Oslo, 7 May 2015 - Reference is made to the announcement from Blom ASA ("Blom") on 23 April 2015 where it was announced that Blom had entered into an agreement to combine its business with Team Bane AS ("Team Bane"). To further build a Northern European railway infrastructure and geospatial company, Blom has entered into an agreement to acquire Svensk Järnvägsteknik AB and its subsidiaries ("SJT") in addition to the already announced combination with Team Bane (the "Transactions"). Team Bane and SJT are leading specialist players within railway infrastructure in Norway and Sweden, respectively.
In connection with the Transactions, the publicly listed parent company Blom ASA will change name to NRC Group ASA ("NRC Group"). NRC Group will be well positioned in the infrastructure segment in Northern Europe, with a strong position in the market for construction of railway infrastructure in Norway and Sweden. These markets are set for strong growth over the coming years. NRC Group delivered combined revenues of NOK 954 million and EBITDA of NOK 97 million in 2014.
Background and rationale
The markets for geospatial information and infrastructure construction, and in particular the railway segment, are expected to grow significantly over the coming years. In June 2013, the Norwegian Parliament approved a NOK 173 billion national transportation plan for railway for the 2014 - 2023 periods. In Sweden, a SEK 522 billion transportation plan for the period 2014 - 2025 was adopted by the Swedish Government in April 2014.
According to Blom's financial budget for 2015, close to 28 per cent of Blom's revenues is expected to originate from the Infrastructure segment, up from 20 per cent in 2014, making it Blom's fastest growing segment. Blom has a strong track-record from railway projects in the UK and Germany, but has not equally succeeded in the Scandinavian railway markets. Team Bane and SJT have firm and long-term established client relationships, all required certifications, track-record and construction capabilities in Norway and Sweden within the railway sector, and thus bring a platform for successfully distributing Blom's offerings into the Norwegian and Swedish markets.
The combination of Team Bane and SJT brings significant potential for increased utilization of employees, machinery and equipment across the Norwegian and Swedish infrastructure market. In addition, the size of the combined company will increase the visibility and attractiveness as an employer and give access to capital. Furthermore, Team Bane and SJT have identified and are in dialogue with further potential consolidation targets.
The combined company
The strategy of NRC Group will be to capitalize on the strong market growth within infrastructure construction in the Nordics and geospatial information in Northern Europe. NRC Group will be uniquely positioned due to its capabilities covering the entire value chain required to take on all types of railway infrastructure projects. The NRC Group will differentiate through having an asset light, competence based business model, partnering with the leading international players and by having the best specialists in the industry in-house with additional capacity through in-hiring of resources as needed.
NRC Group delivered combined revenues in 2014 of NOK 954 million and EBITDA of NOK 97 million. In Q1 2015 the group had revenues of NOK 133 million and EBITDA of -27 million. The first quarter is a seasonally weak quarter for all three companies. The order backlog for NRC Group stood at NOK 1,024 million at the end of Q1 2015.
"I am excited to present the new NRC Group today. Blom is a company with a sound balance sheet and profitable growth, in particular from our infrastructure business. Team Bane and SJT are exposed to the strongly growing Norwegian and Swedish railway construction markets, and enable access for Blom to these key markets. The new NRC Group will be a leading group which is set to capture the expected strong growth within infrastructure, in particular within the railroad segment. We will have the track-record, competencies, scale and position required to succeed", said Trygve Bruland, Chairman of the Board of Directors of Blom.
NRC Group will announce a new dividend policy and an employee share investment program in due course following the Transactions.
As announced on 23 April 2015, the combination between Blom and Team Bane will be completed as a share transaction with an exchange ratio of 50-50. The settlement for the acquisition of SJT will be made in a combination of NRC Group shares, cash and a vendor note of SEK 16 million. Post the Transactions, the current shareholders of Blom, Team Bane and SJT will own 43.5, 43.5 and 13.0 per cent of NRC Group, respectively. In addition, the shareholders of SJT will receive SEK 180 million in cash payment which will be financed with a committed bank facility provided by DNB, subject to customary conditions related to agreement on final loan documentation and conditions precedent.
Following the Transactions, NRC Group will have 22.2 million shares outstanding and combined net interest bearing debt of NOK 182 million as at Q1 2015, adjusted for the new debt related to the Transactions.
Due diligence has been completed and final transaction agreements with the shareholders of Team Bane and SJT have been signed. Completion of the Transactions is subject to approval from the general meeting in Blom, scheduled to be held on 28 May 2015. Shareholders holding approximately 74 per cent of the issued shares in Blom have irrevocably committed to vote in favor of the Transactions. The new shares to be issued on completion of the Transactions to the shareholders of Team Bane and SJT will be listed on Oslo Børs after the publication of a prospectus or similar listing document in accordance with the Norwegian Securities Trading Act and applicable rules of Oslo Børs, expected to take place shortly after the general meeting.
Completion of the Transactions is expected to take place on or about 28 May 2015.
DNB Markets is acting as financial adviser for NRC Group. Advokatfirmaet Schjødt AS is acting as legal advisors to the NRC Group. Aabø-Evensen & Co Advokatfirma AS is acting as legal advisors to Team Bane in connection with NRC Group's acquisition of SJT.
Analyst and investor presentation
A presentation of the Transactions and the NRC Group for analysts and investors will be arranged on Hotel Continental, Stortingsgata 24, Oslo at 12:00 CET today, 7 May 2015. Please register your attendance by sending an e-mail with your name and company to firstname.lastname@example.org.
For further information, please contact: Trygve Bruland, Chairman of the Board of Directors of Blom, +47 41146000.
Blom is one of Europe's largest aerial survey companies. It has approx. 400 employees out of which 250 are in the company's production units in Romania and Indonesia. Blom delivered revenues in 2014 of NOK 234 million and EBITDA of NOK 15 million.
About Team Bane
Team Bane is a fully integrated rail infrastructure contractor in Norway, and was established in 2011. Team Bane has established itself as a leading player in the Norwegian market with a number 2 position based on revenues. Team Bane has 128 employees and delivered revenues in 2014 of NOK 323 million and EBITDA of NOK 20 million.
SJT was established in 1999 and is fully integrated rail infrastructure contractor in Sweden. SJT has a number 3 market position in Sweden. SJT has 71 employees and delivered revenues in 2014 of NOK 397 million and EBITDA of NOK 61 million.
+47 91 74 15 92henning.olsen[at]nrcgroup.com