DGAP-News: SFC Energy AG: next strategic step towards systems supplier, forward integration and expansion into North-American oil&gas market by acquiring Simark Controls Ltd.
(firmenpresse) - DGAP-News: SFC Energy AG / Key word(s): Acquisition/Change in Forecast
SFC Energy AG: next strategic step towards systems supplier, forward
integration and expansion into North-American oil&gas market by
acquiring Simark Controls Ltd.
05.07.2013 / 00:05
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Acquisition Highlights and Rationale
- Major growth potential through direct market access: For 40 years,
Simark is an established value added reseller (VAR) in the strongly
growing Canadian oil&gas industry, one of the fastest growing market
segment for SFC energy solutions
- Strengthened system solution competence: Simark's product integration
and manufacturing expertise complements SFC's product portfolio
- Stabilized business portfolio: increased share of Industry business and
reduced dependence on cyclical Consumer market and low predictability
Defense market
- Growth leap and earnings contribution from acquisition expected
starting September 2013
- Direct access into the dynamic North-American oil&gas market for
SFC's environmentally friendly fuel cells and energy solutions
- Calgary site to be established as competence centre for oil&gas
solutions
Brunnthal/Munich, Germany, July 4, 2013 - SFC Energy AG, a market leader
for off grid power generation and stationary power distribution, today
signed a contract to acquire Simark Controls Ltd. (Simark), a Canadian
value added (VAR) distributing company with product integration and
manufacturing expertise for power products, instrumentation, and
automation. This forward integration is a further important step in
implementing SFC's strategy as a systems provider.
About Simark Controls Ltd.
Simark has approx. 70 employees and is a service oriented, 'Value Added
Distributing Company' specializing in the Sales and Service of high quality
instrumentation, automation and power products. Simark provides
instrumentation and measurement systems, power components and drives,
security and surveillance equipment for various applications in the oil&gas industry as well as in the mining, forestry and community supply
markets. Incorporated in 1971, Simark Controls' head office and production
facilities are located in Calgary, Alberta. Sales and service offices
located in Edmonton, Alberta; Saskatoon, Saskatchewan and Vancouver,
British Columbia.
In financial year 2012 Simark generated revenues (excluding commissions and
service revenues) of approx. EUR 20.2 million (CAD 27.3 million) (2011:
approx. EUR 17.5 million (CAD 23.6 million)). For 2013 revenues of EUR 20
to 23 million are expected.
Terms of Transaction
The net purchase price payable for all Simark shares is up to approx. EUR
18.52 million (CAD 25.00 million), consisting of a cash component of
approx. EUR 12.04 million (CAD 16.25 million payable in cash at closing of
the transaction, of which CAD 4.125 will be financed by a Canadian
commercial bank and the remainder from the SFC Group's existing cash
resources), a SFC share component of approx. EUR 2.78 million (CAD 3.75
million) and another cash component of up to approx. EUR 3.70 million (CAD
5.00 million), which will be paid from 2014 to 2016 in three yearly
instalments each up to approx. EUR 1.23 million (CAD 1.67 million) -
depending on incidence or absence of certain events.
In the context of the SFC share component, Simark's shareholders will
receive approx. 518,000 new SFC shares arising from the Company's existing
authorized capital. The shares will be valuated at EUR 5.39, which is the
volume weighted average share price of the past 60 days plus a 5% premium.
The shares are subject to a de facto lock-up until 2015. The transaction is
expected to be completed (Closing) within the third quarter of 2013.
Synergies
Using Simark's strong sales and service organization SFC intends to
accelerate its market penetration into the attractive North American oil&gas industry. Combining Simark's direct market access with the existing SFC
partner structure, current growth rates shall be even surpassed. Further
regional expansion of the business into the U.S. should yield additional
growth opportunities.
SFC's environmentally friendly, low carbon footprint energy solutions are
mainly used to power instrumentation as well as surveillance and security
applications (SCADA) in the oil&gas industry today. Utilizing a joint
sales and service organization for the entire product offering shall
generate significant synergies.
