903.68

Upsides 100% stocks (%)

Delta Earnings 216
Perceived Multiple 31.04
Total Synergies (Equity Value) 6,716.78
Equity Value (Linx) 5,384.90
Premium Tax 10.0%
Premium (R$) 538.49
Net Synergies NewCo 6,178.29
Participation in NewCo (Linx Shareholders) 14.3%
Linx's Shareholders Synergies 880.56
Additional Equity Value (Linx) 1,419.05
Participation in NewCo (Stone Shareholders) 85.7%
Stone's Shareholders Synergies 5,297.73
Additional Equity Value (Stone) 5,297.73
Upside Stone 14.87%
Upside Linx 26.35%
Sensibility Analysis