Eqva ASA

M&A Activity • Dec 6, 2023

Eqva ASA: Eqva signs a letter of intent to combine BKS and LOS into a market leading supplier in the sectors of piping, power and automation

Eqva ASA: Eqva signs a letter of intent to combine BKS and LOS into a market leading supplier in the sectors of piping, power and automation

Fosnavåg, 6 December 2023

Eqva ASA (OSE: EQVA) (“Eqva”) and LOS Group have signed a letter of intent for a business combination agreement.

The agreement includes the LOS Group’s 100 percent ownership in LOS Elektro AS and LOS Eiendom Bergen AS, as well as 51 percent ownership in LOS Cable Solutions AS and 53,3 percent ownership in Zinus AS. The anticipated completion of the business combination agreement is set for Q1 2024. The agreement is subject to completion of due diligence with satisfactory result for Eqva, approval of the board, as well as acceptable financing.

This strategic transaction, highly regarded by both companies, will establish a distinguished and fully integrated system supplier in the sectors of piping, power and automation, with a notable inclusion of high-voltage expertise. This partnership significantly fortifies Eqva's role as a prominent supplier to industrial customers in Norway. Following this merger, the Eqva Group will be composed of a formidable team of over 730 highly skilled professionals, and further strengthen its position in the industry.

As of Q3 2023, Eqva reported an expected turnover for 2023 of between NOK 600-700 million on a pro-forma basis, and an order book of NOK 504 million. The targeted LOS companies expect a full year turnover of approximately NOK 700 million in 2023. Eqva will provide guidance for 2024 in the Q4 2023 report.

Under the current plan, Eqva will acquire shares from the owners of LOS Group in exchange for shares in a newly established subsidiary of Eqva, along with a cash component. The subsidiary will simultaneously acquire the shares in BKS. Eqva’s ownership in the new subsidiary is expected to be 61 percent after the transaction. The current owners of LOS Group will own the remaining 39 percent. The combined entity will have an EV of approximately NOK 620 million. Further details regarding the settlement will be disclosed upon finalization of the business combination agreement. The new subsidiary of Eqva will be listed on the Oslo stock exchange in the next 12-18 months.

“With this move, Eqva continues to deliver on its strategy for growth and broadening of its service offering. This combination enhances Eqva’s access to attractive markets in Norway such as the smelting industry, maritime and landbased industry. We look forward to work with our new colleagues and will strive to further enhance our power and automation service offering for our valued customers,” said Erik Høyvik, CEO of Eqva.

“In addition to opening new market segments for Eqva, we will be able to leverage synergies between the companies involved. The LOS Group has approximately 370 skilled professionals in total. In BKS, we already have 80 employees working in the power and automation segment. Together we will have a pool of approximately 450 skilled and experienced employees in this segment,” Mr. Høyvik added.

Following the transaction, LOS will continue to operate under their current brand to ensure a seamless continuation of operations.

“We are excited to become part of Eqva. We have a history of collaboration with BKS, and we operate in the same region and markets. This merger gives us an opportunity to increase our market share and strengthen the competence and quality of our services to both existing and new customers. We also see potential to undertake larger multidisciplinary projects in the future,” said Jakob Særsten, CEO of LOS Group.

About Eqva:

Eqva ASA is a knowledge-based active owner of engineering, construction and service companies that contribute to the green transition in maritime, power intensive and renewable industries.

The group has a well-diversified product and market portfolio, and further growth will be established through a combination of company-based development, utilization of synergies between the companies in the group as well as value-creating M&A activities.

Key companies in the group are BKS and Fossberg Kraft, each building on decades of experience and widely recognized by clients in a broad range of industries.

Read more on www.eqva.no

About LOS:

LOS, with over 40 years of experience, is a full-service supplier for power and automation installations. The company serves customers in the smelting industry, fish farming, offshore, maritime and landbased industries, as well as households. With a team of 370 employees, including skilled engineers and installation experts, LOS is recognized as a trusted partner in the power and automation industry.

For more information, please contact:

Erik Høyvik, Chief Executive Officer. Phone: +47 916 83 173

Even Matre Ellingsen, Chairman of the Board. Phone: + 47 990 05 500

This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. The stock exchange announcement was published by Ask Haukaas, interim CFO, Eqva ASA, at the date and time as set out above.