Fjordkraft acquires Switch Nordic Green and becomes a Nordic electricity retailer29 October 2020 Fjordkraft Holding ASA (the "Company" "Fjordkraft ")) has entered into an agreement for the acquisition of 100% of the shares in Troms Kraft Strøm AS ("Target") and its subsidiarySwitch Nordic Green AB ("SNG") (the "Transaction"), from the current ownerTroms Kraft AS . Key information about SNG: oSNG is a Nordic electricity retailer with operations in bothSweden andFinland , around 60 employees and their headquarter is located inStockholm, Sweden . oSNG had a total number of electricity deliveries of 167 thousand as per31 August 2020 , of which 100 thousand inFinland and 67 thousand inSweden . 27 thousand of the consumer deliveries inSweden are through a 3rd party agent. oThe deliveries are split 78/22 between the Consumer and Business segment. oSNG has an estimated market share of 2.8% inFinland and 1.2% inSweden . o2019 EBIT for SNG wasSEK 52m , and underlying EBIT (ex. Covid-19 effects) is estimated to SEK ~50m. Strategic rationale oThe acquisition positionsFjordkraft for further growth in the Nordics, as the markets become more similar and competition becomes increasingly pan-Nordic. The presence of our tech spin off Metzum AS, through its subsidiaryMetzum AB , also supports further Nordic expansion. oIncreased attractivity in the pan-Nordic business segment and potential for increased sale of value added services. oSwitch Nordic Green, with its brand Nordic Green Energy, is perceived as a green and renewable focused supplier - a good basis for further growth and a strong match withFjordkraft's brand position. oProfessional and experienced management with detailed knowledge of the Swedish and Finnish market. The key terms of the Transaction are as follows: oThe Transaction will be structured as an acquisition of all shares in the Target by the Company, fromTroms Kraft AS (the "Seller"). Other non-SNG related assets will be taken over by Seller in advance of closing, so that Target's only material asset at the time of closing is the shares in SNG. oThe purchase price is based on an enterprise value of the Target ofNOK 375 million on a cash and debt free basis and assuming an agreed normalised level of working capital. In addition to the enterprise value ofNOK 375 million , there are tax losses carried forward in the Target and its subsidiary. The value of the tax losses carried forward and the final purchase price will be decided through SNG's tax assessment for 2020. The purchase price payable for the shares will follow a typical ´locked box´ mechanism, and will be finally calculated based on a set of audited accounts for the Target to be established as per31 August 2020 . An interest will accrue on the purchase price payable in cash from31 August 2020 until closing of the Transaction. oThe purchase price shall be paid in cash by the Company toTroms Kraft AS . The acquisition is expected to be financed by long-term debt throughFjordkraft's existing available facilities and available cash. The completion of the Transaction is not subject to financing. oThe Seller bear all risk and cost associated with any ongoing conflict or dispute. oCompletion is subject to certain customary closing conditions for transactions of this type, including completion of the pre-closing reorganisation of Target by transfer of assets. oClosing of the Transaction is expected to take place inNovember 2020 , subject to satisfaction of the closing conditions. For queries, please contact:Morten A. W. Opdal , Head of Controlling and Investor Relations, +47 970 62 526 Important information Thisstock exchange release contains certain forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty, as they reflect current expectations and assumptions as to future events and circumstances that may not prove accurate. A number of factors could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. Thisstock exchange release is not for distribution, directly or indirectly, in or intothe United States ,Canada ,Australia ,Japan or any other jurisdiction in which such distribution would be unlawful or would require registration or other measures. Thisstock exchange release does not constitute an offer for sale of securities in any jurisdiction. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933 (the "U.S. Securities Act"), and may not be offered or sold inthe United States except pursuant to an exemption from the registration requirements of theU.S. Securities Act. There will be no public offer of securities inthe United States . This information is subject of the disclosure requirements according to section 5-12 of the Norwegian Securities Trading Act.
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