SFC Energy AG — M&A Activity 2013

Jul 5, 2013

News Details

Ad-hoc | 5 July 2013 00:01

SFC Energy AG: next strategic step towards systems supplier, forward integration and expansion into North-American oil & gas market by acquiring Simark Controls Ltd.

SFC Energy AG / Key word(s): Acquisition/Change in Forecast

05.07.2013 00:01

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Brunnthal/Munich, July 4, 2013 - SFC Energy AG (SFC), listed in the Prime
Standard of Frankfurt Stock Exchange, ISIN DE0007568578, WKN 756857 today
signed a contract to acquire Simark Controls Ltd. (Simark), a Canadian
value added distributing company with product integration and manufacturing
expertise for power products, instrumentation and automation equipment
supplying the oil and gas industry.

This transaction leads to a forward integration and is a further important
step in implementing SFC's strategy as a systems provider. At the same time
this transaction offers considerable growth potential for SFC through
Simark's market access to the important oil & gas market in North America.

The net purchase price payable for all Simark shares is up to approx. EUR
18.52 million (CAD 25.00 million), consisting of a cash component of
approx. EUR 12.04 million (CAD 16.25 million payable in cash at closing of
the transaction, of which CAD 4.125 will be financed by a Canadian
commercial bank and the remainder from the SFC Group's existing cash
resources), an SFC share component of approx. EUR 2.78 million (CAD 3.75
million) and another cash component of up to approx. EUR 3.70 million (CAD
5.0 million), which will be paid from 2014 to 2016 in three yearly
instalments each up to approx. EUR 1.23 million (CAD 1.67 million) -
depending on incidence or absence of certain events.

In the context of the SFC share component, Simark's shareholders will
receive approx. 518,000 new SFC shares arising from the Company's existing
authorized capital. The shares will be valuated EUR 5.39, which is the
volume weighted average share price of the past 60 days plus a 5% premium.
The shares are subject to a de facto lock-up until 2015. The transaction is
expected to be completed (Closing) within the third quarter of 2013.

For the current fiscal year the new SFC Group expects total sales of
between EUR 38 and 43 million, assuming the consolidation of Simark begins
with effect from September 1, 2013. In the combined entity, strong growth
is expected in the Industry market segment. This is partly due to organic
growth and partly to the inclusion of Simark's sales contribution.
Elsewhere, the Management Board expects total sales in the Consumer segment
to be on the same level as the previous year because of the continuation of
difficult conditions in this market. Furthermore, unlike in 2012, there are
no large-scale projects scheduled for the Defense & Security market and
potential project delays at German and U.S. armed forces will cause this
segment's sales to be down on 2012.

From today's perspective SFC Group's underlying EBITDA is expected to
improve as a consequence of the growth in sales. The EBIT will be affected
by several one-off items amounting to an estimated approx. EUR 2.0 million
although these are mainly a consequence of the Simark acquisition. SFC will
update its expectations for 2013 EBITDA and EBIT after the final closing
and the purchase price allocation.

For 2014, Group sales between EUR 55 and 60 million and an associated
significant improvement in the earnings figures are expected.

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Language: English
Company: SFC Energy AG
Eugen-Saenger-Ring 7
85649 Brunnthal
Germany
Phone: +49 (89) 673 592 - 100
Fax: +49 (89) 673 592 - 169
E-mail: info@sfc.com
Internet: www.sfc.com
ISIN: DE0007568578
WKN: 756857
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Düsseldorf, München, Stuttgart

End of Announcement DGAP News-Service

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