NRC Group — M&A Activity 2017

Mar 31, 2017

NRC Group ASA acquires Signal & Banbyggarna i Dalarna Aktiebolag

NRC Group ASA acquires Signal & Banbyggarna i Dalarna Aktiebolag

NRC Group ASA ("NRC Group" or the "Company") has on 30 March 2017

entered into a binding term sheet with the shareholders of the

railway infrastructure and signal company Signal & Banbyggarna i

Dalarna Aktiebolag ("SBB") to acquire all shares in SBB.

SBB carries out construction work and project- and site management

within railway infrastructure and signalling, as well as groundwork.

The company currently has some 90 employees, with knowhow and

extensive experience from project management. NRC Group knows the

company well from cooperation on several projects and the

experienced management team will strengthen the Swedish organisation

and bring desired capabilities to the group within its core

segments.

The acquisition of SBB improves the competitiveness of NRC Group's

Swedish operations. It will widen the geographical footprint to

include Stockholm, Skåne and Northern Sweden, adding to NRC Group's

already established position in the regions of Karlstad and

Gothenburg.

"SBB is an excellent addition to our Swedish operations. They

strengthen our position as a turnkey entrepreneur within railway

infrastructure services. Together we will now effectively cover the

whole Swedish market," said Øivind Horpestad, the CEO of NRC Group.

A new transport package for the central Stockholm, including a new

subway line and a new railway tunnel, which would connect more than

100,000 new homes in the Capital, has been approved. The package is

expected to cost about SEK 25 billion, with all projects initiated

by 2026. The unified NRC Group and SBB would be well positioned to

participate in this development.

The CEO of SBB, Pär Opard, is an engineer with 35 years of

experience from the infrastructure sector, and will become a member

of the Swedish management. He has mainly focused on business

development and project management. He has held leading positions at

companies such as Vägverket Konsult, EQC Group, ÅF Infrastructure,

representing both the public sector and private companies.

SBB was founded in 2006 and the company has an established

organization with significant experience within project management,

and offers the full width of specialized railway services including

groundwork, signal & telecom, electro, safety, track and machines.

SBB is located at six offices in Sweden. The current board of

directors of SBB consists of Pär Mikael Larsson, Ulf Åke Aronsson,

Anders Jonas Friberg and Pär Mikael Opard.

The terms are set on a cash and debt free, and normalized working

capital, basis. The agreed enterprise value is an estimated SEK

115.0 million, based on an estimated EBITDA for 2017 of SEK 23.0

million multiplied by a factor of 5. The purchase price will be

settled by a combination of cash and NRC Group shares. The final

purchase price will be determined after closing based on the actual

level of cash, debt and any deviation from normalized working

capital.

The purchase price will be settled 65% in cash and 35% by the issue

of NRC Group shares at a price of NOK 58 per share (the

"Consideration Shares"). Of the cash consideration, SEK 7.5 million

will be placed in escrow. The escrow amount, together with SEK 15.5

million in Consideration Shares, will for a specific time period

serve as security for any claims NRC Group may have against the

sellers under the share purchase agreement.

The Consideration Shares are subject to a lock-up period, whereby

1/3 of the Consideration shares are subject to a lock-up undertaking

of 18 months, 1/3 for 24 months and the last 1/3 for 36 months after

the closing date.

The sellers of SBB have guaranteed a minimum EBITDA in 2017 of SEK

23.0 million. SBB's order book by year-end 2016 was SEK 110.0

million. The transaction is expected to be completed by end of May

The following table provides key financial information for SBB:

(SEK million)

FY 2016 FY 2015

(unaudited)

Revenue 271 237

EBITDA 23 20

EBIT 22 18

EBIT margin(%) 8.1% 7.6%

Cash and cash equivalents 1.4 7.8

Total assets 85 77

Equity 8 34

SBB will be organized as a separate subsidiary under Nordic Railway

Construction AB, a wholly owned subsidiary of NRC Group ASA.

There are no special agreements or arrangements that have been or

will be entered into with the directors or executive management of

SBB or the NRC Group in connection with the transaction.

***

For further information, please contact CEO Øivind Horpestad,

telephone: +47 91 00 06 26.

About NRC Group ASA:

NRC Group is a leading contractor within railway infrastructure in

Norway and Sweden. The company is a supplier of all track-related

infrastructure services, including groundworks, specialized track

work, safety, electro, telecom- and signalling systems. The company

works within rail, metro, tram segments and close related

infrastructure. NRC Group has experienced significant growth since

its inception in 2011 and has a vision of becoming the leading

Nordic entrepreneur within railway infrastructure. For more

information: www.nrcgroup.no/.

About Signal & Banbyggarna i Dalarna AB

SBB was founded in 2006 and is a Swedish entrepreneur within railway

infrastructure, signalling and groundwork. SBB provides project

management services, specializing within railway and groundwork. The

Company is headquartered in Stockholm and had a revenue of SEK 271

million in 2016. For more information: www.signal-banbyggarna.se

This information is subject to the disclosure requirements pursuant

to section 5-12 of the Norwegian Securities Trading Act.