Aquaculture cages developed by AKVA Group. (Photo: AKVA)
AKVA agrees on acquisition of Egersund Net
Wednesday, May 16, 2018, 23:00 (GMT + 9)
AKVA Group has entered into a letter of intent with Egersund Group regarding the acquisition of all shares in Egersund Net AS with the aim of developing optimal solutions for the complete fish farming life cycle.
“Our customers are expecting nothing but the best, and by joining forces we will have the best basis for strengthening our combined value proposition which will make our customer interactions and interfaces more efficient. This will also enable us to accelerate the development work to optimize our total cage, net and mooring solutions,” pointed out AKVA group’s CEO Hallvard Muri.
The final purchase price will depend on among others customary adjustments for the net debt and working capital of Egersund Net AS at completion of the transaction.
Of the final purchase price, 70 per cent is expected to be settled by issuance of 7.5 million shares in AKVA to Egersund Group AS and the remaining 30 per cent, subject to any completion adjustments, is expected to be settled by cash payment financed by existing facilities.
Egersund Net AS complements AKVA's product and service offering, by adding nets and moorings to the portfolio.
AKVA’s Board considers that Egersund Net's technology, products and expertise will be given access to a wider geographical area through AKVA'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 informed that the pro-forma revenues for the acquired business are preliminarily estimated based on figures reported by Egersund Net AS, which were NOK 586 million (USD 72.5 million) and NOK 603 million (USD 74.7 million) for 2016 and 2017, respectively.
Similarly, the pro-forma adjusted EBITDA for the corresponding years is preliminarily estimated as NOK 88 million (USD 10.9 million) and NOK 76 million (USD 9.4 million).
For 2018, revenues are expected to grow by 10-15 per cent with an EBITDA margin in the range of 14-16 per cent, excluding any synergies from combining the businesses.
"We have strong belief in Egersund Net and in AKVA group on a stand-alone basis, but even stronger belief in them together. To participate in the value creation from this acquisition, taking a high proportion of the settlement in shares, is a prerequisite. Assuming we will reach a final agreement, we will own approximately 62 per cent of AKVA group. We still have a long term goal to be a majority owner in AKVA," stressed the chairman of AKVA and 50 per cent owner of Egersund Group, Hans Kristian Mong.
Assuming final agreement on the transaction is reached, it is expected to be completed in the third quarter 2018.