Akastor — M&A Activity 2017

Jun 12, 2017

Appendix:

This appendix forms part of the stock exchange announcement of June 12, 2017 and is prepared in accordance with the requirements of the Oslo Stock Exchange Continuing Obligations section 3.4.

The transaction

Akastor has entered into a definitive agreement to sell the business of KOP Surface Products to Weir Group Plc for USD 114 million on a debt- and cash-free basis.

The completion of the transaction is subject to customary closing conditions. The transaction is expected to close during Q3 2017.

Description of KOP Surface Products

KOP Surface Products is a supplier of surface wellheads, trees, valves and actuators to the oil and gas industry. KOP provides full life-of-field support to customers, including installation, maintenance, rental and refurbishment services. The client list includes some of the largest companies in the industry and the products and quality programs comply with the highest international standards.

KOP Surface Products offers a complete range of surface wellheads, X-mas trees, gate valves, actuators, casing heads, hangers and spools, tubing hangers, spools and adaptors, bushing and annulus seals, tees and crosses, tree caps, mudline suspension systems and other miscellaneous equipment and tools required for surface well completions. The company has its headquarters in Singapore and its main manufacturing facility in Batam, Indonesia, which is comprised of a manufacturing plant, warehouse and office complex.

KOP Surface Products have about 450 employees, with offices in Singapore, Indonesia, Malaysia, Thailand, Vietnam, Qatar, UAE, Saudi Arabia and India.

Business units in scope of transaction

The majority of the assets and liabilities of the portfolio company KOP Surface Products.

Key financials

Key financials for KOP Surface Products are summarised in the following table.

In USD million	Q1 17	Q1 16	2016	2015	2014
Revenue	9	14	39	138	174
EBITDA	1	2	3	32	28
EBITDA margin	9%	16%	7%	23%	16%
EBIT	(1)	1	(4)	24	21

Key balance sheet items

In USD million	Q1 17	2016	2015	2014
Non-current assets	41	41	39	38
Cash and cash equivalents	15	13	11	5
Other current assets	22	19	35	79
Total assets	77	74	85	121
Equity	56	54	71	87
Non-current liabilities	2	9	3	4
Current liabilities	19	11	12	31
Total equity and liabilities	77	74	85	121

Executive management and Board of Directors

The current senior management team of KOP Surface Products is

• Gordon Cameron, CEO
• Eirik Fadnes, CFO
• Paul Haggart, General Manager (Eastern Region)
• David Finister, General Manager, Batam Facility
• Raja Setlur, Quality Manager
• Goh Choon Ngee, Engineering Manager
• Steve Moulder Business Development Manager (Western Region)
• Shaun Bradley Sales and Operations Leader (Western Region)
• Daniel Tay Tender Manager

Other than customary retention arrangements for defined senior employees in order to secure orderly and fast completion and transition of the transaction, no agreements have been entered into or are expected to be entered into in connection with the transaction.

The current Board of Directors of KOP Surface Products AS comprises Mark Riding, Eivind Høiback, David Merle and Erik Otto Nyborg. The buyer will appoint a new Board of Directors as of closing.

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This release may include forward-looking information or statements and is subject to our disclaimer, see http://www.akastor.com/Terms-of-use/