Cermaq sells EWOS for NOK 6.5 billion – Fishupdate.com

Cermaq sells EWOS for NOK 6.5 billion Published:  23 July, 2013

On 18 July 2013 Cermaq entered into a definitive agreement for the sale of its EWOS business to Altor Fund III GP Limited and Bain Capital Europe, LLP (collectively referred to as “Altor and Bain Capital”).

The purchaser is a Norwegian company established by funds advised by Altor and Bain Capital for this purpose.

The transaction is structured as a sale and purchase of shares in certain Cermaq subsidiaries and certain assets and liabilities thereof.

The agreed consideration implies an enterprise value of EWOS of NOK 6.5 billion, and will be payable in cash upon completion. The transaction is expected to close by the end of October 2013.

The aggregate agreed consideration implies an enterprise value of EWOS of NOK 6.5 billion, and will enable Cermaq to free up significant funds. Such funds will be used to reduce debt to ensure a continued solid capital structure and compliance with all financing commitments for the remaining operations, and to realize an extraordinary dividend to the shareholders.

Subject to completion of the transaction, the company expects an extraordinary distribution to Cermaq’s shareholders of around NOK 4.5 – 5.0 billion, or between NOK 48 and NOK 54 per share.

The consideration will be payable in cash upon completion, however so that up to NOK 180 million will be contingent upon EWOS receiving payment of certain overdue outstanding receivables (on or after closing).

Cermaq has further agreed to seek consents from its lenders to provide an unsecured backup facility of up to NOK 260 million for the period from completion of the transaction to 31 December 2014 for the purpose of replacing any existing supplier financing which may fall away at closing, if any. Alternatively a delayed payment of NOK 130 million of the total consideration will be paid within 31 December 2014.

As part of the transaction, Mainstream will enter into a long term feed agreement with EWOS on market terms. The six-year contract includes exclusive deliveries from EWOS the first two years of the contract.

After completion of the transaction, Cermaq will be a pure salmonid aquaculture company with operations in three of the major salmon farming regions globally. The Cermaq board will now continue its efforts to further develop the company’s significant farming activities in Norway, Canada and Chile.

Cermaq supports a further consolidation of the farming industry in selected geographical areas and will consider various solutions to further develop the company’s strong position and further maximize residual shareholder value.

EWOS is a leading supplier of feed and nutrition for the international aquaculture industry. EWOS has produced fish feed since 1935 and today, the company operates in all four of the world’s major salmon farming regions: Norway, Chile, Canada and Scotland.

In addition EWOS has entered the Pangasius feed market in Vietnam. EWOS continuously invests in research and development in order to maintain its strong reputation as the leader in its field. EWOS had 1024 employees at year end 2012.