AF Gruppen

M&A Activity • Jan 2, 2019

AF closes HMB Holding AB acquisition

AF closes HMB Holding AB acquisition

Reference is made to the stock exchange announcement dated 15 October 2018, where AF Gruppen announced a signed letter of intent regarding HMB Holding AB.

AF Gruppen Sverige AB, a subsidiary of AF Gruppen ASA (AFG), has today entered into a final agreement to acquire 70 per cent of the shares in HMB Holding AB (HMB), and has simultaneously completed the acquisition of these shares. Employees of HMB will continue to own the remaining 30 per cent of the shares in HMB. The sellers of the shares in HMB Holding AB are 13 employees in HMB through their respective investment companies. All the sellers will continue both as employees in HMB and as owners of HMB Holding AB.

The acquisition is based on an agreed enterprise value (100 per cent) for HMB of SEK 600 million. The consideration for the 70 per cent of the shares acquired by AF Gruppen Sweden AB consists of:

• An amount of SEK 286 400 000, which has been paid in cash as part of the closing of the acquisition;

• An amount of SEK 100 000 000, which will be settled by way of issuance of 736 911 new shares in AF Gruppen

ASA at a share price of NOK 130.50 per share;

• An amount SEK 64 400 000, which will be paid in cash within 10 business days of the completion of the

annual accounts of HMB for 2020 subject to satisfaction of certain guarantees as to the performance of HMB

in the period from 1 January 2018 to 31 December 2020.

The cash components of the consideration will be financed by AF Gruppen's available liquidity.

The consideration shares are expected to be issued on or about January 2. 2019.

In addition to the above announced transaction, AF Gruppen Sverige AB has also acquired 3.4 per cent of the shares in HMB Construction AB, a 92 per cent owned subsidiary of HMB Holding AB. The sellers of the shares in HMB Construction AB are 69 employees in HMB Construction AB and they will all continue as owners and employees in HMB Construction AB after the transaction.

HMB is a successful construction company, established in 1994, with roots in Dalarna, Sweden. HMB is involved in both commercial and residential construction under all types of contracts in the market. HMB has operations in Stockholm/Mälardalen and Dalarna, Västmanland, Uppland and Gästrikland. All of the owners are active in the business. HMB will be a subsidiary of AF Gruppen Sverige AB, where AF Gruppen's Swedish operations are organised. Other Swedish AF companies include AF Bygg Göteborg, AF Bygg Syd, AF Projektutveckling, Kanonaden Entreprenad with subsidiaries, AF Härnösand Byggreturer and Pålplintar. The acquisition will strengthen AF Gruppen's presence in the Swedish construction market and is an important step in AF Gruppen's ambition to grow in Sweden.

As from today, the board of directors of HMB has the following members: Andreas Rydbo, Bård Konrad Frydenlund, Sverre Hærem, Krister Karlsson, Per Wiker and Fredrik Nyhren. The main senior management of HMB is Krister Karlsson (CEO), Magnus Nordström (Dept. Mgr.), Tommy Lövenvik (Dept. Mgr.), Fredrik Wahlberg (Dept. Mgr.), Per Wiker (Dept. Mgr.), Fredrik Nyhren (Dept. Mgr.) and Staffan Hemström (Dept. Mgr). HMB has 292 employees.

All members of HMB's senior management have sold shares to AF Gruppen Sweden AB, through their respective investment companies, as part of the transaction. Expect for this, no agreements have been entered into with any board members or senior executives of HMB in connection with the acquisition.

No agreements have to be entered into with any board members or senior executives of AF Gruppen in connection with the acquisition.

The table below sets out selected key financial information for HMB:

MSEK 2017 2016 2015

Revenue 1,317 1,064 847

EBIT 101 75 41

EBIT-margin 7.7% 7.1% 4.9%

Net profit 79 62 32

Total assets 473 419 266

Equity 141 117 85

"We are very happy to have HMB on our team. The company has delivered good results over time and has a culture and core values that coincide with ours. This acquisition is in accordance with our strategy towards 2020, which implies profitable growth initiatives in Sweden," says Morten Grongstad, CEO of AF Gruppen.

For further information:

CEO Morten Grongstad, tel. +47 991 53 905

EVP Sweden Bård Konrad Frydenlund, tel. +47 918 68 621

EVP & CFO Sverre Hærem, tel. +47 952 45 167