TTS Marine ASA has entered into a letter of intent with Umoe Industri regarding takeover of Umoe Schat-Harding, which supplies lifeboats and other life-saving equipment to the shipping and offshore markets.
The company has an expected turnover of just under NOK 500 million. The agreed purchase price is around NOK 360 million, based on a net interest bearing debt of around NOK 30 million. A cash payment of around NOK 210 million will be loan financed, and approximately NOK 150 million will be financed by an issue of 4 000 000 new shares in TTS Marine ASA. – The acquisition gives TTS access to products that make TTS a one-stop supplier of decks equipment, says Johannes D. Neteland, president and CEO.
The agreement between the two companies is a letter of intent, subject to approval of a final purchase agreement by the companies’ boards. In the interim period, until a prospective final agreement is entered into, TTS will conduct a due diligence of Umoe Schat-Harding.
- Acquisition of Umoe Schat-Harding is in accordance with TTS’ strategy of expanding through organic growth and acquisitions, and to become a one-stop supplier for decks equipment on a global basis. We have been working towards this for several years. The TTS Group’s turnover will increase from NOK 1.6 billion to over NOK 2 billion, and lifeboats and safety equipment will form a new division in the Group. The potential for increasing the joint business, both with respect to new sales and especially after sales activities and service activities are considerable.
- We believe TTS has what it takes to further develop the lifeboat and safety business. Our intention is to contribute to the development of the TTS Group as an active and long-term shareholder, says Executive Vice-President Jarle Roth in Umoe AS. He is Chairman of the Board in Umoe Schat-Harding. Umoe’s ownership in TTS Marine ASA upon implementation of the agreement and an issue of new shares will be approximately 16.5 percent.
Companies in 12 countries
The TTS Group comprises four divisions: Dry Cargo Handling, Marine Cranes, Port and Material Handling and Deck Machinery. Upon acquisition of Umoe Schat-Harding, lifeboats and safety equipment will form a new division, to be headed by the companies present Managing Director, Ove Røsseland. Incorporation of Umoe Schat-Harding will have no effect on manning; however management of sales and services will be coordinated. The takeover will imply that TTS increases from 17 operating units in 9 countries to a group of 25 units in 12 countries. The new locations will be Singapore, the Netherlands and England. Additionally, a global network of sales and service representatives will be included into the TTS Group.
Strengthens activities in Norway
At present, TTS has 580 employees in total, and the acquisition will entail that TTS gains 535 new employees. In Norway, TTS has 150 employees in Bergen, Kristiansand and Drøbak. Umoe Schat-Harding has 170 employees in Kvinnherad (Ølve and Rosendal), which overall will strengthen the companies activities in Norway, says Johannes D. Neteland.
Expansion and excellent results
Similar to TTS, Umoe Schat-Harding has prospered tremendously over the past few years, due to increased activities in the international shipbuilding and ships equipment markets. The company had a turnover in 2005 of NOK 392 million, and operating profit before depreciation totalled NOK 37 million. The upward trend continues in 2006. At the end of June this year, turnover was NOK 236 million with an operating profit before depreciation of NOK 37 million. The order backlog after the first six months of 2006 was NOK 440 million. The company produces lifeboats in Norway and China and davits in the Czech Republic, and has a global network for sales and service. After sales activities constituted 40 percent of the turnover in the first half year of 2006.
Targeting the after sales market
- Umoe Schat-Harding has its strength in the cruise segment as well as in the offshore market, whereas TTS mainly delivers to the regular merchant fleet. Collectively, the companies should increase sales of new products in these markets, and strengthen the effort with respect to service and after sales. International regulations, effective from 1 July 2006, instruct ship-owners to ensure that suppliers or representatives approved by suppliers conduct inspections of lifeboats and other safety equipment on a yearly basis, with a complete overhaul every five years. This will imply more frequent contact with our sales and service staff. We will therefore increase manning and expand our network for after sales globally, to offer ship-owners and shipyards our entire range of ships equipment, informs Neteland.
About TTS Marine ASA
TTS Marine ASA is an international group that develops and delivers marine equipment. Operations are organised into the following four divisions: Dry Cargo Handling, Marine Cranes, Ports and Material Handling and Deck Machinery. The TTS Group is the world’s second largest supplier within its market segments.
TTS has around 580 employees, with a primary emphasis on engineering skills. The group has 17 companies in Norway, Sweden, Finland, Germany, the Czech Republic, Italy, China, USA and South Korea, including two joint venture companies in China and one in Korea.
TTS Marine ASA’s head office is located in Bergen, Norway, and the company is listed on the Oslo Stock Exchange.
For more information on TTS: www.tts-marine.no
For more information on Umoe Schat-Harding AS: www.schat-harding.com
Contact persons:
President & CEO Johannes D. Neteland
Phone: +47 55 94 74 02 Mobile: +47 918 46 906
Email: johannes.neteland@tts-marine.no
Executive Vice-President Jarle Rooth, Umoe Group
Mobile: +47 917 92 985
Email: jarle.roth@umoe.no