Nekkar — M&A Activity 2018

Feb 8, 2018

TTS Group ASA: Signing of asset sale agreement - detailed stock exchange announcement

TTS Group ASA: Signing of asset sale agreement - detailed stock exchange announcement

Today, TTS Group ASA (the "Company" or "TTS") has signed an asset sale agreement

with MacGregor, a part of Cargotec Oyj, which is a company listed on Nasdaq

Helsinki Stock Exchange. The agreement implies a takeover by MacGregor of all of

TTS' assets except for TTS Group ASA and its subsidiary TTS Syncrolift AS, which

will become a cornerstone in the development of the Company after the

divestment. The purchase price is MNOK 840, subject to working capital and net

debt adjustments at closing, and shall be settled in cash.

"The ships equipment industry is moving towards larger, integrated units with

global presence, offering a broader scope of products and services. In order to

meet this challenge, a combination of TTS' marine and offshore activities with

MacGregor will be an important step in the consolidation process, and is

expected to be favorable to all TTS stakeholders in the long term", says TTS

Group CEO Toril Eidesvik.

TTS, proposed to be renamed Nekkar ASA, will build its operation around Business

Unit Shipyard Solutions with its Syncrolift brand, and additionally seek new

investment opportunities building on the heritage of TTS, access to exciting

technology and knowledge clusters in Norway, together with a strong and

committed management team.

Each future portfolio investment will be targeted to grow by both organic

expansion and accretive acquisitions. The ownership can be based on either 100%

ownership, majority ownership with majority vote and key rights or have a

significant minority stake, normally with a strong shareholder agreement with

veto rights in the portfolio companies.

Through industry network, operational focus through active ownership,

digitalisation competence and business-building skills - Nekkar has the ability

to create value for its shareholders.

An extraordinary general meeting in the Company to approve the transaction and

change the Company's name will be called later today and be held on 12 March

The Board of Directors will propose a significant dividend to the shareholders

when the transaction is completed.

Parties to the transactions, transaction structure

The transaction is structured as an asset purchase agreement between the Company

as seller and various companies within MacGregor as buyers.

Under the agreement, the Company shall transfer the following business to

MacGregor (the "Business"):

(a)        the shares in all subsidiaries of the Company except for the shares

in TTS Syncrolift AS;

(b)        certain contracts;

(c)        certain IT systems; and

(d)        certain intellectual property rights (including the TTS trademarks,

logos and domain names).

Completion of the transaction is conditional on (i) approval by the Company's

extraordinary general meeting with two-thirds majority (pre-acceptances from

more than 2/3 of the shareholders have already been secured, and bondholders

representing more than 2/3 of outstanding convertible bonds have also committed

to consent to the transaction in the event that they should convert their bonds

to shares prior to the above mentioned extraordinary general meeting) (ii) the

transaction being cleared by the competition authorities in Norway, Germany,

Austria, South Korea and China on or before 30 September 2018 unconditionally or

on conditions which are acceptable to MacGregor. The Company has given

warranties which are in line with market practice for similar transactions.

Further details will be included in an information memorandum to be published

later.

Consideration and settlement model

The purchase price is MNOK 840, subject to working capital and net debt

adjustments at closing, and shall be settled in cash. Based on 3Q 2017

financials, the transaction will be equivalent to NOK 7.0 per share on an

undiluted basis and NOK 6.6 per share on a fully diluted basis.

Timetable

The transaction is subject to approvals from relevant competition authorities.

The approval process will start immediately. All approvals are expected within

the third quarter of 2018.

Significance of the transaction for TTS

If completed, the transaction will reduce the total Company activity by

approximately 90% as measured by revenue 2016 and year to date 3Q 2017. The

Business also represents the majority of the Company's assets.

Shipyard Solutions with its Syncrolift brand, the remaining business unit in the

TTS Group, is a leading ship lift provider. 2016 revenues were MNOK 189, and

EBITDA MNOK 28. Year to date 3Q 2017 results were revenues of MNOK 153 and

EBITDA of MNOK 25. The 2016 numbers exclude revenues and EBITDA from Liftec OY,

of MNOK 109 and MNOK 8 respectively. Liftec OY was sold in 1Q 2017. The

Syncrolift business has developed positively throughout 2017, and the high

activity levels are expected to continue in 2018 on the back of a strong order

book, high utilization of resources, and a strong market.

Nekkar ASA will continue as the holding company for Syncrolift and the future

portfolio companies. It will be scaled (staff and cost base) in accordance with

the operating requirements of the business going forward. The preliminary

assessment indicates a cost level of approximately NOK 15 million per year.

Agreements to the benefit of board members or management in TTS

Trym Skeie, Chairman of the Board of Directors, is directly and indirectly a

major shareholder in the Company. Board member Gisle Rike is employed by

Rasmussengruppen AS, which is a major shareholder in the Company.

As per 8 February 2018, 27,109,124 shares in TTS are indirectly held by Trym

Skeie through Skeie Technology AS, Skeie Capital Investment AS and Skeie Alpha

Invest AS. In addition, Trym Skeie holds 323,140 TTS shares directly.

As per 8 February 2018, 11,512,506 shares in TTS are held by Rasmussengruppen

AS.

Under her current bonus agreement, Toril Eidesvik, CEO of the TTS Group, will be

entitled to a bonus equal to 50% of her base salary upon closing of the

transaction.

Summons to EGM

The Board of Directors of the Company will today summon the Company's

shareholders to an extraordinary general meeting to be held on 12 March 2018 to

approve the transaction. The notice will be attached to a separate stock

exchange announcement to be released later today.

Pareto Securities AS acted as financial advisor to TTS Group ASA in the

transaction while Wikborg Rein Advokatfirma AS acted as legal advisor.

Attachments: Additional information about TTS and Press Release attached.

Bergen, 8 February 2018

TTS Group ASA

http://www.ttsgroup.com

Contact persons:

Toril Eidesvik

CEO

M: +47 900 78 218

Leiv Kallestad

CFO

M: +47 958 95 661

This information is subject to the disclosure requirements pursuant to section

3.4 of the Continuing Obligations for Companies listed on Oslo Børs.

This information is subject to the disclosure requirements pursuant to section

5 -12 of the Norwegian Securities Trading Act.