Agility Fuel Systems and Hexagon Composites announce merger to create Agility Fuel Solutions
(Thomson Reuters ONE) -
Hexagon Composites, the global leader in composite cylinders for natural gas
vehicles (NGVs), and Agility Fuel Systems, the leader in natural gas fuel system
solutions for commercial vehicles, announced today that the companies will merge
Hexagon Composites' CNG Automotive Products Division, which includes medium- and
heavy-duty vehicle composite cylinder manufacturing operations and its bus
systems business unit, with Agility to form Agility Fuel Solutions. The new
entity will be owned equally by Hexagon Composites and Agility's current
investors. Agility Fuel Solutions will continue to transform the global medium-
and heavy-duty vehicle industry with clean fuel technologies.
The merger is uniquely positioned to drive innovation in the industry, while
better serving the global market and expanding its product offerings worldwide.
The strategic integration of fuel systems and cylinders will provide value by
reducing up-front costs for clean technology, accelerating commercialization of
new product ideas, and driving faster returns on investments. The combined
company will have production sites in the US, Norway, and Brazil, with technical
centers located in Lincoln, Nebraska and Kelowna, British Columbia. Agility Fuel
Solutions will manufacture cylinders for use in its systems, as well as for
direct sale with offices in the US, Canada, Latin America, Norway, India, and
Southeast Asia.
"This merger combines two market leaders with strong backgrounds in engineering
creativity, profitable growth and operational excellence" said Kathleen Ligocki,
named CEO of the newly merged company, Agility Fuel Solutions. "Agility is proud
of our successful relationship with Hexagon, and together we will target driving
adoption of clean natural gas systems in commercial vehicle markets around the
world."
"This transaction is a natural progression of our existing joint venture
arrangement and will expand our ability to create unique value for our customers
by deepening our technical capabilities and expanding our reach globally."
stated Sam Gabbita, General Partner at Element Partners, the lead investor for
Agility Fuel Systems. "Natural gas is a key component of the global green shift,
and we remain committed to providing the industry with the highest quality
products to optimize its use." said Jon Erik Engeset, President and CEO of
Hexagon Composites ASA.
Natural gas is an economical and environmentally attractive fuel for medium- and
heavy-duty vehicles, addressing the world's environmental health with
significantly lower emissions of greenhouse gases, NOx and particulate matter.
It is a game changer for the global economy, especially when combined with
renewable sources and pricing stability relative to conventional liquid fuels.
Hexagon's Mobile Pipeline®, Hydrogen Products and Light-Duty Vehicles divisions
will continue to operate as Hexagon Composites. The transaction is expected to
close in the 3rd quarter of 2016.
The following additional information is provided in accordance with Continuing
Obligations of listed companies section 3.4.2:
1.) Transaction and parties: The transaction described above is subject to
final board approvals and completion.
2.) Consideration: The total consideration for the 50% interest in the newly
formed Agility Fuel Solutions entity, in addition to the contribution of the CNG
Automotive Products Division, is a cash payment of USD 17.5 million (approx. NOK
140 million) from available funds. The implicit transaction value of the new
entity is USD 318 million of which Hexagon Composites group's 50% share is then
USD 159 million (approx. NOK 1.3 billion)
3.) Further description of the companies and transaction: Please refer to the
Attachment to this notice which gives the Financial Year 2015 proforma financial
statements on a carve out basis for Hexagon Composites ASA's contributed CNG
Automotive heavy and medium duty business. This includes assets held by the
wholly owned Hexagon Lincoln Inc subsidiary, as well as 100% of the shares of
Hexagon Bus Systems AS. The recently acquired Hexagon Composites Brazil Ltda
follows this transaction. The Net Assets contributed, on this reference basis,
is USD 50 million (approx. NOK 400 million). Total Operating Income on this
reference basis is USD 87 million (approx. NOK 700 million). The net profit on
this reference basis, restated on an "as previously reported" basis, is
approximately USD 2.5 million (NOK 20 million) after group financial costs,
royalties and charges. The total number of employees in this business is 200. As
the transaction is primarily a carve-out, information around board of directors
etc. is not considered applicable. The new entity is expected to be self-
financed. The new entity on a combined basis using Financial Year 2015 proforma
financial statements of both contributed businesses is estimated to have Net
Assets and total Operating Income (Revenue) of USD 115 million (approx. NOK 925
million) and USD 209 million (approx. NOK 1.7 billion) respectively.
4.) Consequences of the transaction: In addition to the strengthened strategic
impacts disclosed above, the transaction will trigger a move from the current
consolidation accounting for the contributed business, to equity accounting for
this new jointly controlled entity. This will mean that profit and loss items
previously reported in gross terms will, going forward, be reported in net terms
as share of profit or loss from joint ventures and associates, in the Income
Statement. As a result of the transaction, excess value over book value
(including Goodwill) of the magnitude of NOK 370 million is expected to be
recognized on the Statement of Financial Position. A corresponding one-time
extraordinary profit will be realized in the Income statement. Aside from these
one-off entries, the initial impact to the consolidated group net income or
total assets is not considered significant. Final quantification of impacts and
accounting classification will only be available post-closing and so these may
vary from the estimates given. An updated statement, together with proforma
financial statements of the new entity, will be prepared after final completion
of the transaction.
5.) Agreements with directors or senior executives in relation to the
transaction: No such agreements have been entered into in relation to this
transaction.
Agility Fuel Systems, headquartered in Santa Ana, California, is the leading
developer and manufacturer of natural gas fuel systems for medium and heavy-duty
vehicles in North America. Agility's highly engineered, proprietary natural gas
fuel systems store, manage and deliver natural gas to the engine and enable the
safe and effective use of natural gas as a vehicle fuel for local, regional and
long-haul applications.
Hexagon Composites is a publicly listed company with its headquarters in
Aalesund, Norway.It operates one of the world's most advanced facilities for
designing, testing and manufacturing all-composite cylinders for gas
applications. It is a globally leading supplier in the industry and sets the
standard for excellence in efficiency, safety and durability.
Both companies have been leaders in the natural gas industry for over two
decades.
For more information:
Jon Erik Engeset, CEO, Hexagon Composites ASA
Telephone: +47 916 30 550 | jon.erik.engeset(at)hexagon.no
David Bandele, CFO, Hexagon Composites ASA
Telephone: +47 920 91 483 | david.bandele(at)hexagon.no
Solveig D. Saether, Communication Manager, Hexagon Composites ASA
Telephone: +47 906 34 977 | solveig.saether(at)hexagon.no
For more information, visit the Agility website at agilityfs.com and Hexagon
Composites website hexagon.no.
This information is subject to the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
HEX Carve-out Financials 14-06-2016:
http://hugin.info/132600/R/2020644/750537.pdf
HEX Press Release 14-06-2016:
http://hugin.info/132600/R/2020644/750554.pdf
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Hexagon Composites ASA via GlobeNewswire
[HUG#2020644]
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Datum: 14.06.2016 - 18:16 Uhr
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News-ID 477678
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"Agility Fuel Systems and Hexagon Composites announce merger to create Agility Fuel Solutions"
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