Cermaq has completed the sale of its fish feed operation, Ewos, to private equity firms Altor Fund III and Bain Capital.
The transaction was closed for NOK 6.5 billion (USD 1.1 billion, EUR 802 million) with Cermaq receiving NOK 6.2 billion (USD 1 billion, EUR 765 million) on Thursday. Final consideration is dependent on certain events to be settled in accordance with the share purchase agreement (SPA) at a later stage.
Cermaq predicted a gain of NOK 2 billion (USD 337 million, EUR 247 million) to NOK 2.5 billion (USD 421 million, EUR 308 million) and an extraordinary dividend of NOK 4.5 billion (USD 757 million, EUR 555 million) to NOK 5 billion (USD 841 million, EUR 617 million) on the back on the transaction.
The contingent consideration of NOK 180 million (USD 30 million, EUR 22.2 million) will, as described in the stock exchange notification, be paid upon EWOS receiving payment from two customers in Chile. Based on current processes and the agreement between EWOS Chile and these customers, Cermaq continues to expect the contingent consideration to be made in full, but can at this stage not provide more information.
The buyers have waived the potential request for a time limited back-up facility of NOK 260 million (USD 44 million, EUR 32 million) in Cermaq or alternatively a deferred consideration of NOK 130 million (USD 22 million, EUR 16 million) relating to certain supply financing arrangements. The proceeds received are therefore not reduced for any supplier financing support.
The consideration received at closing is based on estimates at the end of October with regards to networking capital and certain adjustment items agreed in the SPA.
The final consideration will be based on a completion statement and may be adjusted for changes in such items as commented above and the actual net working capital per closing compared to the normalized level as defined in the agreement between the parties. Finalization of the processes to conclude the completion statement follows specific and standard procedures stated in the SPA and are expected to be completed before year end.
Out of the proceeds received, NOK 923 million (USD 155 million, EUR 114 million) will be directed to the early redemption of Cermaq outstanding bond as announced in the stock exchange notification 22 July. Bond Investors can expect their notes to be redeemed on 5 November 2013.
“The process for completing the sale of Ewos has been very good and the outcome is in line with our expectations,” said CEO Jon Hindar. “I trust that this transaction will provide good development prospects for Ewos, its employees and the new owners, and Cermaq look forward to continue the strong and important collaboration with Ewos in the coming years.”
