Diagenic ASA – Signed final agreement to acquire NEL Hydrogen AS – extended announcement

OSLO, Norway--()--Regulatory News:

Diagenic ASA – Signed final agreement to acquire NEL Hydrogen AS – extended announcement

Reference is made to the stock exchange announcement made by Diagenic ASA ("Diagenic" or the "Company") on 8 September 2014 regarding the signed letter of intent to acquire New NEL Hydrogen Holding AS ("NEL Hydrogen) and the notice of an extraordinary general meeting on 18 September 2014.

Following satisfactory due diligence, Diagenic is pleased to announce that the Company has today signed a final share purchase agreement with the shareholders of NEL Hydrogen to acquire NEL Hydrogen (the "Transaction"). The agreement is subject to certain conditions, including approval of the Transaction and the issue of consideration shares by the extraordinary general meeting of the Company and the approval of a prospectus in connection with the listing of the consideration shares by the Financial Supervisory Authority of Norway (No. Finanstilsynet).

The proposed Transaction represents a change in strategic direction for the Company, as a new business area will be included. The existing pharmaceutical activities of the Company will remain as a separate business area within the Company.

Acquisition

Diagenic is acquiring 100% of the shares in NEL Hydrogen for a total consideration of NOK 120 million. The Transaction will be financed through NOK 40 million in cash and NOK 80 million in new shares of the Company. The consideration shares to be issued will be valued at NOK 0.65 per share. The shares in the Company shall be subscribed for no later than 31 October 2014. The shares of NEL Hydrogen shall be transferred to the Company no later than 7 November 2014

The consideration shares shall be subject to an extensive lock up. 27,692,308 shares held by key employees have a total lock up of four years and 27,692,307 held by these key employees have a total lock up of two years. 6,153,846 shares held by management shareholders have a lock up until 1 September 2016 and 61,538,462 shares held by non-management shareholders have a lock up of one year

NEL Hydrogen

NEL Hydrogen is a global leader in the supply of hydrogen-based electrolyser plants and hydrogen fuelling stations. The company dates back to the 1920s when Norsk Hydro established its first hydrogen generation installation for use in ammonia fertilizer production. The company began commercial sales of electrolysers in the 1970s, and has sold more than 500 electrolysers in a wide array of industries across Europe, South America, Africa and Asia. The company has locations in Notodden, Norway and has a global reach through its own sales representatives and extensive agent network. The company has 22 employees. For further information regarding NEL Hydrogen, please refer to the company's webpage www.NEL-hydrogen.com.

NEL Hydrogen's board of directors consists of Martin Nes (chairman), Øystein Stray Spetalen, Lars Markus Solheim and Ole Arnt Lindgren. The CEO of NEL Hydrogen is Lars Markus Solheim and CFO Erik Evju. Martin Nes and and Øystein Stray Spetalen also serves on the board of the Company.

The following are key figures for the acquired company:

Income statement (NOKm)   2013   YTD Jul. 14   2014e
Sales
New sales n.a. 11,9 22,6
Aftermarket sales n.a. 33,3 52,2
Total sales revenue 34.1 45,2 74,7
 
EBITDA 12,7 11,6 18,7
EBITDA margin 37,2 % 25,7 % 25,0 %
 
EBIT 12,5 11,4 18,2
EBIT margin 36,7 % 25,1 % 24,4 %
 
Balance sheet (NOKm) 2013 YTD Jul. 14 2014e
Equity 6,2 21,7 n.a.
Assets 28,6 39,0 n.a.
NIBD 1,1 -3,6 n.a.
 

Equal treatment

As stated in the notice to the extraordinary general meeting, Diagenic's shareholders Strata Marine & Offshore AS and Dallas Asset Management AS are indirect sellers in the Transaction. Given that the sellers will receive consideration shares, the Company has made careful considerations with regard to the principle of equal treatment of its shareholders. If the shareholders' meeting approves the transaction, the consideration share issue will mean that the shareholders preemptive rights to subscribe for new shares will be deviated from. The Company has concluded that the Transaction is in the best interest of the Company and the Company's shareholders. The purchase agreement has been entered into on an arm's length basis, and the board has solicited a separate independent review of the relative values under the Norwegian Public Limited Companies Act section 3-8, the result of this review is appended to the notice of the shareholders meeting. Though not a formal requirement, the Company has decided to have the Transaction itself approved by the shareholders. The final resolution concerning whether or not the Transaction shall be concluded or not will therefore be made by the shareholders. The board's recommendation is that the Transaction is approved as proposed.

For further information, please contact:

Lars Christian Stugaard

Acting CEO

+47 23 01 49 06 / +47 47 63 05 22

lars.christian.stugaard@diagenic.com

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act and section 3.4 of the Oslo Stock Exchange's Continuing Obligations.

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Contacts

DiaGenic ASA
Lars Christian Stugaard, +47 23 01 49 06 / +47 47 63 05 22
Acting CEO
lars.christian.stugaard@diagenic.com

Contacts

DiaGenic ASA
Lars Christian Stugaard, +47 23 01 49 06 / +47 47 63 05 22
Acting CEO
lars.christian.stugaard@diagenic.com