Eqva ASA

M&A Activity • Jun 28, 2023

Transaction announcement : Eqva and Kvinnherad Elektro sign letter of intent for a business combination agreement

Transaction announcement : Eqva and Kvinnherad Elektro sign letter of intent for a business combination agreement

Fosnavåg, 28 June 2023

Eqva ASA (OSE: EQVA) (“Eqva”) and Kvinnherad Elektro AS, a full-service power and automation company, have signed a letter of intent for a business combination agreement. The agreement includes Kvinnherad Elektro’s 51 percent ownership in Vassnes Solutions AS, a group of leading engineering, welding, power and automation services companies.

This move, which both companies consider to be of high strategic value, will result in the establishment of a prominent and fully integrated system supplier within the piping, power and automation disciplines. The agreement strengthens Eqva’s position as a leading supplier for the upcoming significant upgrade and restructuring of Norwegian industry. After consolidation, Eqva will consist of more than 600 highly qualified employees.

As of Q1-2023, Eqva reported an expected turnover for 2023 of between NOK 650-750 million and an order book of NOK 461 million. The merger will result in an increased turnover for Eqva of between NOK 125-175 million on an annual basis and an increased order book of NOK 120-140 million. The company will provide updated forecasts in relation to the 2nd quarter presentation in August.

Under the current plan, Eqva will acquire all shares of Kvinnherad Elektro AS in exchange for shares in Eqva’s wholly owned subsidiary, BKS Holding AS, along with a cash component. Further details regarding the settlement will be disclosed upon finalization of the business combination agreement. The subsidiary of EQVA will be listed on the Oslo stock exchange in the next 12-24 months.

The planned business combination will significantly increase Eqva’s capabilities and expertise in attractive power and automation markets. It will also increase the company’s flexibility to undertake major contracts in engineering, green transition and electrical services.

“With this move, Eqva continues to deliver on its strategy for growth and broadening of its service offering. This combination enhances Eqva’s access to attractive markets in Western Norway such as the smelting industry, maritime industry, and power and automation industry. We look forward to working with our new colleagues in both Ølen and Rosendal and will strive to further enhance our service offering for our valued customers,” said Erik Høyvik, CEO of Eqva.

The anticipated completion of the business combination agreement is set for Q3 2023, with the transaction becoming effective from Q4 2023.

“In addition to opening new market segments for Eqva, we will be able to leverage synergies between the companies involved. Kvinnherad Elektro and Vassnes Solutions have approximately 155 skilled professionals in total. In our subsidiary BKS we have 80 employees working in the power and automation segment. Together we will have a pool of approximately 240 skilled and experienced employees,” Mr. Høyvik added.

Following the transaction, both Kvinnherad Elektro and Vassnes Solutions will continue to operate under their current brand and management, ensuring a seamless continuation of their operations.

«We are excited to become part of Eqva. We have a history of close collaboration with Eqva’s subsidiary, BKS, and we operate in the same region and markets. This merger gives us an opportunity to increase our market share and strengthen the competence and quality of our services to both existing and new customers. We also see potential to undertake larger multidisciplinary projects in the future," said Kjetil Helvik, general manager of Kvinnherad Elektro.

A presentation which describes the planned transaction, the strategic rationale, and the combined business post-transaction is enclosed and available on www.eqva.no.

About Eqva:

Eqva ASA is a knowledge-based active owner of engineering, construction and service companies that contribute to the green transition in maritime, power intensive and renewable industries. The company is a fully integrated service and maintenance supplier for the Norwegian land-based and maritime industry.

The group has a well-diversified product and market portfolio, and further growth will be established through a combination of company-based development and utilization of synergies between the companies in the group. Key companies in the group are Havyard Leirvik, BKS Industry, and Fossberg Kraft, each building on decades of experience and widely recognized by clients in a broad range of industries.

About Kvinnherad Elektro:

Kvinnherad Elektro, with its over 80 years of experience, is a full-service supplier for power and automation installations. The company serves customers in the smelting industry, fish farming, shipyards, transport construction projects, and households. With a team of 40 employees, including skilled engineers and installation experts, Kvinnherad Elektro is recognised as a trusted partner in the power and automation industry.

About Vassnes Solutions:

Vassnes Solutions is a leading group of engineering, welding, and power and automation service companies. Vassnes Solutions and its three subsidiaries Vassnes Mechanical AS, Vassnes Power AS and Vassnes Engineering AS deliver high-quality services to various sectors within the land-based and maritime industry. The group consists of a total of 116 employees with electrical engineering, installation, and welding expertise.

For more information, please contact:

Erik Høyvik, Chief Executive Officer. Phone: +47 916 83 173

Even Matre Ellingsen, Chairman of the Board. Phone: + 47 990 05 500

This information is subject to the disclosure requirements pursuant to section 5 -12 of the Norwegian Securities Trading Act.