Simrad Optronics is through the acquisition of Vinghøg creating a world class defence products company. Simrad Optronics ASA and Vingtech Holding AS have signed an agreement on the acquisition of 100% of the shares in Vinghøg AS. The two companies serve the same customer groups, have complementary products and a similar resource and expertise base.
Simrad Optronics and Vinghøg expect a combined revenue of NOK 460-480 million for 2006 (pro forma) and a combined EBITDA of NOK 45-50 million (Simrad Optronics Fire & Gas division not included). Both companies have grown considerably in recent years and the trend is expected to continue. Vinghøg will at takeover date have a minimum of NOK 30 million in cash and no interest bearing debt.
The merger of the companies activities creates substantial synergies, primarily within marketing and product development, but also in manufacturing. The merger will not lead to redundancies.
Simrad Optronics will pay NOK 320 million for Vinghøg AS. NOK 160 million will be paid in cash and NOK 160 million in Simrad Optronics shares. The cash element is financed in full through a loan from Nordea. Completion of the acquisition is conditional on approval being given to issue the consideration shares at an Extraordinary General Meeting of Simrad Optronics on 03.01.2007. The transaction is expected to be completed around 15.01.2007 due to the issue of the consideration shares.
The consideration shares will be issued at a price per share that is 1% above todays closing price per share on the Oslo Stock Exchange subject to a maximum of NOK 11.50 per share. Simrad Optronics has decided to demerge its Fire & Gas division to become an independent listed company under the name Simtronics ASA. The demerger will be carried out with effect from 1.1.2007 prior to completion of the acquisition of Vinghøg. Hence, the issue price and the maximum price of the consideration shares being fixed today, will be adjusted with the share price of the demerged company Simtronics ASA, based on volume weighted average share price for the Simtronics share the three first trading days after listing. The consideration shares will be subject to lock-up restrictions: 1/3 will be released after one year, a further 1/3 after two years and the final 1/3 after three years.
Commenting on the acquisition, Simrad Optronics CEO Tore Amundsen said: Vinghøg is a well run company with highly competent people and a strong position in the market. By joining forces we create a world class company within our sector of the defence industry.
Vinghøgs Managing Director, Trygve Egenes, said: Our customers will benefit from an even stronger supplier, with considerable resources in product development and international market penetration. Our employees will have the satisfaction of working for an industry leader.
Simrad Optronics has its main operations in Oslo, while Vinghøg is based on Nøtterøy south of Oslo. Both locations will be continued under a joint group management.
Simrad Optronics is a leading supplier of military and industrial electro-optical instruments. The company exports to more than 40 countries and sales outside Norway last year amounted to 77% of the total turnover. Since its beginning in 1947 the company has worked closely with the research units of the Norwegian armed forces and with users of military equipment. Through a combination of innovative research and development and diversification into new areas, Simrad Optronics has developed a range of new products that are world leaders in their areas. In 2005 the defence and security division of Simrad Optronics recorded sales of NOK 181.4 million and an EBITDA result of NOK 15.4 million. The shares in Simrad Optronics are listed on the Oslo Stock Exchange.
Vinghøg, established 1950, represents experience and solid expertise in the development and manufacturing of systems and products combining electro-optics and mechanical engineering. The company has a strong and long-lasting position as a partner and supplier to the Norwegian armed forces and defence contractors. Vinghøg is well positioned for further growth both in Norway and internationally. In 2005 Vinghøg recorded sales of NOK 158.5 million and an EBITDA of NOK 29.9 million. Sales outside Norway represented 13% of turnover.
A new management team with representation from the two companies has been established. The corporate management is headed by Tore Amundsen, CEO of Simrad Optronics. Trygve Egenes, Managing Director of Vinghøg, will become site manager and responsible for the operations on Nøtterøy, while the business areas will report directly to the new corporate management team.