Acquisition of PSW Group and planned private placement
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Scana ASA (OSE: SCANA) (“Scana” or the “Company”) has today entered into a share purchase agreement with a group of investors led by funds advised by Herkules Capital AS (“Herkules”) and minority shareholders to acquire 100% of the shares in PSW Holding AS, the parent company of PSW Group (the “Transaction”).
PSW Group is a leading player in electrification and shore power, as well as a major supplier of products and services to the offshore and maritime industries. The combined company will hold a unique position as a leading supplier to the maritime sector, with a particular focus on supporting the industry’s transition to sustainable operations.
The transaction will support Scana’s strategy of leading the transition toward more sustainable operations in the global ocean industries. Scana will become a full-service partner for the green shift across the shipping, offshore, energy, and aquaculture sectors.
The purchase price for all shares in the Transaction is NOK 455 million, which the Company will finance through a new bank facility of NOK 100 million, a seller credit of up to NOK 47 million, and the remainder by issuing new shares in the Company (the “Private Placement”). Herkules will reinvest a significant portion of the purchase price into the Company, becoming a major shareholder in Scana and will be represented by one member on Scana’s board of directors. The Transaction is expected to be completed during January 2022, subject to the fulfillment of all conditions.
An updated company presentation describing the Transaction, the merger, and the Private Placement is available on Scana’s website, www.scana.no. The Company will host a global investor call today, 15 December 2021, from 17:15 to 18:00 CET. Interested investors may participate by following this link: https://bit.ly/3oVjfxe
The private placement
To finance the Transaction and the required working capital, Scana has engaged Fearnley Securities AS and SpareBank 1 Markets AS as managers (the “Managers”) to advise on and carry out the contemplated Private Placement, with expected gross proceeds of a minimum of NOK 400 million and a maximum of NOK 450 million through the issuance of new shares in the Company (the “New Shares”).
The subscription price for the New Shares will be NOK 1.40 (the “Subscription Price”), and the final number of shares to be issued will be determined by the Company’s board of directors (the “Board”) following an accelerated bookbuilding process.
The bookbuilding period for the Private Placement will commence today, 15 December 2021 at 16:30 CET, and close on 16 December 2021 at 08:00 CET. The Company may, at its sole discretion and without notice or reason, choose to close or extend the bookbuilding period at any time.
The net proceeds from the Private Placement will be used in part to finance the Transaction and related costs, to repay an outstanding shareholder loan that is not converted in the Transaction, and for general corporate purposes. To the extent that the net proceeds exceed NOK 400 million, the seller credit in the Transaction will be reduced accordingly.
Of the minimum gross proceeds of NOK 400 million in the Private Placement, the Managers have received pre-commitments and guarantees totaling NOK 407 million from selected investors.
- Herkules and the minority shareholders in PSW have pre-subscribed for NOK 91 million by reinvesting part of the proceeds from the Transaction and will receive full allocation.
- In addition, Herkules has guaranteed subscriptions for a further NOK 83 million (in exchange for a guarantee fee of 3%). Settlement for any allocation under this guarantee will be made through the conversion of part of the proceeds from the Transaction.
- Perestroika AS has guaranteed subscriptions in the amount of NOK 20 million, in exchange for a guarantee fee of 3%.
- Existing shareholders have pre-subscribed for NOK 30 million, including the conversion of NOK 12 million of an outstanding shareholder loan, in exchange for a conversion fee of 3%.
- Spiralen Holding AS has pre-subscribed for NOK 12 million, to be settled through partial conversion of an outstanding shareholder loan following the transfer of the loan from PSW to Scana.
- Management and employees of Scana and PSW have pre-subscribed for a total amount of NOK 19 million (in addition to any conversion of proceeds from the Transaction) and will receive full allocation.
- Selected new investors have pre-subscribed for NOK 152 million and will receive full allocation.
The Private Placement will be directed towards Norwegian and international investors, in each case subject to applicable exemptions from the requirement to prepare a prospectus and any other notification or registration requirements in the relevant jurisdiction, and subject to other applicable selling restrictions.
The minimum subscription and allocation in the Private Placement is set at the number of New Shares corresponding to a total subscription amount in NOK equivalent to at least EUR 100,000.
