In 2006 the turnover of NOK 379.3m yielded earnings before depreciation (EBITDA) of NOK 27.3m. Budgeted turnover in 2007 is NOK 600m and EBITDA NOK 66.5m. In the first quarter of 2007 the turnover was NOK 144.6m and EBITDA was NOK 18.1m.
The Acquisition of Sense EDM is a major step forward in TTS' targeting of the third business area; drilling and offshore equipment, in addition to ships equipment and port equipment. The common factor of the three business areas is handling equipment, a market in which TTS is a leading international player aiming to be among the 3 leading suppliers in the world within certain market segments. Today, TTS is one out of two leading suppliers of ships equipment.
Prior to the acquisition of Sense EDM AS, TTS is a one-stop supplier of advanced offshore handling equipment, including offshore cranes, for offshore supply vessels. By the take-over of Sense EDM AS, TTS will expand into the equipment market for fixed and floating offshore installations. 'The new TTS' has potential of considerable synergy effects in the areas of sales and marketing, after sales and service and procurement.
Sense EDM AS will constitute a new division in TTS, in addition to today's four divisions. Managing Director in Sense EDM Tom Fedog will be the head of the new division and be a member of TTS' Corporate Management Group. Tom Fedog has many years of experience from the industry, and was one of the founders when the company was established in 2000.
Sense ADM AS' order book at 31st of March was NOK 525m. The figure included NOK 75m of after sales and turnover from framework agreements. The company has further a portfolio of contract options, among others to Ability Drilling Management AS, and many other projects with good future prospects
An earn-out limited to NOK 75m depending on results in 2007 and 2008 is agreed upon in addition to the purchase price of NOK 525m. The purchase price is based on a cash free and debt free basis. The cash position is normalized to NOK 120m, which will be paid according to a separate agreement.
The purchase price will be financed by NOK 400m of long term debt and by NOK 75m of own cash, while NOK 50m will be financed by issuing of 756 773 TTS shares at a subscription price of NOK 66.07, which is the average closing price 16 April to 27 April. The transaction will be closed at 25 May 2007.
Sense EDM is located in Norway (Kristiansand and Stavanger) and in Canada (Edmonton). The company has 150 employees, of which 105 is located in Norway.
The company delivers complete drilling packages, drilling equipment, tubular handling systems, and patented rig technology to the onshore and offshore markets. The acquisition will enable further growth and constitute significant synergy effects by enabling the new group to supply complete equipment packages of drilling equipment, decks equipment and cranes to fixed and floating rigs. The company will be among the three leading players in this market.
Enclosure; pro forma figures for TTS and Sense EDM as per December 31, 2006.
In addition to the founders of the company, the sellers are among others the venture companies Energy Ventures in Stavanger and Selvaag Venture Capital in Oslo.
Due to this acquisition, the reporting of TTS' 1Q figures 2007 will be postponed to May 14, 2007. The presentation will include Sense EDM AS' pro forma Q1 figures.
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