NRC Group — M&A Activity 2018

Aug 30, 2018

NRC Group ASA acquires Gunnar Knutsen AS

NRC Group ASA acquires Gunnar Knutsen AS

NRC Group ASA ("NRC Group" or the "Company") has on 30 August 2018 entered into

a definitive agreement for the acquisition of Gunnar Knutsen AS ("GK") for an

enterprise value of NOK 199 million on a cash and debt free basis.

Construction and infrastructure development is associated with major climate and

environmental responsibility. There is a clear trend of increased regulations

and expectations from the authorities related to sustainability and

environmental impact. The same trend is reflected among customers and other

stakeholders, which has led to a higher weighting of environmental and safety

considerations in tendering processes. The acquisition of GK further strengthens

NRC Group's Norwegian operations and broadens the company's overall capabilities

as a turnkey contractor.

"Infrastructure development projects are increasingly subject to environmental

regulations, requirements and expectations. We are committed to operate in the

most sustainable manner with the competence and capacity needed to provide a

full range of services, from planning and project management to the actual

physical work of decommissioning, remediation and waste logistics," says Øivind

Horpestad, CEO of NRC Group ASA.

"Environmental services are a growth opportunity for us. The acquisitions of GK

and previously announced Norsk Saneringsservice AS and Miljøvakta AS, strengthen

our competitive position, both on our own projects and as a third-party

supplier," adds Horpestad.

GK is one of Norway's leading companies within transportation of loose materials

for the building and construction industry in Norway. GK currently employs

approximately 55 people. The company owns a fleet of 44 modern trucks and

vehicles, operated from a newly built headquarter and operation central, located

in Bærum, Akershus. The company had a revenue of NOK 234 million in 2017 with an

EBITDA of NOK 33 million. The company has a large and loyal base of customers of

public and private construction companies within the larger capital area.

NRC Group will acquire 100% of the shares in GK. The enterprise value is NOK 199

million on a cash and debt free basis and assuming a normalized level of working

capital. The seller has guaranteed an aggregate EBIT for the second half of 2018

and FY19 of at least NOK 45 million.

Assuming no adjustments in the enterprise value, 60% of the purchase price will

be settled by payment of NOK 119.4 million in cash and the remaining 40% of the

purchase price of NOK 79.6 million will be settled by way of 1,154,962 shares in

the Company at a price of NOK 68.92 per share, of which 405,000 shares will be

existing shares held in treasury and 749,962 shares will be newly issued shares

(the "Consideration Shares"). The Consideration Shares are subject to lock-up

periods, whereby 1/2 of the Consideration shares are subject to a lock-up

undertaking of 24 months and the remaining 1/2 for 36 months after the closing

date. The seller will pledge a number of Consideration Shares that represents in

aggregate a value of NOK 30 million as security for claims the Company may have

against the seller. The transaction is expected to be completed during September

The following table provides key financial information (based on local statutory

accounts) for GK:

(NOK million) FY 2017 FY 2016 (Pro forma*)

Revenue 233.8 274.0

EBITDA 33.2 44.1

EBIT 23.8 35.6

EBIT margin (%) 10.2 13.0

Cash and cash equivalents 28.1 62.3

Total assets 133.4 144.9

* Include Bardalen, Steen & Lund AS that was acquired in 2016 and merged with GK

as of 1 January 2017.

GK will be organized as a separate subsidiary under NRC Norge AS, 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 GK or the Company 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

signaling 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 GK

GK is one of Norway's leading companies within transportation of loose materials

for the building and construction industry in Norway. The company is

headquartered in Skui and had a revenue of approximately NOK 234 million in

2017. For more information: www.gunnarknutsen.no

This information is subject to the disclosure requirements pursuant to section 5

-12 of the Norwegian Securities Trading Act.