Conditional allocation of the New Shares in the Private Placement will be resolved by the Company’s Board of Directors following completion of the bookbuilding process, in consultation with the Managers.
As stated above, certain investors who have pre-subscribed in the Private Placement will receive full allocation. The Board will then focus on allocation criteria that include, but are not limited to: current ownership in the Company, timing of subscription, relative subscription amount, sector knowledge, perceived investor quality, and investment horizon.
The Board may, at its sole discretion, reject or reduce subscriptions, and cannot guarantee that every subscriber will be allocated New Shares.
Conditional allocation is expected to be communicated to investors on or around 16 December 2021.
The Company will announce the result of the Private Placement in a separate stock exchange notice after the completion of the bookbuilding period.
Settlement for the New Shares allocated in the Private Placement is expected to take place on a delivery versus payment basis (T+2), facilitated by a pre-funding agreement between the Managers and the Company.
The New Shares will be delivered under a separate ISIN, which will be merged with the Company’s ordinary ISIN once the listing prospectus has been approved by the Financial Supervisory Authority of Norway (Finanstilsynet).
Temporary trading of the New Shares will be facilitated on Euronext NOTC.
The completion of the Private Placement is subject to the following conditions:
(i) all corporate resolutions required to implement the Private Placement being validly passed, including the Board’s resolution on the conditional allocation of New Shares and the resolution by an extraordinary general meeting to carry out the Private Placement and increase the Company’s share capital by issuing the New Shares;
(ii) receipt of payment for the New Shares;
(iii) registration of the share capital increase related to the Private Placement with the Norwegian Register of Business Enterprises;
(iv) credit approval for the bank facility related to the Transaction; and
(v) satisfaction of other conditions for completing the Transaction, including continued listing of the Company on the Oslo Stock Exchange.
The Company reserves the right to cancel or modify the terms of the Private Placement at any time and for any reason. Neither the Company nor the Managers shall be liable for any losses incurred by subscribers if the Private Placement is cancelled, regardless of the reason for such cancellation.
The Board has assessed the Private Placement in light of the requirement for equal treatment of existing shareholders as set out in the Norwegian Public Limited Liability Companies Act, the Norwegian Securities Trading Act, the Oslo Stock Exchange’s rulebook, and Circular 2/2014, and is of the opinion that the implementation of the Private Placement complies with applicable rules and guidelines.
In the Board’s opinion, it is in the best interest of the Company and its shareholders to raise new capital for the purposes described above, and that such capital is raised through a private placement where the shareholders’ pre-emptive rights are set aside.
By conducting the capital raise as a private placement, the Company is able to secure new capital in an efficient manner, with significantly lower execution risk compared to a rights issue.
The Company will consider carrying out a subsequent offering (the “Repair Offering”) directed at existing shareholders of Scana as of 15 December 2021 (as registered in the VPS at the end of 17 December 2021), who did not participate in the Private Placement and who are not resident in jurisdictions where such offering would be unlawful or (outside of Norway) would require a prospectus, registration, or similar processes.
The subscription price in the Repair Offering will be the same as in the Private Placement.
Further information will be provided at a later stage.
Advokatfirmaet Schjødt AS has been engaged as the Company’s legal advisor in connection with the Transaction and the Private Placement.
For further information about Scana, please visit www.scana.no or contact:
Styrk Bekkenes, CEO Scana ASA E-post: styrk.bekkenes@scana.no T: +47 40 40 35 20
Torvald Ulland Reiestad, CFO Scana ASA E-post: Torvald.reiestad@scana.no T: +47 97 98 78 95 Oddbjørn Haukøy, CEO PSW Group E-post: obh@psw.no T: +47 91 17 19 14
Scana in brief:
Scana ASA is the parent company of a group of strong equipment and service providers to the maritime industry.
PSW Group in brief:
PSW Group supplies products, systems, and services to the energy and maritime industries. The company’s multidisciplinary expertise, state-of-the-art facilities, and strategic partnerships enable it to meet industry requirements and customer challenges with safe, reliable, and cost-effective solutions.
