PALFINGER intends to make a takeover bid for Norwegian TTS Group ASA

posted by AJOT | Jun 20 2016 at 08:58 AM | Maritime

This press release does not constitute an offer for the acquisition of shares in TTS Group ASA but is merely designed to inform the public about the state of a potential acquisition project by PALFINGER AG. An outline of this transaction will be disclosed today on the websites of TTS Group ASA and PALFINGER AG in accordance with the Norwegian Stock Exchange Act.

PALFINGER is offering NOK 5.60 in cash for one TTS share in the event of a positive due diligence outcome
100 percent acquisition planned
The Board of Directors of TTS recommends acceptance of the intended offer
Closing of transaction possible in three to six months
Marine business would become the PALFINGER Group’s strong second mainstay

PALFINGER AG, a company listed on the Vienna Stock Exchange and headquartered in Bergheim/Salzburg, intends to make a takeover bid, via its subsidiary Palfinger Marine GmbH, Salzburg, for all of the shares in Norwegian Bergen-headquartered TTS Group ASA. For every share traded on the Oslo Stock Exchange, a cash amount of NOK 5.60 would be offered. Subject to a positive outcome of the due diligence audit, the offer would be made in agreement with the Board of Directors of TTS, and TTS would recommend its shareholders to accept the offer. “Together with the acquisition of Harding, this acquisition would place PALFINGER MARINE among the global top three ship equipment suppliers. In the future, we want to be a one-stop shop, internationally offering all maritime customer industries competitive products and services. With a staff of approximately 3,000 employees in 22 countries and revenue of more than EUR 600 million, PALFINGER MARINE would contribute around one-third to the revenue of the PALFINGER Group from 2017 onwards, hence becoming the PALFINGER Group’s strong second mainstay,” comments Herbert Ortner, CEO of PALFINGER AG, on the significance of this potential transaction. Subject to the positive outcome of the due diligence audit and the official approvals, the intended acquisition is expected to be finalized in the fourth quarter this year, but latest in January 2017.The offer, which will be made in accordance with the Norwegian Stock Exchange Act, also has the support of approx. 67 per cent of the shareholders, among them TTS’s largest shareholder group, the Skeie family, which holds approx. 32 per cent of the shares. The offer will become effective subject to the approval of 90 per cent of the shareholders. We plan to make and disclose the formal offer document four weeks from now. The offer period will end four weeks after disclosure. PALFINGER plans to finance this acquisition via a package of financing products, primarily including term loans, hybrid capital and the issue of promissory note loans. The TTS Group, headquartered in Bergen, has global operations with a focus on the design, development and supply of equipment solutions and services for the marine and offshore oil and gas industries. “TTS has clear ambition to grow through the development of a wider range of products and product packages within the deck- and cargo handling equipment to the various vessel segments. Joining Palfinger Marine, and potentially also Harding, will give large synergies and create a solid platform for the planned growth.” says Toril Eidesvik, CEO of TTS Group. The TTS Group was established in 1966 and has been listed on the Oslo Stock Exchange since 1995. The company has grown through strategic M&A activities since 1996, and has established a leading position in the market segments for marine handling equipment. TTS has a strong foothold in China and through the establishment of three 50% owned companies in China since 2001. The TTS Group has global operations and subsidiaries in Belgium, Brazil, China, Finland, Germany, Greece, Italy, Korea, Norway, Poland, Singapore, Sweden, United Arab Emirates, USA and Vietnam. TTS is one of the top three largest suppliers worldwide in its specialized market segments. In China, whose shipyard industry accounts for 40 per cent of global shipbuilding operations, TTS has an excellent market position in hatch covers, hose handling cranes and maritime loader cranes through its three 50% owned companies. Moreover, the TTS Group is a leading supplier of marine cranes and offshore cranes featuring AHC (active heave compensation) technology. There is only little overlapping in the products and services offered by PALFINGER MARINE and the TTS Group. The acquisitions of Harding and the TTS Group would achieve substantial synergies with PALFINGER’s previous marine operations. After the acquisitions, PALFINGER MARINE would be among the top three players in the market. The strategic goals of the potential acquisition are as follows:

a leading market position for PALFINGER’s marine business by offering a diversified and attractive portfolio of products and services for all maritime customer groups and a global service network with 500 employees
to make PALFINGER MARINE, with its strong and growing service business, the Group’s second mainstay
to achieve a leading position in the equipment of deep sea vessels
to reinforce PALFINGER’s competitiveness with customers in the oil and gas industry, as well as national navies and coast guards
to strengthen the international service network and thus lower dependence on investment cycles
to substantially expanding value creation in China
to make PALFINGER a more attractive employer in the marine business due to size, competitiveness and global presence

PALFINGER started its marine operations in 2010 with the acquisition of Ned Deck Systems and has continuously expanded them in subsequent years through additional acquisitions such as DREGGEN or Norwegian Deck Machinery. In 2015, PALFINGER MARINE recorded revenue of approx. EUR 170 million.