Nel ASA

M&A Activity • Sep 8, 2014

DIAG - Signed letter of intent to acquire NEL Hydrogen AS

DIAG - Signed letter of intent to acquire NEL Hydrogen AS

DIAG - Signed letter of intent to acquire NEL Hydrogen AS

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART

DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES

Oslo, 8 September 2014

Diagenic ASA ("Diagenic" or the "Company", ticker "DIAG") has entered

into a non-binding letter of intent ("LOI") with the shareholders of NEL

Hydrogen AS ("NEL Hydrogen") to acquire the shares of NEL Hydrogen for a

total consideration of approximately NOK 120 million on an enterprise

value basis (the "Acquisition"). NEL Hydrogen has limited net debt. The

Acquisition will be financed through NOK 40 million in cash and the

remainder in new shares of Diagenic. The consideration shares to be

issued will be valued at NOK 0.65 per share. The proposed acquisition

represents a change in strategic direction for Diagenic to include a new

business area. The existing pharmaceutical activities of Diagenic will

remain as a separate business area within the Company.

NEL Hydrogen is a global leader in the supply of hydrogen-based

electrolyser plants and hydrogen fuelling stations. The company dates

back to the 1920s when Norsk Hydro established its first hydrogen

generation installation for use in ammonia fertilizer production. The

company began commercial sales of electrolysers in the 1970s, and has

sold more than 500 electrolysers in a wide array of industries across

Europe, South America, Africa and Asia. The company has locations in

Notodden, Norway and has a global reach through its own sales

representatives and extensive agent network. For further information

regarding NEL Hydrogen, please refer to the company's webpage www.nel

-hydrogen.com.

NEL Hydrogen is majority owned by employees and Strata Marine & Offshore

AS and associated companies.

In order to secure growth capital for the new business area resulting

from the Acquisition, the Board of Directors proposes to raise NOK 70

million through a i) NOK 35 million private placement ("Private

Placement"); and ii) NOK 35 million rights issue ("Rights Issue"). The

Private Placement and the Rights Issue are both fully underwritten by

large existing shareholders on ordinary market terms. Underwriters

include existing shareholders Strata Marine & Offshore AS, Storebrand,

Alfred Berg, Tigerstaden AS, Alpine Capital, AS, Spar Kapital Investor

AS, Håkon Sæther, Dallas Asset Management AS, Kristianro AS and AB

Investment.

The subscription price per new share in the Private Placement and the

Rights Issue will equal the issue price of the consideration shares to

be issued to the NEL Hydrogen shareholders, i.e. NOK 0.65 per new share.

The Rights Issue will be directed to the Company's existing shareholders

as of the date of the EGM (defined below). Transferable subscription

rights will be issued and listed on the Oslo Stock Exchange. The

subscription period in the Rights Issue has tentatively been set to the

latter part of October 2014.

The proposed Acquisition is subject to satisfactory due diligence and

the signing of a definite share purchase agreement, as well as

shareholder approval at an Extraordinary General Meeting in Diagenic

expected to be held in the first half of October 2014 (the "EGM"). The

Acquisition is expected to be completed in mid-October 2014, given

fulfilment of the abovementioned conditions. The proposed share issues

are subject to approval of both transactions and the Acquisition by the

EGM. A separate notice convening for the EGM will be sent out in due

course.

Carnegie AS acts as financial advisor in connection with the

Acquisition, the Private Placement and the Rights Issue.

For further information, please contact:

Lars Christian Stugaard

Acting CEO

+47 23 01 49 06

This information is subject of the disclosure requirements pursuant to

section 5-12 of the Norwegian Securities Trading Act.