TOMRA Systems — M&A Activity 2016

Oct 12, 2016

TOMRA: FURTHER FOOD SORTING EXPANSION

TOMRA: FURTHER FOOD SORTING EXPANSION

TOMRA Acquires New Zealand Sorting Machine Manufacturer Compac for NZD 70m

TOMRA Systems ASA (TOMRA), has on 11.10.2016 through its wholly owned subsidiary

TOMRA Sorting AS signed an agreement with the owners of Compac Holding Ltd

(Compac) for 100 per cent of the shares in the company. Closing of the

transaction is expected to take place during 1Q 2017 subject to approval by the

New Zealand Overseas Investment Office

Compac - A leading provider of Lane Sorting within the Fresh Fruit and Vegetable

Segment

Compac is a New Zealand-based provider of post-harvest solutions and services to

the global fresh produce industry. The company designs, manufactures, sells and

services packhouse automation systems that sort fresh produce based on weight,

size, shape, colour, surface blemishes and internal quality.

"The food market is large and continuously growing with requirements around food

safety and quality becoming increasingly more stringent. Food producers are also

consolidating, becoming larger, more sophisticated and more global. As a leading

technology supplier into this industry we see clear advantages in mirroring this

trend. With the acquisition of Compac, we reinforce TOMRA's leading position

within the food segment and we will be the first player to present an offering

to our customers for sorting fresh and processed foods with both lane and bulk

sorting", says Stefan Ranstrand, TOMRA's President and CEO.

Established in 1984, today Compac employs approximately 700 people across

locations in New Zealand, Australia, US, China, South-America, Spain and Italy.

Compac has a leading position within the sorting of apples, kiwifruit, cherries,

avocados and citrus. About 6,000 Compac sorting lanes have been sold worldwide

in over 40 markets. With year-end in June 2016, the company generated an EBITDA

of NZD 3m on total revenue of NZD 152m.

"Market forces have driven double digit growth at Compac over recent years, and

we have rapidly become a global business from humble New Zealand roots. Joining

forces with TOMRA will enable us to continue to meet the increasing demands for

our products and services in a more scalable and operationally efficient

manner", says Compac CEO Mike Riley.

For more information about Compac, reference is made to the press conference

presentation dated 12thof October and the company website

http://www.compacsort.com/

A Further Strengthening of TOMRA's Offering Within Food Sorting Segment

TOMRA Sorting Solutions is a global market leader in sensor based sorting

solutions. The technology is applied in the recycling, mining and food

industries. The acquisition of Compac represents another important step towards

strengthening its market position and product offering within sensor based

sorting. In addition to representing an interesting growth case on its own,

Compac is a strong strategic fit with TOMRA Sorting Solutions and represents an

opportunity for a broader geographical positioning as well as application span.

"The geographical coverage of the combined companies is extensive and customers

will find a one stop shop for sorting, peeling and analytical solutions for a

wide variety of food products. The integration of lane sorting and bulk sorting

within the fresh and processed food industries is a natural development for many

applications and the leadership positions of both TOMRA and Compac will now

provide a unique capability in this regard", commented Head of TOMRA Sorting

Food Ashley Hunter.

Transaction details

TOMRA will pay a consideration of NZD 70m, free of cash and interest bearing

debt. TOMRA will pay the purchase price in cash, and the transaction will be

financed through existing drawing rights. In addition to the initial purchase

price, the sellers are entitled to an earn-out linked to the combined EBIT for

the period July 2016 to June 2019. The earn-out is capped at NZD 230m, which is

reached at a combined EBIT for the three years' period of NZD 84m. There will be

progress payments after Fiscal year 2017 (ending June 2017), Fiscal year 2018

(ending June 2018) and Fiscal year 2019 (ending 2019), if certain interim

targets are met. If the combined EBIT during the period is below NZD 20m, no

additional earn-out will be paid (somewhat dependent upon the distribution of

EBIT between the three years).

TOMRA will also provide an interim funding to Compac of NZD 10m. This is to be

deducted from the purchase price at closing.

A press conference elaborating on the acquisition will be held at 08:00 CET via

webcast. We will open up for Q&A after the presentation, questions can be asked

through the Q&A tool embedded in the webcast.

Webcast link: http://presenter.qbrick.com/?pguid=3ee750b5-0053-4910-9bbd

-1890dc37694c .Webcast is also available live and recorded version at

www.tomra.com

For other questions please contact:

CFO:  Espen Gundersen  +47 66 79 92 41 / +47 97 68 73 01

CEO: Stefan Ranstrand  +47 66 79 92 00 / +47 97 47 72 70

Investor Relations:  Elisabet V. Sandnes  +47 66 79 92 42 / +47 97 55 79 15

TOMRA was founded on an innovation in 1972 that began with design, manufacturing

and sale of reverse vending machines (RVMs) for automated collection of used

beverage containers. Today, TOMRA has ~86,000 installations in over 80 markets

worldwide and had total revenues of ~6.1 billion NOK in 2015. The Group employs

~2,600 globally, and is publicly listed on the Oslo Stock Exchange. (OSE: TOM).

The TOMRA Group continues to innovate and provide cutting-edge solutions for

optimal resource productivity within two main business areas: Collection

Solutions (reverse vending and material recovery) and Sorting Solutions

(recycling, mining and food sorting). For further information about TOMRA,

please see www.tomra.com