The board of Nera ASA has received an offer from Thrane & Thrane to acquire the company’s mobile satellite communication operations.
The offer implies that Thrane & Thrane acquires the shares in Nera SatCom and the activities to be acquires is valued at 550 MNOK on a debt and cash free basis. Parts of the purchase price will be settled through a private placement of 472,000 new Thrane & Thrane shares towards Nera. The board of Nera ASA has decided to recommend the corporate assembly to accept the offer.
Thrane & Thrane and Nera SatCom are two leading providers of satellite telephones in the Inmarsat-system. A combined entity will create a united Scandinavian and world leading satellite communication company. Based on 2005 figures, the combined entity had pro forma revenues of 1,450 MNOK.
The disposed business had in 2005 sales totaling to approx. 500 MNOK and an operating profit of 27 MNOK before restructuring charges. Same figures for first half 2006 were 260 MNOK and 28 MNOK.
According to the offer, Thrane & Thrane will pay 405 MNOK in cash and conduct a private placement towards Nera ASA of 472,000 new shares in Thrane & Thrane. Nera ASA will through the private placement obtain an ownership of 8.8 percent in Thrane & Thrane. The financial gain for Nera ASA of the transaction is preliminary calculated to 450 MNOK.
The offer gives, according to the CEO of Nera ASA Bjørn Olafsson, an attractive price of Nera SatCom, while it also gives Nera and its shareholders a portion of the upside from this industry consolidation. He also emphasizes that mobile satellite communication, a niche in the international telecommunications industry, will be well suited with this consolidation.
The transaction is conditional upon approval by the corporate assembly of Nera ASA, which is expected to be held prior to the extraordinary general meeting, as well as relevant approvals from competition authorities in certain countries. The transaction is expected to be completed in the third quarter of 2006.
– The sale of the mobile satellite communication business will according to Nera strengthen the rationale for the proposed merger with Eltek ASA through the creation of a more focused business with a stronger financial position, says Mr. Olafsson, and the board of Nera ASA will accordingly stay firm with its positive recommendation of the merger with Eltek ASA.