Salmon Evolution ASA — M&A Activity 2021

Aug 16, 2021

Salmon Evolution ASA: Acquisition of smolt producer Kraft Laks

Salmon Evolution ASA: Acquisition of smolt producer Kraft Laks

Salmon Evolution ASA ("Salmon Evolution" or the "Company", OSE: SALME) is

pleased to announce that it today has acquired 100% of the shares in Kraft Laks

AS ("Kraft Laks"), a family owned smolt producer located in Dalsfjorden in Volda

municipality.

Kraft Laks has a documented track record as a high quality smolt producer and

the facility, under the selling family's ownership, has been producing smolt

since 1995. Over the last years, the majority of the smolt produced has been

sold on a long-term contract to one of the major salmon farmers. The company has

an annual production of around 1.8 million smolt, but has a license to produce

up to 5 million smolt p.a., subject to certain conditions. The parties have

identified significant expansion opportunities for the facility which, if

realized, is expected to also cover Salmon Evolution's smolt needs for at least

phase 2 at Indre Harøy based on current plan.

One of the major advantages with Kraft Laks is its excellent freshwater supply.

From 3 inlet stations (2 rivers), Kraft Laks has good access to clean freshwater

from the surrounding mountains. Also, a royal resolution secures minimum

freshwater supply from the local power station at all times. The solid

freshwater access has enabled Kraft Laks to utilize a similar production

technology as Salmon Evolution's hybrid flow-through system (HFS) with reuse of

water, CO2 stripping and oxygenation, making Kraft Laks a perfect fit for Salmon

Evolution.

The purchase price for 100% of the shares in Kraft Laks is agreed to NOK 76.5

million, which is based on an enterprise value of NOK 70 million on a cash and

debt free basis. Over the last 3 financial years, the company has had an annual

average EBITDA of approx. NOK 10 million and annual average revenues of approx.

NOK 28.5 million. The purchase price is payable as follows:

· NOK 16.6 million in the form of new Salmon Evolution ASA shares issued at a

subscription price of NOK 7.5775 per share which equals the volume weighted

average price the last 20 days prior to the transaction. As a result, Salmon

Evolution will issue 2,190,694 new shares (the "Issue Shares") to the previous

Kraft Laks owners as sellers. The Issue Shares will be subject to a 12 months'

lock-up and will be issued pursuant to the board authorization granted by Salmon

Evolution's general meeting on 19 May 2021

· NOK 35 million payable by Salmon Evolution in cash at closing and the

remaining balance structured as a deferred cash payment

The cash part will be paid from existing available funds. The Issue Shares are

expected to be issued shortly. Upon completion of the issue of the Issue Shares,

Salomon Evolution will have a share capital of NOK 15,262,755.75 consisting of

305,255,115 shares, each with a par value of NOK 0.05.

Mr Ingjarl Skarvøy, COO of Salmon Evolution comments:

"The acquisition of Kraft Laks is the result of a thorough process where Salmon

Evolution has evaluated a number of alternatives with respect to sourcing of

smolt. The Company is confident that acquiring an existing operation with

documented track record has a significant risk mitigating effect. It also gives

us flexibility with regards to our production plan at Indre Harøy and finally it

does so in a cost and capex effective manner".

Mr Knut Endre Heltne, majority owner and general manager of Kraft Laks further

comments:

"In Salmon Evolution we have found a partner that share our philosophy when it

comes to salmon farming. For me it is a great privilege to join the Salmon

Evolution team as continued general manager of Kraft Laks and for us as a family

we also look forward to take part in Salmon Evolution's exciting journey as

shareholders".

Currently, Kraft Laks is fully stocked with smolt to cover its existing customer

contract. The existing inventory is also aligned to cover Salmon Evolution's

expected smolt needs from and including the first smolt release at Indre Harøy

planned in March 2022 based on the current plan.

For further information, contact:

Håkon A. Berg

CEO, Salmon Evolution

+47 411 92 257

Trond Håkon Schaug-Pettersen

CFO, Salmon Evolution

+47 911 91 327

Ingjarl Skarvøy

COO, Salmon Evolution

+47 901 16 803

About Salmon Evolution

Salmon Evolution is a Norwegian land-based salmon farming company focused on

extending the ocean's potential by transferring the best preconditions offered

by the sea to farm fish on land through its hybrid flow-through system

technology (HFS). This secures a truly sustainable production process with

controlled and optimal growth conditions and limiting operational and biological

risk.

The Company's first production facility is under construction at Indre Harøy,

strategically located on the Norwegian west coast with unlimited access to fresh

seawater, renewable energy, established infrastructure for salmon farming, and

an educated and experienced work force. The entire project is designed for an

annual capacity of approx. 31,500 tonnes HOG.

The Company has also entered into a joint venture with Dongwon Industries where

the parties will develop, construct and operate a land-based salmon farming

facility in South Korea with an annual production capacity of 16,800 tonnes HOG,

using Salmon Evolution's HFS technology.

Salmon Evolution ASA is listed on Oslo Børs under the ticker SALME.

To learn more, please visit www.salmonevolution.no

This information includes inside information pursuant to the Market Abuse

Regulation and the contact persons listed above are responsible for this

announcement. This information is subject to the disclosure requirements

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