ABL Group ASA: ABL Group to acquire AGR

20 Mar 2023 07:30 CET

20 March 2023 – ABL Group ASA (“ABL Group”) has entered into an agreement with a
subsidiary of Akastor ASA (“Akastor”) to acquire 100 percent of the shares in
multi-disciplinary engineering consultancy and software company AGR AS (“AGR”).
The acquisition will bolster ABL Group’s offering within well and reservoir
consultancy, enhance the group’s position supporting operators’ digitalisation
and decarbonisation plans, and expand its opex-driven offshore energy exposure.

HIGHLIGHTS
• Accretive acquisition with strong industrial rationale.
• Consolidating well and reservoir services with globally recognised brand.
• High-end resource solutions platform positioned for growth in offshore wind.
• Additional capability and track record in CCUS and energy transition
solutions.
• Strengthens ABL Group’s software and digitalisation offering with fully
commercialised platform.
• The transaction will be funded through existing cash and issuance of
consideration shares.
• Shareholders representing approximately 40% of ABL Group shares have
undertaken to support the transaction by voting in favour at the EGM.

“This is a good fit for ABL Group. The acquisition gives ABL Group a strong
position in well and reservoir consultancy, grows our position within
digitalisation and energy transition solutions, and expands our services with a
resourcing offering that is already well established in the oil and gas sector
and positioned for growth within offshore wind,” says Reuben Segal, CEO of ABL
Group.

The acquisition of AGR, which has high brownfield exposure, builds on the
previous purchase of Add Energy. AGR will bring scale to ABL Group’s well
services, and increases the group’s exposure to the opex-driven phases of
offshore energy. It strengthens the group’s suite of software products and
digitalisation capabilities, and adds competence and scale to support energy
transition technologies and projects.

AGR has a well management track record that spans more than 550 oil and gas
wells worldwide. ABL Group aims to utilise its global office network to, in a
cost-efficient manner, re-introduce AGR’s unique offering and capabilities to
local operators in the key international oil and gas hubs.

In addition, the acquisition enables ABL Group to offer resourcing solutions
across oil and gas and renewables projects at a time when talent scarcity is
putting these projects and deployments at risk.

Following completion of the transaction, Add Energy will become part of AGR,
which will continue as a stand-alone business line within ABL Group.

ABOUT AGR
AGR is a leading multidisciplinary engineering consultancy and software company.
The company is the result of a merger in 2019 between AGR and First Geo
(formerly Aker Geo).

Today, AGR delivers its services through five business lines: consultancy, which
delivers energy consultancy services and personnel in Norway, UK and Australia;
well management, with strong footprint in the Asia Pacific region; wellsite and
operations geology, which operates primarily in Norway; reservoir management and
asset evaluation, operating in Norway; and software products to support the
offshore energy industries globally.

The company is headquartered in Oslo, Norway, with additional offices in
Stavanger, Bergen and Tromsø in Norway; Perth, Western Australia; and Aberdeen,
UK. AGR consists of 377 personnel, of which 196 are AGR employees, and 181 are
associates/independent consultants.

In 2022, AGR delivered revenue of NOK 790 million (equivalent to USD 82.1
million at 2022 average FX rate) and an adjusted EBIT of NOK 46 million (USD 4.7
million). The company has a highly scalable business model with low fixed cost
base, which allows it to rapidly adapt to both client and market demands.

AGR is currently a wholly-owned subsidiary of Oslo-listed Akastor ASA, which has
the Aker group as its biggest shareholder.

“AGR is first and foremost a consultancy business. Akastor has been a great
owner for us, but I believe everyone sees the industrial benefits of integrating
AGR into a fully-fledged energy consultancy environment such as ABL Group. AGR
has a strong position within oil and gas but has during the past couple of years
increasingly been asked by clients to support their energy transition projects.
Tapping into ABL Group’s huge global competence and resource pool will allow us
to provide our customers with an even more comprehensive product and service
offering. We will at the same time significantly strengthen ABL Group’s well
management offering. It is a business combination that makes sense for all
parties involved,” says Svein Sollund, CEO of AGR.

“Since Akastor’s entry into AGR, through the combination with First Geo in 2019,
the company has delivered consistent growth and profitability. The combination
of AGR and ABL Group creates a company with a large global client base and a
more suitable financial platform for growth. We look forward to participating in
the next phase of AGR’s growth, now as shareholders in ABL Group,” says Karl
Erik Kjelstad, CEO of Akastor.

THE TRANSACTION
ABL Group has entered into an agreement with a subsidiary of Akastor to acquire
100 percent of the shares in AGR AS. The transaction values AGR at NOK 262.5
million (equivalent to USD 24.4 million at current FX rates) on a cash and debt
free basis.

The equity purchase price of NOK 352.9 million (USD 32.8 million), which
includes a NOK 90.4 million (USD 8.4 million) adjustment for net cash and
normalised net working capital in AGR, is based on a “locked box” balance sheet
as of 31 December 2022 and will be settled as follows:

- NOK 272.5 million to be settled through issuance of 18,166,667 ordinary ABL
Group shares (the “Consideration Shares”) at a subscription price of NOK 15 per
ABL Group share, representing 14.8% of outstanding shares post issue; and
- NOK 80.4 million (the “Cash Consideration”), to be settled in cash on
completion or, subject to certain conditions, within 20 business days of
completion.

The Cash Consideration will be adjusted for leakage and is expected to be lower
on completion due to planned carve-out transactions and excess cash
distribution. Certain defined assets are excluded from the transaction and will
be carved-out prior to completion and retained by Akastor. This includes AGR’s
ownership in Føn Energy Services AS.

As part of completion of the transaction, the current term loans from each of
Akastor, Nordea and DNB towards AGR will be fully settled by the Consideration
Shares and parts of the Cash Consideration. After completion of the transaction,
each of Akastor, DNB and Nordea will own approximately 1/3 of the Consideration
Shares. AGR has no other interest-bearing debt.

The share purchase agreement is otherwise entered into on customary terms and
includes a 12-month lock-up on the Consideration Shares, which will apply for
Akastor, Nordea and DNB.

Closing of the acquisition is expected on or around 18 April 2023. The
transaction is subject to approval of the issuance of the Consideration Shares
by an extraordinary general meeting (EGM) in ABL Group to be held on or about 12
April 2023. Shareholders representing approximately 40% of the shares in ABL
Group ASA have signed voting undertakings to vote in favour at the EGM.

The Consideration Shares will be issued on a separate ISIN until publication of
a listing prospectus, expected in late May or early June 2023.

This information is subject to disclosure requirements in Regulation EU 596/2014
(MAR) article 19 no. 3 and the Norwegian Securities Trading Act section 5-12.

ENDS

For further information, please contact:

Investors and financial media:
Stuart Jackson, Chief Financial Officer, email: stuart.jackson@abl-group.com
Haakon Brandrud, Director of Strategy and Corporate Development, telephone: +47
95 07 05 12, email: haakon.brandrud@abl-group.com

Other media enquiries:
Endre Johansen, Corporate Communications AS, telephone: +47 41 61 06 05, email:
endre.johansen@corpcom.no

About ABL Group
ABL Group (OSE: ABL Group ASA – ticker code “ABL”) offers independent energy and
marine consultancy to the global renewables, maritime and oil and gas sectors.
The group has offices in 38 countries worldwide. ABL Group operates under six
brands: ABL, OWC, Innosea, Longitude, Add Energy and ABL Yachts.

More information:
Access the news on Oslo Bors NewsWeb site

585625_ABL AGR Presentation.pdf