AF Gruppen — M&A Activity 2015

Mar 11, 2015

AF implements purchase of LAB AS

AF implements purchase of LAB AS

Reference is made to the stock exchange announcement

dated 18 December 2014, where it was reported that

AF Gruppen had signed a letter of intent regarding

LAB AS.

AF Gruppen (AFG) has today entered into a final

agreement to acquire 70 per cent of the shares in

LAB AS, and has simultaneously implemented the

acquisition of these shares. These shares have been

acquired from 15 of the company's existing

shareholders. These shareholders will continue to

own the remaining 30 per cent of the shares in the

company.

LAB is the leading building contractor in Western

Norway. AF Gruppen has not been engaged in building

activities in the Bergen area. Through this

acquisition of the LAB Group, AF will be ensured a

strong foothold also in Western Norway.

The price of the shares was NOK 700 million. Payment

will be made as follows:

- NOK 360 million has been paid in cash payment

today.

- NOK 200 million will be paid by issuing 2,702,703

new shares in AF Gruppen ASA. These shares are

expected to be issued within one week from today.

- NOK 140 million will be granted as a sellers'

credit through to 2018.

- Guarantees have been issued in respect of future

performance.

The cash payment that forms part of the settlement

is financed through AF Gruppen's current liquid

holdings.

LAB AS is the parent company of a group where the

largest subsidiary companies are LAB Entreprenør AS,

Åsane Byggmesterforretning AS, Fundamentering AS and

LAB Eiendom AS. LAB Entreprenør AS is the largest

building contractor in the Bergen region. The

company's registered head office is in Bergen and it

is active in Western Norway. In 2014, the company's

revenue amounted to NOK 1,217 million and it

employed 135 employees. Åsane Byggmesterforretning

AS is the leading building company in Bergen with

revenue totalling NOK 336 million in 2014. It has

100 employees. Fundamentering AS carries out

assignments throughout the country in the fields of

piling, sheet piling, drilling and anchoring. The

company's head office is in Heimdal, near Trondheim,

and in 2014 it had revenue of NOK 242 million. It

employs 70 employees. LAB Eiendom AS develops

centrally-located properties close to Bergen's

approach roads. Currently, the company has a stake

in five housing projects with a potential to sell

approximately 20,000 square metres housing, in

addition to a 33,000 square metres site that is

regulated for commercial use.

The following shows the key consolidated figures

that LAB AS has reported (NGAAP):

Figures in NOK million 2014 2013 2012

Operating revenue 1 761 1 615 1 334

Operating expenses 1 622 1 506 1 229

Earnings before deprec. 159 122 115

Operating profit(EBIT) 138 109 106

Ord. profit before tax(EBT) 144 119 114

Ordinary profit 102 87 80

Of which minority interests' 14 11 7

Total fixed assets 163 121 33

Total current assets 992 608 570

Total assets 1 155 729 603

Total equity 188 154 122

Total long-term liabilities 174 145 63

Total current liabilities 793 430 418

Total equity and liabil. 1 155 729 603

In connection with AF Gruppen's annual report for

2014 pro forma accounts will be prepared for 2014

pursuant to AF Gruppen's accounting principles

(IFRS) which may deviate somewhat from these

figures.

LAB AS's Board of Directors is made up as follows:

Trygve Mo (Chairman of the Board)

Jarle Hus (Vice Chairman)

Jostein Brosvik (Member)

Hans Skorpen (Member)

Gard Kvalheim (Member)

Lasse Smilden (Member)

Managing Directors of LAB group are as follows:

LAB AS: Trygve Mo

LAB Entreprenør AS: Trygve Mo

Åsane Byggforretning AS:Frank Ståløy

Fundamentering AS: Tormod Stigen

Lab Eiendom AS: Stig Hole

LAB group has 305 employees.

No agreements have been entered into that are

beneficial to senior employees in or members of the

boards of AF Gruppen and LAB group in connection

with this transaction, nor are any such agreements

expected to be entered into in connection with the

transaction.

"We are very pleased to have the largest and most

successful building contractor in the Bergen area

join our team. The process since the letter of

intent was signed in December and through to the

final agreement today has been very good. This has

further strengthened our belief in the company. This

acquisition is one of the largest in the history of

AF Gruppen and by doing this we take a big step

towards becoming the leading contractor in Western

Norway", says Pål Egil Rønn, CEO of AF Gruppen

For further details, please contact:

Pål Egil Rønn, CEO. Telephone +47 90 95 77 13

Sverre Hærem, CFO. Telephone + 47 95 24 51 67