AKVA group has entered into a letter of intent with Egersund Group regarding the acquisition of all shares in Egersund Net.
The purchase price to be paid by AKVA groups is based on an enterprise value (EV) of Egersund Net as of €78 million. The final purchase price will depend on amongst others customary adjustments for the net debt and working capital of Egersund Net at completion of the transaction.
Egersund Net produces nets and mooring solutions for the aquaculture industry, including top nets, tube nets and special products such as sweep nets, fish sorting and mort collector nets. The company has approx. 450 employees. The company has nine service stations along the coast of Norway, and production and service facilities in Lithuania and Turkey. The head office is in Egersund, a town in Rogaland county, Norway.
“Egersund Net complements AKVA group’s product”
Of the final purchase price, 70 percent is expected to be settled by issuance of 7.5 million shares in AKVA group to Egersund Group. The remaining 30 percent, subject to any completion adjustments, is expected to be settled by cash payment financed by existing facilities
“Egersund Net complements AKVA group’s product and service offering, by adding nets and moorings to the portfolio. Following completion of the transaction, AKVA group 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 AKVA group’s global presence and distribution channels,” AKVA group stated.
Expect significant sales synergies
The CEO of AKVA group, Hallvard Muri, comments: “We are extremely satisfied with this opportunity and are looking forward to working with Egersund Group to realize the transaction. During the last few years, we have seen the competition within cage based solutions getting increasingly tougher. 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. AKVA group expect significant sales synergies from the acquisition but it will require investments and continued commitment, and before that, making the transaction a reality will be top priority.”
The chairman of AKVA and 50 percent owner of Egersund Group, Hans Kristian Mong, comments: “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 percent of AKVA group. We still have a long term goal to be a majority owner in AKVA.”
The acting chairman in the transaction, Anne Breiby, comments: “The board is pleased to have made this move in the direction of building a larger, stronger and more geographically diverse company.”
Assuming final agreement on the transaction is reached, it is expected to be completed in the third quarter 2018. Pareto Securities is acting as financial advisor to AKVA group in connection with the transaction.