Simark's product integration and manufacturing capabilities will enable the
Group to develop and manufacture market specific solutions which contain
SFC fuel cells and PBF power supplies in the second phase of integration.
Furthermore it is intended to integrate SFC's non-government business in
North America into the new joint organization and run it out of Calgary as
the regional headquarters.
The planned aggregate pro-forma revenues 2013 of the new SFC Group will
amount to approx. EUR 50 to 55 million; of which about 75% will be
generated with industrial customers. This will further reduce SFC's
dependence on the cyclical Consumer market and offset the low
predictability of the Defense market.
Market
Canada has the third largest oil reserves in the world, after Saudi Arabia
and Venezuela. More than 95% of these reserves are located in the province
of Alberta. In 2012 the capital expenditure in this CAD 100 billion
industry amounted up to CAD 25 billion. A high single digit growth rate is
expected for the upcoming years in a politically and economically stable
environment.
The high demand for off-grid energy solutions combined with challenging
climatic boundary conditions, have been the basis for consistent growth for
SFC's environmentally friendly energy solutions. This market segment has
become one of the fasted growing businesses of SFC.
Management Team
The current Simark shareholders will continue to provide the leadership of
Simark within SFC Group.
Experienced SFC managers will complement the leadership and drive a
successful integration together with the current Simark team. Together they
will insure the further growth of the non-government business in North
America.
'We are excited to become part of a leading and well capitalized provider
of environmentally friendly power solutions such as SFC Group,' says Mark
Wheeler, President and main shareholder of Simark Controls. 'Combining our
long-term experience gained over the last decades and the tremendous
know-how we will now be able to offer highly efficient, customized complete
solutions to users worldwide.'
'The acquisition of Simark Controls Ltd is a logical next step in
implementing SFC's strategy and a landmark deal for our company at the same
time. We are gaining direct access to our fastest growing market segment
(oil&gas) and again we are significantly enlarging system solution
capabilities within SFC Group. The third asset is a top class team of
highly experienced entrepreneurs and managers who are joining us. I'm truly
thrilled about the Simark team coming onboard. Together we will establish
the competence centre for the oil&gas industry in Calgary', says Dr.
Peter Podesser, CEO of SFC Energy AG.
Advisors and Counsel
FCF Fox Corporate Finance, Munich, Freshfields Bruckhaus Dehringer,
Hamburg, and Blake, Cassels&Graydon LLP, Calgary acted as advisors to
SFC. For Simark, Scotiabank Mid-Market Capital Advisors, Toronto and
Bennett Jones LLP, Calgary acted as advisors.
About SFC Energy AG
SFC Energy AG (www.sfc.com) is a market leader for off grid and stationary
power generation and distribution. With approx. 27,000 fuel cells sold the
Company has successfully and globally established fully commercialized and
award winning products in the Consumer, Industry, and Defense&Security
markets for many years. Equally successfully, the group develops, produces
and globally distributes higher level power management components, e.g.
converters and switched mode power supplies. The products increasingly are
delivered as power supply system solutions according to customer
requirements. SFC is DIN ISO 9001:2008 certified. The Company is based in
Brunnthal/Munich, Germany, and operates facilities in the Netherlands and
Romania, and a sales organization in the U.S. SFC Energy AG is listed at
the Deutsche Boerse Prime Standard (WKN: 756857 ISIN: DE0007568578).
SFC Investor Relations and Press Contact:
Barbara von Frankenberg
Head of IR and PR
SFC Energy AG
Eugen-Sänger-Ring 7
D-85649 Brunnthal
Tel. +49 89 673 592-378
Fax. +49 89 673 592-169
Email: barbara.frankenberg(at)sfc.com
End of Corporate News
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Language: English
Company: SFC Energy AG
Eugen-Saenger-Ring 7
85649 Brunnthal
Germany
Phone: +49 (89) 673 592 - 100
Fax: +49 (89) 673 592 - 169
E-mail: info(at)sfc.com
Internet: www.sfc.com
ISIN: DE0007568578
WKN: 756857
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, München, Stuttgart
End of News DGAP News-Service
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219950 05.07.2013
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