AKVA Group — M&A Activity 2018

Jun 28, 2018

AKVA group ASA: AKVA group ASA enters into agreement to acquire Egersund Net AS

AKVA group ASA: AKVA group ASA enters into agreement to acquire Egersund Net AS

Bryne, 28 June 2018: This announcement is made pursuant to section 3.4 of the

Oslo Børs' Continuing Obligations of stock exchange listed companies.

Reference is made to the announcement by AKVA group ASA ("AKVA or the "Company")

published on 15 May 2018 regarding the contemplated acquisition of the shares in

Egersund Net AS ("Egersund Net") from Egersund Group AS ("Egersund Group") (the

"Transaction").

AKVA, Egersund Group and Egersund Net have today signed a transaction agreement

(the "Agreement") under which AKVA, subject to the terms and conditions of the

Agreement, shall acquire 100% of all 500 issued and outstanding shares in

Egersund Net (the "EN Shares") from Egersund Group. The Transaction is expected

to be completed on or about 31 August 2018.

Parties to the transaction, transaction structure and consideration

Prior to completion of the Transaction, Egersund Group owns 100% of the EN

Shares. Further, Egersund Group owns 13,203,105 shares in AKVA, representing

approximately 51.1% of the share capital of AKVA. Upon completion of the

Transaction, Egersund Group's shareholding in AKVA will increase to

approximately 62.11% of the share capital of AKVA.

The consideration payable by AKVA to Egersund Group for the EN Shares is based

on an enterprise value of Egersund Net of NOK 742,256,000, and with customary

net debt- and working capital adjustments to reach the equity value (the

"Consideration"). The Transaction will be carried out by (i) the transfer of

350 EN Shares (constituting 70% of the shares capital of Egersund Net on a fully

diluted basis) from Egersund Group to AKVA on completion against the granting by

Egersund Group of a seller credit representing 70.7% of the Consideration; (ii)

the acquisition by AKVA of 150 EN Shares (constituting 30% of the share capital

of Egersund Net on a fully diluted basis) against a cash payment, representing

29.3% of the Consideration (the "Cash Consideration"); and (iii) the conversion

of the seller credit by issuance of 7,500,000 new AKVA shares at a subscription

price of NOK 70 per share (the "Consideration Shares"). The EN Shares will be

transferred from Egersund Group to AKVA together with all rights attaching to

them, free and clear of any encumbrances.

On completion of the Transaction, AKVA will pay an estimate of the Cash

Consideration. The final Cash Consideration shall be established after

completion upon the final determination of the adjustment amount in accordance

with the Agreement. The Cash Consideration will be paid using the Company's

existing cash reserves.

The conditional resolution by AKVA's extraordinary general meeting to issue the

Consideration Shares will be made on or about 14 august 2018. Egersund Group

shall subscribe for the Consideration Shares in a separate subscription form by

converting the seller credit on completion of the Transaction; expected to take

place on or about 31 August 2018.

Completion of the Transaction is subject to customary completion conditions,

including inter alia the following:

i. The general meeting of AKVA having approved the Agreement and the issuance

of the Consideration Shares;

ii. the parties not being in material breach of their obligations under the

Agreement at the time of completion;

iii. Egersund Net having conducted its business in the ordinary course and no

material adverse change having occurred since 31 December 2017;

iv. the Pre-Completion Transactions (as further described below) having been

completed on terms satisfactory to AKVA in its reasonable opinion;

v. Egersund Net having entered into lease contracts for certain specified

properties owned by Egersund Group and its subsidiaries on terms

satisfactory to AKVA in its reasonable opinion; and

vi. Egersund Group and/or Egersund Net having obtained the necessary written

third-party consents to the Transaction.

The Pre-Completion Transactions (see item iv above) involve that Egersund Group

will procure a transfer from Egersund Net and its subsidiaries (the "EN Group")

to Egersund Group and its subsidiaries of certain property assets held by the

EN Group, including (i) shares in the Turkish subsidiary Egersund Garymenkul LTD

and Egersund Rørvik Eiendom AS, and (ii) properties in Kristiansund, Austevoll,

Brønnøysund, Radøy (Manger) and, after completion of the Transaction, certain

properties in Taurage, Lithuania.

The Agreement otherwise contains terms customary in the Norwegian market,

including representation and warranties and indemnities given by Egersund Group.

Timetable

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15 May 2018 Signing of a letter of intent in relation to the

Transaction by AKVA and Egersund Group

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28 June 2018 Signing of the Transaction Agreement

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On or about 14 August 2018 Resolution by the extraordinary general meeting of

the Company to issue the Consideration Shares

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On or about 31 August 2018 Issuance of the Consideration Shares and expected

completion of the Transaction

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Significance of the Transaction for AKVA

The acquisition of Egersund Net represents a strategic milestone for the

Company, as Egersund Net complements AKVA's product and service offering, by

adding nets and moorings to the portfolio. Following completion of the

Transaction, AKVA will be able to serve its customers more efficiently and

develop the most optimal solutions for the complete life cycle of fish farming

as a more complete technology and service supplier with strengthened

geographical presence. Furthermore, Egersund Net's technology, products and

expertize will be given access to a wider geographical area through the

Company's global presence and distribution channels. The combined force within

technology and development will accelerate the work towards delivering efficient

and cost-effective solutions for the aquaculture industry, ensuring both optimal

fish welfare and the highest levels of productivity. AKVA expect significant

synergies, mainly within sales, both in the Nordic and in export markets

following completion of the Transaction.

