TTS Marine ASA has signed an agreement to purchase all shares in the Norwegian drilling technology company Sense EDM at a price of NOK 525 million. The company supplies drilling equipment and control systems for the on- and offshore markets.
- “The acquisition provides TTS with a new and promising mainstream activity, with considerable synergies in relation to the rest of the operation. The acquisition will also strengthen our presence in Norway”, says CEO Johannes D. Neteland.
The head office of Sense EDM AS is located in Kristiansand, with branches in Stavanger and Edmonton, Canada. The company has a total of 150 employees, of which 105 work in Norway, as well as 37 contracted employees. Turnover in 2006 was NOK 379 million, and earnings before depreciation (EBITDA) were NOK 27.3 million. Budgeted turnover in 2007 is NOK 600 million and EBITDA NOK 66.5 million. In the first quarter of 2007, turnover was NOK 145 million and EBITDA was NOK 18.1 million. The company’s order book is NOK 525 million.
TTS is one of the world’s leading suppliers of handling equipment for ships and ports. The group has resumed the production and supply of cranes to offshore vessels in 2007, and has also acquired a company that develops and supplies software and control systems for handling equipment offshore.
- “The acquisition of Sense EDM represents a major and significant step for further targeting the drilling and offshore markets. The company’s representation in Canada also implies new opportunities for TTS Group”, Mr Neteland points out. Sense EDM will be kept as a new division of TTS, and the Managing Director, Tom Fedog, will be the head of the new division and member of the Corporate Management Group.
Purchase price NOK 525 million
The sale and purchase agreement is final and binding for both parties. The purchase price of NOK 525 million is based on take-over of Sense EDM on a cash free and debt free basis. The purchase price is therefore adjusted upwards with a normalized cash position of NOK 120 million. An earn-out limited to NOK 75 million depending on results in 2007 and 2008 has been agreed in addition to the purchase price of NOK 525 million.
The purchase price will be financed by NOK 400 million of long-term debt and NOK 75 million in self-financing. NOK 50 million of TTS shares will also be issued to Sense EDM shareholders, at a subscription price of NOK 66.07, which is the average closing price from 16 April to 27 April. The transaction will be closed at 25 May 2007.
TTS has great potential
- ”We are taking a very positive view on being a part of TTS, as there is great potential regarding to both commercial and professional opportunities. As part of a group with representation in ten countries worldwide, Sense EDM will be in a much stronger position to market its products and services globally, and to obtain support in service and after-sales. The acquisition will also create synergies with regard to procurement”, Tom Fedog, Managing Director, says. Mr. Fedog has headed Sense EDM since its foundation in 2000, and together with co-founder Erik Zachariassen controls 27 per cent of the company.
Sense EDM develops and supplies complete drilling packages, drilling equipment and tubular handling systems. The acquisition will enable further growth and constitute significant synergy effects by enabling the new group to supply complete deliveries within drilling, deck equipment and cranes to fixed and floating rigs. The company will be among the three leading players in this market.
Growth in Norway
At the end of 2006, 177 of TTS's 651 employees were based in Norway, located in Bergen, Kristiansand and Drøbak. ICD Projects in Ålesund, with six employees, was taken over in January. The acquisition of Sense EDM will increase the number of employees in Norway to 290, out of a total of 780, and TTS will also be represented in Stavanger.
Facts on TTS Marine ASA
TTS Marine ASA is an international group that develops and supplies maritime equipment. The business is organised into four divisions; Dry Cargo Handling, Marine Cranes, Port and Material Handling and Deck Machinery. Sense EDM will constitute a fifth division in the group. The TTS group is one of the world leaders within its market segments.
With the acquisition of Sense EDM, the TTS group will have approximately 780 employees, with emphasis on engineering expertise. The group will have a total of 22 operational units in Norway, Sweden, Finland, Germany, the Czech Republic, Italy, China, USA, Canada and South Korea, including two joint venture companies in China. The company also has sales and representative offices in Vietnam.
The head office of TTS Marine ASA is located in Bergen, Norway and the company is listed on the Oslo Stock Exchange.
Contact persons:
President & CEO Johannes D. Neteland, TTS Marine ASA
Tel: +47 55 94 74 02 Mobile: +47 918 46 906
E-mail: johannes.neteland@tts-marine.no
Managing Director Tom Fedog, Sense EDM AS
Tel: +47 38 00 05 70 Mobile: +47 91 56 62 62
E-mail: tom.fedog@sense-edm.com