Nel ASA

M&A Activity • Oct 8, 2014

Diagenic ASA - Signed final agreement to acquire NEL Hydrogen AS - extended announcement

Diagenic ASA - Signed final agreement to acquire NEL Hydrogen AS - extended announcement

Oslo, 8 October 2014

Diagenic ASA - Signed final agreement to acquire NEL Hydrogen AS -

extended announcement

Reference is made to the stock exchange announcement made by Diagenic

ASA ("Diagenic" or the "Company") on 8 September 2014 regarding the

signed letter of intent to acquire New NEL Hydrogen Holding AS ("NEL

Hydrogen) and the notice of an extraordinary general meeting on 18

September 2014.

Following satisfactory due diligence, Diagenic is pleased to announce

that the Company has today signed a final share purchase agreement with

the shareholders of NEL Hydrogen to acquire NEL Hydrogen (the

"Transaction"). The agreement is subject to certain conditions,

including approval of the Transaction and the issue of consideration

shares by the extraordinary general meeting of the Company and the

approval of a prospectus in connection with the listing of the

consideration shares by the Financial Supervisory Authority of Norway

(No. Finanstilsynet).

The proposed Transaction represents a change in strategic direction for

the Company, as a new business area will be included. The existing

pharmaceutical activities of the Company will remain as a separate

business area within the Company.

Acquisition

Diagenic is acquiring 100% of the shares in NEL Hydrogen for a total

consideration of NOK 120 million. The Transaction will be financed

through NOK 40 million in cash and NOK 80 million in new shares of the

Company. The consideration shares to be issued will be valued at NOK

0.65 per share. The shares in the Company shall be subscribed for no

later than 31 October 2014. The shares of NEL Hydrogen shall be

transferred to the Company no later than 7 November 2014

The consideration shares shall be subject to an extensive lock up.

27,692,308 shares held by key employees have a total lock up of four

years and 27,692,307 held by these key employees have a total lock up of

two years. 6,153,846 shares held by management shareholders have a lock

up until 1 September 2016 and 61,538,462 shares held by non-management

shareholders have a lock up of one year

NEL Hydrogen

NEL Hydrogen is a global leader in the supply of hydrogen-based

electrolyser plants and hydrogen fuelling stations. The company dates

back to the 1920s when Norsk Hydro established its first hydrogen

generation installation for use in ammonia fertilizer production. The

company began commercial sales of electrolysers in the 1970s, and has

sold more than 500 electrolysers in a wide array of industries across

Europe, South America, Africa and Asia. The company has locations in

Notodden, Norway and has a global reach through its own sales

representatives and extensive agent network. The company has 22

employees. For further information regarding NEL Hydrogen, please refer

to the company's webpage www.NEL-hydrogen.com.

NEL Hydrogen's board of directors consists of Martin Nes (chairman),

Øystein Stray Spetalen, Lars Markus Solheim and Ole Arnt Lindgren. The

CEO of NEL Hydrogen is Lars Markus Solheim and CFO Erik Evju. Martin Nes

and and Øystein Stray Spetalen also serves on the board of the Company.

The following are key figures for the acquired company:

Income statement (NOKm) 2013 YTD Jul. 14 2014e

Sales

New sales n.a. 11,9 22,6

Aftermarket sales n.a. 33,3 52,2

Total sales revenue 34.1 45,2 74,7

EBITDA 12,7 11,6 18,7

EBITDA margin 37,2 % 25,7 % 25,0 %

EBIT 12,5 11,4 18,2

EBIT margin 36,7 % 25,1 % 24,4 %

Balance sheet (NOKm) 2013 YTD Jul. 14 2014e

Equity 6,2 21,7 n.a.

Assets 28,6 39,0 n.a.

NIBD 1,1 -3,6 n.a.

Equal treatment

As stated in the notice to the extraordinary general meeting, Diagenic's

shareholders Strata Marine & Offshore AS and Dallas Asset Management AS

are indirect sellers in the Transaction. Given that the sellers will

receive consideration shares, the Company has made careful

considerations with regard to the principle of equal treatment of its

shareholders. If the shareholders' meeting approves the transaction, the

consideration share issue will mean that the shareholders preemptive

rights to subscribe for new shares will be deviated from. The Company

has concluded that the Transaction is in the best interest of the

Company and the Company's shareholders. The purchase agreement has been

entered into on an arm's length basis, and the board has solicited a

separate independent review of the relative values under the Norwegian

Public Limited Companies Act section 3-8, the result of this review is

appended to the notice of the shareholders meeting. Though not a formal

requirement, the Company has decided to have the Transaction itself

approved by the shareholders. The final resolution concerning whether or

not the Transaction shall be concluded or not will therefore be made by

the shareholders. The board's recommendation is that the Transaction is

approved as proposed.

For further information, please contact:

Lars Christian Stugaard

Acting CEO

+47 23 01 49 06 / +47 47 63 05 22

lars.christian.stugaard@diagenic.com

This information is subject of the disclosure requirements pursuant to

section 5-12 of the Norwegian Securities Trading Act and section 3.4 of

the Oslo Stock Exchange's Continuing Obligations.