Agreements to the benefit of board members or management in AKVA, Egersund Group

or Egersund Net

To the best of the Company's knowledge, there are no agreements entered into, or

that are planned to be entered into, in connection with the Transaction, for the

benefit of senior employees or members of the board of directors of AKVA, for

the senior employees or members of the board of directors of Egersund Group or

its subsidiaries, or for the senior employees or members of the board of

directors of the respective companies within the EN Group.

Information about Egersund Net

Egersund Net is a private limited liability company incorporated under the laws

of Norway with business registration number 976 555 708. Egersund Net is

headquartered in Egersund, Norway, and the EN Group currently has approximately

450 employees.

Egersund Net is a supplier of net technology, services and equipment for the

aquaculture industry. Egersund Net started net production in the early 1970's

and was established as a separate company in 1996. Over the last years Egersund

Net has expanded greatly with regard to business volume as well as the number of

newly established service stations. From the modest start in Svanavågen,

Egersund, the company has now a number of service stations along the coast of

Norway (Egersund, Austevoll, Manger, Kristiansund, Rørvik, Brønnøysund,

Vevelstad, Vesterålen and Skjervøy) to support fish farmers with repairs and

maintenance of the nets.

Through its subsidiary Egersund Trading, the EN Group offers work clothes, HSE

gear and mooring equipment from its outlets in Austevoll, Kristiansund and

Rørvik. Furthermore, the EN Group has recently added the Flexi-Panel to its

product range. Flexi-Panel is a revolutionary fish grading device designed to

allow size grading of live fish in the water; quickly, accurately and without

physical damage to the fish.

The production of new nets takes place in Tauragé, Lithuania through the

company's subsidiary UAB Egersund Net. The EN Group is certified according to NS

9415, ISO 9001:2015 and ISO:14001:2015.

The board of directors of Egersund Net currently consists of four individuals.

The names and positions and current term of office of the board members are set

out in the table below.

Name Position Served since Term expires

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Hans Kristian Mong Chairman 1996 2019

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Ingvald Fardal Board member 2009 2019

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Harald Røkenes Board member 2009 2019

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Jan Thore Hetland Board member 2014 2019

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The Company expects to make certain changes to the composition of the board of

directors of Egersund Net on completion of the Transaction.

The executive management of Egersund Net currently consists of eight individuals

as set out in the table below:

Name Position Employed since

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Geir Henning Risholm Managing Director 2010

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Jan Thore Hetland((1)) Finance Manager 2000

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Geir Kåre Tønnessen Sales Manager 1985

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Glenn Mo Service Manager 2006

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Anders Myklebust Production Manager 1988

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Helge Sivertsen((2)) Procurement Manager 2008

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Ove Veivåg Product Technical Manager 2005

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Bjarte Sævareid R&D Manager 2017

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(1) Jan Thore Hetland serves as finance manager pursuant to an agreement between

Egersund Net and Egersund Management AS in which Mr. Hetland is employed.

(2) Helge Sivertsen serves as procurement manager pursuant to an agreement

between Egersund Net and Egersund Management AS in which Mr. Sivertsen is

employed.

As of the date of this announcement, Egersund Net's share capital is NOK

2,500,000, divided on 500 shares, each with a par value of NOK 5,000 (to be

reduced to NOK 4,594 per share following completion of the Pre-Completion

Transactions).

Please find below certain (unaudited) consolidated key financial figures (all in

NOK thousand) for the EN Group. Figures for Egersund Net AS, Egersund Trading

AS, UAB Egersund and Grading Systems LTD are presented on a 100% basis while

figures for the associated companies Nofi Oppdrettsservice AS and Emel Balik

Ag1 are presented according to the equity method.

Year ended 31 December

2017 2016

In NOK thousand (unaudited) (unaudited)

Total revenue 601,355 584,716

Adjusted EBITDA((1)) 75,827 86,940

Total assets((1)) 427,419 457,011

Total equity((1)) 214,868 218,375

Total liabilities((1)) 212,551 238,635

(1) Please note that the properties, shares and corresponding liabilities to be

demerged in connection with the Pre-Completion Transactions are included in the

presented balance sheet figures. However, the figures for adjusted EBITDA

reflect future rental expenses on the lease agreements for these properties.

For further information on Egersund Net, please refer to

https://www.egersundnet.no.

* * *

For further information, please contact:

Hallvard Muri, Chief Executive Officer

Phone: +47 51 77 85 00

Mobile: +47 91 58 07 50

E-mail: hmuri@akvagroup.com

Simon Nyquist Martinsen, Chief Financial Officer

Phone: +47 51 77 85 00

Mobile: +47 91 63 00 42

E-mail: snmartinsen@akvagroup.com

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.