Opus reaches settlement in dispute in United States
A settlement has been reached regarding the claims brought in June 2017 against Opus Group AB (publ) and Opus Inspection, Inc. (collectively, “Opus”), in the United States District Court for the Southern District of New York (the “Lawsuit”) by Mr. Pradeep Tripathi and by one of his companies, Nexus Environmental, LLC (“Nexus”).
In the Lawsuit, Tripathi alleged that he had not received the full earnout payment due to him under the terms of the Sale and Purchase Agreement entered in 2008 when Opus acquired Systech International LLC (“Systech”). Also in the Lawsuit, Nexus alleged that Opus had engaged in anti-competitive conduct that prevented Nexus from competing in the vehicle inspection market in California.
Under the terms of the settlement, the parties exchanged releases with respect to all claims (including claims regarding anti-competitive conduct) and agreed upon a payout schedule expressly intended to substitute for the earnout payments which would otherwise become due to Tripathi under the Systech acquisition agreement. The earnout claim has been settled for a total amount of USD 13.0 million to be paid out over five years. The maximum earnout (in nominal value) to Tripathi, relating to the Systech acquisition, has thereby been reduced by USD 1.8 million.
The discounted value of the agreed payments relating to Tripathi amounts to approximately USD 12.0 million as per December 31, 2017. The difference between the USD 12.0 million and the provision accounted for as per December 31, 2017 at USD 10.8 million will be adjusted directly to goodwill, in accordance with the accounting principles described in the Opus 2016 Annual Report.
“We believe this to be a fair outcome both for Opus and Tripathi. By reaching this agreement we avoid significant anticipated legal expenses without hampering our ability to deliver on our growth plan.” says Linus Brandt, CFO and Executive Vice President of Opus Group.
Gothenburg, March 2, 2018
Opus Group AB (publ)
This information is information that Opus Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08:30 CET on March 2, 2018.
For additional information, please contact:
Linus Brandt, CFO & Executive Vice President
Phone: +46 722 44 09 05
E-mail: linus.brandt@opus.se
Helene Carlson
Director of Corporate Communications & Investor Relations
Phone: +46 765 25 84 93
E-mail: helene.carlson@opus.se
About Opus
Opus is a technology-driven growth company in the vehicle inspection and intelligent vehicle support markets. The company has a strong focus on customer service and innovative technology within emission and safety testing and intelligent vehicle support. Opus had approximately SEK 1.9 billion in revenues in 2017 with solid operating cash flow and good operating profitability. Opus’ plan is to reach USD 400 million in revenues and USD 100 million in EBITDA by 2021. The majority of the growth is estimated to come from the international expansion of the vehicle inspection business, with a primary focus on the Latin American and Asian markets, and the expansion of the intelligent vehicle support business. With approximately 2,200 employees, Opus is headquartered in Gothenburg, Sweden. Opus has 34 regional offices, 24 of which are in the United States and the others in Sweden, Argentina, Chile, Mexico, Peru, Pakistan, United Kingdom, Germany and Australia. Opus has production facilities in the U.S. in Hartford, Ann Arbor and Tucson. The Opus share is listed on Nasdaq Stockholm.