NRC Group — M&A Activity 2018

Aug 14, 2018

NRC Group ASA acquires NSS Holding AS

NRC Group ASA acquires NSS Holding AS

NRC Group ASA ("NRC Group" or the "Company") has on 14 August 2018 entered into

a definitive agreement for the acquisition of NSS Holding AS, the sole

shareholder of Norsk Saneringsservice AS ("NSS") and the owner of 70% of the

issued and outstanding shares in Miljøvakta AS, ("Miljøvakta") for an enterprise

value of NOK 103 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 NSS and Miljøvakta

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.

"We see this as a growth opportunity for NRC Group as the acquisition of NSS and

Miljøvakta strengthens our competitive position, both on our own projects and as

a third-party supplier," adds Horpestad.

NSS is one of Norway's largest companies within demolition and environmental

remediation, and Miljøvakta offers environmental consultancy and remediation

services. NSS and Miljøvakta have currently approximately 90 employees.

NRC Group will acquire 100% of the shares in NSS Holding AS. The enterprise

value is NOK 103 million on a cash and debt free basis and assuming a normalized

working capital. The enterprise value is based on a consolidated estimated

average EBIT for 2018 and 2019 of NOK 20 million. The seller has guaranteed an

average EBIT of 2018 and 2019 of NOK 20 million.

Assuming no adjustments in the enterprise value, 50% of the purchase price will

be settled by payment of NOK 51.5 million in cash (of which NOK 10 million will

be placed in escrow) and the remaining 50% of the purchase price of NOK 51.5

million will be settled by issuance of 779.122 shares in the Company at a price

of NOK 66.10 per share (the "Consideration Shares"). 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 24 months and the remaining 2/3 for 36

months after the closing date. The seller will pledge a number of Consideration

Shares that represent in aggregate a value of NOK 10 million as security for

claims the Company may have against the seller. The transaction is expected to

be completed during September 2018.

The indirect seller of NSS Holding AS (owning NSS Holding AS through holding

companies) is the founder of NSS and a key employee. The indirect seller is also

member of the current boards of directors of both NSS and Miljøvakta.

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

accounts) for NSS Holding AS on a proforma and consolidated basis:

(NOK million) FY 2017 FY 2016

Revenue 242.6 168.5

EBITDA 14.9 6.2

EBIT 12.1 4.3

EBIT margin (%) 5.0 2.5

Cash and cash equivalents 8.7 22.7

Total assets 74.8 61.3

NSS Holding AS 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 NSS Holding AS, NSS

or Miljøvakta 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.com.

About NSS Holding AS, NSS and Miljøvakta

NSS is one of Norway's largest companies within demolition and environmental

remediation and Miljøvakta offers environmental consultancy and remediation

services. Both companies are headquartered in Oslo and had a consolidated

revenue of approximately 242.6 million NOK in 2017. For more information:

www.nss.no.

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

-12 of the Norwegian Securities Trading Act.