Fjordkraft acquires Innlandskraft and strengthens its position as the leading
electricity supplier in Norway


17 July 2020


Fjordkraft Holding ASA (the “Company” “Fjordkraft”) has entered into an
agreement for the acquisition of 100% of the shares in Innlandskraft AS (the
"Transaction").


The key terms of the Transaction are as follows:

•	The Transaction will be structured as an acquisition of all shares in the
Target by the Company, from Gudbrandsdal Energi Holding AS and Eidsiva Energi AS
(the "Sellers").

•	The purchase price is based on an enterprise value of the Target of NOK 1,410
million on a cash and debt free basis and assuming an agreed normalised level of
working capital. The purchase price payable for the shares will follow a typical
´locked box´ mechanism, and will be finally calculated based on a set of audited
accounts for the Target to be established as per 30 June 2020. An interest will
accrue on the purchase price payable in cash from 30 June 2020 until closing of
the Transaction. 

•	50% of the purchase price shall be paid in cash by the Company to Eidsiva
Energi AS while the remaining 50% of the purchase price shall be paid in the
form of consideration shares in Fjordkraft to Gudbrandsdal Energi Holding AS at
an agreed price per consideration share of NOK 74.50. The share price represents
the volume-weighted average price of the Company’s share on Oslo Børs the last
fifteen trading days prior to signing. The cash portion of the purchase price is
expected to be financed by long-term debt and available cash. The completion of
the Transaction is not subject to financing.

•	Completion of the Transaction is conditional upon approval by the Norwegian
Competition Authority (Konkurransetilsynet), as well as certain other customary
closing conditions.

•	Closing of the Transaction is expected to take place during September 2020,
subject to satisfaction of the closing conditions. 



Strategic rationale

•	Further strengthening Fjordkraft’s position as the leading electricity
retailer in Norway, with an estimated market share of 27% after the Transaction.

•	Increases Fjordkraft’s presence in the Eastern part of Norway, with offices in
Hamar, Vinstra and Kongsvinger

•	Innlandskraft has a customer base with strong loyalty and customer
satisfaction as well as highly skilled employees, making the acquisition a good
strategic fit for Fjordkraft.

•	The acquisition of Gudbrandsdal Energi, with its high customer satisfaction
and organic growth potential, will play an important role in Fjordkraft’s brand
architecture going forward.

•	Significant potential for both cost synergies and increased sale of
value-added services and cross sales, as well as financial synergies related to
net working capital and purchase of electricity.


Key financial figures

•	Innlandskraft comprises two brands, Gudbrandsdal Energi and Eidsiva Marked,
with a total number of electricity deliveries of 239 thousand as per 30 June
2020, split ~92/8 between Consumer and Business deliveries. Innlandskraft is the
third largest electricity retailer in Norway.

•	The underlying EBIT estimate for 2020 (ex. COVID-19 effects) for Innlandskraft
is NOK 105m. Estimated net revenue for 2020 is NOK 290m.

•	Expected synergies: 
o	Net working capital is estimated to be reduced by NOK ~100m from the agreed
normalised level
o	Cost synergies are estimated to a minimum of NOK 30m with full effect from Q3
2021
o	In addition, Fjordkraft expects a positive effect on the Group’s total cost of
goods sold of minimum NOK 10m



Advisers

Pareto Securities acts as financial advisor, Advokatfirmaet Schjødt AS acts as
exclusive legal adviser and PwC acts as audit and financial DD adviser to the
Company in connection with the Transaction.

DnB Markets acts as financial adviser to the Sellers in connection with the
Transaction, and Advokafirmaet Thommessen and Advokatfirmaet BAHR acts as legal
advisors to Eidsiva Energi AS and Gudbrandsdal Energi Holding AS respectively.



For queries, please contact:
Morten A. W. Opdal, Head of Controlling and Investor Relations, +47 970 62 526



Important information

This stock exchange release contains certain forward-looking statements. By
their nature, forward-looking statements involve risk and uncertainty, as they
reflect current expectations and assumptions as to future events and
circumstances that may not prove accurate. A number of factors could cause
actual results and developments to differ materially from those expressed or
implied by such forward-looking statements.

This stock exchange release is not for distribution, directly or indirectly, in
or into the United States, Canada, Australia, Japan or any other jurisdiction in
which such distribution would be unlawful or would require registration or other
measures.

This stock exchange release does not constitute an offer for sale of securities
in any jurisdiction. The securities mentioned herein have not been, and will not
be, registered under the United States Securities Act of 1933 (the "U.S.
Securities Act"), and may not be offered or sold in the United States except
pursuant to an exemption from the registration requirements of the U.S.
Securities Act. There will be no public offer of securities in the United
States.

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