About the combined company
The combined company will be a strong global player with its headquarters in Bergen. The new organization will have approximately 450 employees in total. The company aims to become a key partner in the green transition across the shipping, offshore, energy, and aquaculture industries.
Both PSW and Scana have already made significant contributions to the green shift through deliveries of ready-made products and the development of new technologies. PSW is Europe’s leading player in shore power, and over the past year, has secured several contracts for the delivery of such systems in Europe, including for the Northern Lights carbon capture facility at Kollsnes.
The company also holds a strong position in maritime and land-based energy storage solutions, and operates a full-scale test center for battery systems and hydrogen at its Ågotnes facilities. In recent years, the company has been a major supplier to over 25 different offshore vessel hybridization projects.
More recently, PSW has developed intelligent battery storage systems for optimizing land-based power, and is currently working on the development of the first hydrogen-powered shore power system. This innovation has attracted significant international interest, and PSW is now positioned to offer hydrogen-powered shore power solutions to ports with limited existing power capacity.
Scana has recently made a name for itself in anchoring technology for floating offshore wind and the aquaculture industry. Its portfolio company Seasystems has, among other things, delivered 33 anchoring brackets that have been installed on the concrete foundations of the 11 wind turbines in Equinor’s Hywind Tampen project.
The same company has also supplied anchoring equipment to:
- Norway Royal Salmon’s offshore fish farm Arctic Offshore Farming
- Nordlaks’ offshore facility Jostein Albert
- The Pempa’q In-stream Tidal Energy Project in Canada
While sustainable technology solutions will be the main strategic focus for the “new” Scana, traditional products and services for the oil and gas industry will continue to represent an important part of the business.
PSW holds a strong position in the offshore industry, particularly within electrical systems, automation, and well control. The company currently delivers technology products related to power systems and well control, and in recent years has built a solid position with its own subsea electrification and well plugging solutions.
This information is considered inside information pursuant to the EU Market Abuse Regulation and is subject to disclosure requirements under Section 5-12 of the Norwegian Securities Trading Act.
The stock exchange announcement was published by Frøydis Nilsen Mathisen, Marketing Manager at Scana ASA, on 15 December 2021 at 16:30 CET.
IMPORTANT INFORMATION
Copies of this announcement are not and will not be distributed or sent to any jurisdiction where such distribution would be unlawful or would require registration or other measures.
The securities referred to in this stock exchange announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States unless registered under the Securities Act or pursuant to an applicable exemption from the registration requirements and in compliance with applicable U.S. securities laws.
The Company does not intend to register any part of the offering in the United States or conduct a public offering of securities in the United States. Any sale of securities in the United States referred to in this announcement will be made solely to qualified institutional buyers as defined in Rule 144A under the Securities Act.
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The matters discussed in this announcement may contain forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as “believe”, “expect”, “anticipate”, “strategy”, “intend”, “estimate”, “will”, “may”, “continue”, “should”, and similar expressions. These forward-looking statements are based on various assumptions, many of which are in turn based on further assumptions. Although the Company believes these assumptions were reasonable when made, they are subject to inherent and significant known and unknown risks, uncertainties, contingencies, and other important factors that are difficult or impossible to predict and are beyond the Company’s control.
Actual events may differ materially from any anticipated development due to a number of factors, including, but not limited to, changes in public sector investment levels, changes in general economic, political and market conditions in the markets in which the Company operates, the Company’s ability to attract, retain and motivate qualified personnel, changes in the Company’s ability to engage in commercially acceptable acquisitions and strategic investments, and changes in laws and regulations and the potential impact of any legal proceedings or regulatory actions.
Such risks, uncertainties, events and other important factors could cause actual events to differ materially from the expectations expressed or implied by the forward-looking statements in this announcement. The Company does not guarantee that the assumptions underlying the forward-looking statements are free from errors and does not accept any responsibility for the future accuracy of the opinions expressed herein or any obligation to update or revise the statements in this presentation to reflect subsequent events.
You should not place undue reliance on the forward-looking statements in this document.
The information, opinions, and forward-looking statements contained in this announcement are valid only as of the date of this communication and may be subject to change without notice. The Company undertakes no obligation to review, update, confirm, or publicly release any revisions to forward-looking statements to reflect events that occur in relation to the content of this communication.
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