Hunter Group ASA enters into agreement to acquire IKM Subsea & Technology

Oslo, 15 February 2018: This stock exchange announcement is made pursuant to section 3.4 of the Oslo Børs' Continuing Obligations of stock exchange listed companies.

Reference is made to the announcement by Hunter Group ASA ("Hunter Group" or the "Company") published earlier today regarding the direct and indirect acquisition of all shares in IKM Subsea Holding AS ("IKM Subsea Holding"), IKM Subsea AS ("IKM Subsea") and IKM Technology AS ("IKM Technology") (together referred to as the "IKM Subsea & Technology Group") pursuant to the share purchase agreement (the "SPA") entered into with IKM Gruppen AS ("IKM Gruppen" or the "Seller") (the "Transaction"). 

The Transaction is expected to be completed during the first quarter of 2018.

Parties to the transaction, transaction structure and consideration

IKM Gruppen owns all the shares in IKM Subsea Holding, which in its turn owns all the shares in IKM Subsea. IKM Technology is jointly owned by IKM Gruppen and IKM Subsea Holding, holding 17.53% and 82.47% of the shares in IKM Technology, respectively. Prior to completion of the Transaction, certain intra group debt of approximately NOK 330,000,000 (including interest) owed by IKM Subsea to the Seller shall be converted to equity (the "Debt Conversion"). Following the Debt Conversion, IKM Subsea will be jointly owned by IKM Gruppen and IKM Subsea Holding.

Hunter Group has entered into an agreement with the Seller to directly and indirectly acquire 100% of the issued and outstanding shares in the IKM Subsea & Technology Group. Completion of the Transaction is subject to customary completion conditions, including inter alia the following:

(i)     Each of the Seller and its affiliates and the IKM Subsea & Technology Group having been released of guarantees, letters of credit, encumbrances and other affiliated securities, provided in favour of each other;

(ii)   the extraordinary general meeting of the Company having resolved to increase the share capital by issuance of shares in a private placement (as described in item (iii) below), as well as by issuance of the Consideration Shares (as defined below);

(iii)  successful completion of a private placement in the Company with a minimum subscription amount of NOK 75,000,000 (the "Private Placement"); and

(iv)  the extraordinary general meeting of the Company having elected up to two representatives nominated by IKM Gruppen to the Company's board of directors with effect from completion of the Transaction.

The SPA otherwise contains terms customary in the Norwegian market, including representation and warranties and indemnities given by the Seller.

The purchase price in the Transaction shall be settled by (i) a cash payment of NOK 250,000,000 (the "Cash Payment"), (ii) issuance of 23,901,412 new ordinary shares in the Company to the Seller (the "Consideration Shares"), and (iii) by an interest free seller's credit with a total amount of NOK 55,455,063 (the "Seller's Credit") which shall be converted to new ordinary shares in the Company at the same subscription price as in the Private Placement (the "Conversion Shares"). 

The purchase price in the Transaction as set out above is based on the consolidated balance sheet of 31 December 2017 for the IKM Subsea & Technology Group and is subject to customary adjustments for cash, debt and normalised working capital. Such adjustments shall be settled in cash. The SPA contains customary no leakage provisions for the period between 31 December 2017 and completion of the Transaction.

The Consideration Shares and the Conversion Shares shall be issued pursuant to resolutions by the Company's extraordinary general meeting to be held on or about 15 March 2018 (the "EGM").

The Seller shall on completion of the Transaction subscribe for the Consideration Shares which shall be settled by a contribution in kind being the shares in the IKM Subsea & Technology Group. The Conversion shares shall be settled by set-off of the Seller's Credit.

The Seller has undertaken not to, for a period of 24 months following completion of the Transaction (the "Lock‑up Period"), offer or sell or otherwise dispose of any of the Consideration Shares or the Conversion Shares without the prior written consent of the Company's board of directors.

Timetable

29 November 2017 -        Signing of a letter of intent in relation to the Transaction by Hunter Group and the Seller 
15 February 2018 -        Signing of the SPA by Hunter Group and the Seller
16 February 2018 -        Expected completion of the Private Placement
15 March 2018 -        Expected resolution by the EGM to issue the Consideration Shares; the Conversion Shares and the shares in the Private Placement
15 March 2018 -        Expected completion and settlement of the Transaction-        Issuance of the shares in the Private Placement and the Consideration Shares to a separate ISIN awaiting approval of a prospectus
End of March 2018 -        Approval of a listing prospectus for the Consideration Shares and the shares issued in the Private Placement

Significance of the Transaction for Hunter Group

The acquisition of the IKM Subsea & Technology Group represents a significant milestone for Hunter Group. The IKM Subsea & Technology Group is one of the leading remotely operated vehicle ("ROV") operators in the North Sea with global market presence and will provide Hunter Group with a strong platform for growth in the subsea segment. It is furthermore a good fit with Hunter Group's focus on differentiating technologies at competitive cost. The IKM Subsea & Technology Group is in the forefront of developing new ROV technologies as demonstrated by a 10 years contract with Statoil Petroleum AS for four ROVs which are operated from the IKM Subsea & Technology Group's onshore control centre. Following completion of the Transaction, IKM Gruppen will become a significant shareholder in Hunter Group and will focus its future subsea activities through Hunter Group. For further information, please see the investor presentation dated 15 February 2018 prepared by Hunter Group in connection with the Transaction, attached to the announcement published by the Company earlier today.

Agreements to the benefit of affiliates, board members or management in Hunter Group or the IKM Subsea & Technology Group

On 22 May 2017, Hunter Group entered into a consultancy agreement with Middelborg AS, pursuant to which chief executive officer of Middelborg AS, Kristian Lundkvist, has acted as transaction advisor to Hunter Group. According to this agreement, and as approved by the Company's board of directors, Mr. Lundkvist is entitled to a success fee of 1.5% of the market value of the Transaction, of which 50% shall be settled in by issuance of shares in the Company at a subscription price of NOK 4.50 per share and 50% shall be settled by shares to the same subscription price as in the Private Placement.

To the best of the Company's knowledge, there are no other agreements entered into, or that are planned to be entered into, in connection with the Transaction for the benefit of affiliates, senior employees or members of the board of directors of the Company or for the senior employees or board of directors of the respective companies within the IKM Subsea & Technology Group.

Information on the IKM Subsea & Technology Group is included in a separate document attached to this announcement. 

* * *

This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

For further information, please contact:
Vegard Urnes, interim CEO, +47 90 58 54 32, vu@huntergroup.no
Ola Beinnes Fosse, CFO, +47 97 53 12 27, obf@huntergroup.no

www.huntergroup.no

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