Bryne, 28 June 2018: This announcement is made pursuant to section 3.4 of the Oslo Børs' Continuing Obligations of stock exchange listed companies.
Reference is made to the announcement by AKVA group ASA ("AKVA or the "Company") published on 15 May 2018 regarding the contemplated acquisition of the shares in Egersund Net AS ("Egersund Net") from Egersund Group AS ("Egersund Group") (the "Transaction").
AKVA, Egersund Group and Egersund Net have today signed a transaction agreement (the "Agreement") under which AKVA, subject to the terms and conditions of the Agreement, shall acquire 100% of all 500 issued and outstanding shares in Egersund Net (the "EN Shares") from Egersund Group. The Transaction is expected to be completed on or about 31 August 2018.
Parties to the transaction, transaction structure and consideration
Prior to completion of the Transaction, Egersund Group owns 100% of the EN Shares. Further, Egersund Group owns 13,203,105 shares in AKVA, representing approximately 51.1% of the share capital of AKVA. Upon completion of the Transaction, Egersund Group's shareholding in AKVA will increase to approximately 62.11% of the share capital of AKVA.
The consideration payable by AKVA to Egersund Group for the EN Shares is based on an enterprise value of Egersund Net of NOK 742,256,000, and with customary net debt- and working capital adjustments to reach the equity value (the "Consideration"). The Transaction will be carried out by (i) the transfer of 350 EN Shares (constituting 70% of the shares capital of Egersund Net on a fully diluted basis) from Egersund Group to AKVA on completion against the granting by Egersund Group of a seller credit representing 70.7% of the Consideration; (ii) the acquisition by AKVA of 150 EN Shares (constituting 30% of the share capital of Egersund Net on a fully diluted basis) against a cash payment, representing 29.3% of the Consideration (the "Cash Consideration"); and (iii) the conversion of the seller credit by issuance of 7,500,000 new AKVA shares at a subscription price of NOK 70 per share (the "Consideration Shares"). The EN Shares will be transferred from Egersund Group to AKVA together with all rights attaching to them, free and clear of any encumbrances.
On completion of the Transaction, AKVA will pay an estimate of the Cash Consideration. The final Cash Consideration shall be established after completion upon the final determination of the adjustment amount in accordance with the Agreement. The Cash Consideration will be paid using the Company's existing cash reserves.
The conditional resolution by AKVA's extraordinary general meeting to issue the Consideration Shares will be made on or about 14 august 2018. Egersund Group shall subscribe for the Consideration Shares in a separate subscription form by converting the seller credit on completion of the Transaction; expected to take place on or about 31 August 2018.
Completion of the Transaction is subject to customary completion conditions, including inter alia the following:
The Pre-Completion Transactions (see item iv above) involve that Egersund Group will procure a transfer from Egersund Net and its subsidiaries (the "EN Group") to Egersund Group and its subsidiaries of certain property assets held by the EN Group, including (i) shares in the Turkish subsidiary Egersund Garymenkul LTD and Egersund Rørvik Eiendom AS, and (ii) properties in Kristiansund, Austevoll, Brønnøysund, Radøy (Manger) and, after completion of the Transaction, certain properties in Taurage, Lithuania.
The Agreement otherwise contains terms customary in the Norwegian market, including representation and warranties and indemnities given by Egersund Group.
Significance of the Transaction for AKVA
The acquisition of Egersund Net represents a strategic milestone for the Company, as Egersund Net complements AKVA's product and service offering, by adding nets and moorings to the portfolio. Following completion of the Transaction, AKVA will be able to serve its customers more efficiently and develop the most optimal solutions for the complete life cycle of fish farming as a more complete technology and service supplier with strengthened geographical presence. Furthermore, Egersund Net's technology, products and expertize will be given access to a wider geographical area through the Company's global presence and distribution channels. The combined force within technology and development will accelerate the work towards delivering efficient and cost-effective solutions for the aquaculture industry, ensuring both optimal fish welfare and the highest levels of productivity. AKVA expect significant synergies, mainly within sales, both in the Nordic and in export markets following completion of the Transaction.
Agreements to the benefit of board members or management in AKVA, Egersund Group or Egersund Net
To the best of the Company's knowledge, there are no agreements entered into, or that are planned to be entered into, in connection with the Transaction, for the benefit of senior employees or members of the board of directors of AKVA, for the senior employees or members of the board of directors of Egersund Group or its subsidiaries, or for the senior employees or members of the board of directors of the respective companies within the EN Group.
Information about Egersund Net
Egersund Net is a private limited liability company incorporated under the laws of Norway with business registration number 976 555 708. Egersund Net is headquartered in Egersund, Norway, and the EN Group currently has approximately 450 employees.
Egersund Net is a supplier of net technology, services and equipment for the aquaculture industry. Egersund Net started net production in the early 1970's and was established as a separate company in 1996. Over the last years Egersund Net has expanded greatly with regard to business volume as well as the number of newly established service stations. From the modest start in Svanavågen, Egersund, the company has now a number of service stations along the coast of Norway (Egersund, Austevoll, Manger, Kristiansund, Rørvik, Brønnøysund, Vevelstad, Vesterålen and Skjervøy) to support fish farmers with repairs and maintenance of the nets.
Through its subsidiary Egersund Trading, the EN Group offers work clothes, HSE gear and mooring equipment from its outlets in Austevoll, Kristiansund and Rørvik. Furthermore, the EN Group has recently added the Flexi-Panel to its product range. Flexi-Panel is a revolutionary fish grading device designed to allow size grading of live fish in the water; quickly, accurately and without physical damage to the fish.
The production of new nets takes place in Tauragé, Lithuania through the company's subsidiary UAB Egersund Net. The EN Group is certified according to NS 9415, ISO 9001:2015 and ISO:14001:2015.
The board of directors of Egersund Net currently consists of four individuals. The names and positions and current term of office of the board members are set out in the table below.
The Company expects to make certain changes to the composition of the board of directors of Egersund Net on completion of the Transaction.
The executive management of Egersund Net currently consists of eight individuals as set out in the table below:
(1) Jan Thore Hetland serves as finance manager pursuant to an agreement between Egersund Net and Egersund Management AS in which Mr. Hetland is employed.
(2) Helge Sivertsen serves as procurement manager pursuant to an agreement between Egersund Net and Egersund Management AS in which Mr. Sivertsen is employed.
As of the date of this announcement, Egersund Net's share capital is NOK 2,500,000, divided on 500 shares, each with a par value of NOK 5,000 (to be reduced to NOK 4,594 per share following completion of the Pre-Completion Transactions).
Please find below certain (unaudited) consolidated key financial figures (all in NOK thousand) for the EN Group. Figures for Egersund Net AS, Egersund Trading AS, UAB Egersund and Grading Systems LTD are presented on a 100% basis while figures for the associated companies Nofi Oppdrettsservice AS and Emel Balik Ag1 are presented according to the equity method.
Year ended 31 December
In NOK thousand
(1) Please note that the properties, shares and corresponding liabilities to be demerged in connection with the Pre-Completion Transactions are included in the presented balance sheet figures. However, the figures for adjusted EBITDA reflect future rental expenses on the lease agreements for these properties.
For further information on Egersund Net, please refer to https://www.egersundnet.no.
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For further information, please contact:
Hallvard Muri, Chief Executive Officer
Phone: +47 51 77 85 00
Mobile: +47 91 58 07 50
Simon Nyquist Martinsen, Chief Financial Officer
Mobile: +47 91 63 00 42
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.