TTS Marine ASA has entered into a letter of intent (”Heads of Agreement”) with Umoe Industri regarding takeover of Umoe Schat-Harding, which supplies lifeboats and other life-saving equipment to the shipping and offshore markets. The company had a turnover for the six months ending 30 June 2006 of NOK 236m, EBITDA at NOK 37m. The turnover is divided into NOK 93m on after sales and NOK 143m on new sales. Order backlog at 30 June 2006 for new sales was NOK 430m. Expected turnover and EBITDA in 2006 is NOK 450m and NOK 55m respectively.
The agreed purchase price is around NOK 360m, based on a net interest bearing debt of around NOK 30m, out of which NOK around 210m will be paid in cash that will be financed by debt and around NOK 150m financed by issue of 4 000 000 shares in TTS Marine ASA with a subscription price of NOK 37,71 per share based on average share price the last 5 trading days. After the execution of this agreement Umoe Industri’s equity share of TTS will be 16,5%.
The Heads of Agreement is subject to final approval of the Sale/ Purchase Agreement by 1 October 2006 by both companies’ board of directors. TTS shall conduct a due diligence review of the company during September.
Umoe Schat-Harding’s properties in Norway will at the same time be sold to Umoe for 20m NOK in a sale-leaseback agreement of 15 years to market conditions.
Lifeboats and security equipment will by takeover of Umoe Schat-Harding be established as a new division in TTS, headed by the present managing director, Ove Røsseland.
Umoe Industri’s basis for this transaction is to contribute to the development of TTS Group as an active and long-term shareholder. To facilitate active ownership, Umoe Industri AS will contemplate further acquisition of shares both before and after the execution of the agreement. Umoe Industri AS has for the time being no intention to get into a compulsory share offer position in the company.
The takeover of Umoe Schat-Harding is in accordance with TTS’ strategy of expanding through organic growth and acquisitions, and to become a
One-stop-shopping center for decks equipment on a global basis. As previously announced, TTS expects a turnover at approximately NOK 1.6 billions in 2006, which thus will pro forma exceed NOK 2 billion this year including Umoe Schat-Harding’s turnover.
The potential for increasing the joint business, both with respect to new sales and especially after sales- and service activities are considerable. Umoe Schat-Harding has its strength in the cruise segment as well as in the offshore market, whereas TTS mainly delivers to the regular merchant fleet. Together, the companies should increase sales of new products in these markets, and strengthen the effort with respect to service and after sales.
The new TTS Group will comprise five divisions: Dry Cargo Handling, Marine Cranes, Port and Material Handling and Deck Machinery in addition to the new division life boats and life-saving systems. The takeover will imply that TTS increases from 17 operating units in nine countries to a Group of 25 units in 12 countries. The new locations will be Singapore, The Netherlands and England. Also a global network of sales- and service representatives will be included into the TTS Group.
Due to this acquisition TTS will present 2Q figures the 22nd of August 2006 instead of 29th August as previously announced.
Enclosures: Accounts and other information concerning Umoe Schat-Harding.
Bergen 16.08.06
Contact persons:
President & CEO Johannes D. Neteland
Phone: +47 55 94 74 02 Mobile: +47 918 46 906
E-post: johannes.neteland@tts-marine.no
President Jarle Roth, Umoe Group Mobile: +47 917 92 985
E-post: jarle.roth@umoe.no