Opcon signs MoU to divest its compressor and Waste Heat Recovery business to China for 400 m SEK Opcon

Regulatory News:

Opcon AB, the energy and environmental technology Group, has signed a binding Memorandum of Understanding to sell the lionpart of its Compressor technology and Waste Heat Recovery business, including the subsidiaries Svenska Rotor Maskiner AB, Opcon Energy Systems AB and the 48,9796% of the shares in its Chinese Joint Venture Fujian Opcon Energy Technology Co. Ltd., together with all compressor and Opcon Powerbox intellectual property. The MoU is subject to, among other things, due diligence as well as the negotiation and entry into definitive legal documentation, Share purchase agreement ("SPA”).

The preliminary purchase price has been set to 400 m SEK on a cash-free, debt free basis and is subject to a customary Due-Diligence.

The MoU has been signed with Opcon’s Chinese partner Fujian Snowman Co. Ltd., acting on behalf of the Chinese Investment Fund Fujian XingXueXuanYuan Capital Management Co., Ltd., that is being set up by Snowman together with other Chinese investors for the intended purchase.

Snowman is Opcon’s largest recurring customer and second largest shareholder controlling 17 % of the capital and voting rights of Opcon.

A final share purchase agreement is expected to be signed on June 30 with closing on September 30.

The board of Opcon intends to take in a third party value assessment and to call for an extra shareholder’s meeting after the signing of the share purchase agreement in order for shareholders to vote on the deal.

Opcon

Svenska Rotor Maskiner AB (SRM) was founded in 1908 as AB Ljungströms Ångturbin and is the inventor of the screw compressor. SRM is Opcon’s center-of-excellence for compressor technology and holds all intellectual property related to the compressor technology that has been developed by it since the 1930’s. Opcon Energy Systems AB is the operating company in the compressor and waste heat recovery part of Opcon’s business and the owner of the Opcon Powerbox technology for generating electricity from low-temperature waste heat. SRM and OES has around 45 employees and had a joint sales turnover of 71,4 m SEK in 2014 with an operating profit EBITDA of 8,9 m SEK.

"SRM is a part of Swedish industrial history. That SRM and Opcon Energy Systems along with our new cutting-edge energy- and environmental technology Opcon Powerbox are now being sold to China is something of a sign of our times. The majority of our sales turnover in these companies have Chinese final customers, and we see how the Chinese are now investing heavily both in industry and alternative energy. China is today by far the largest investor in alternative energy sources. The companies are primarily development companies. These last few years we have been struggling to finance these operations in Sweden, but we feel confident that this will give SRM and Opcon Energy Systems the means and connections in the fast-growing Chinese market in order to develop, grow and to employ even more people also in Sweden” says Rolf Hasselström, President and CEO of Opcon.

"The sale will strengthen Opcon’s financial position considerably and we leave the remaining part of Opcon with around 100 employees in Sweden, Germany and the UK with a strong focus in Bioenergy. As such, this deal will also trigger a complete overhaul of the organizational structure and strategy of Opcon,” says Rolf Hasselström, President and CEO of Opcon.

The Opcon Group

Opcon is an energy and environmental technology Group that develops, produces and markets systems and products for eco-friendly, efficient and resource-effective use of energy.

Opcon has activities in Sweden, Germany and the UK. There are around 140 employees. The company’s shares are listed on Nasdaq OMX Stockholm. The Group comprises one business area:

Renewable Energy focuses on the following areas: compressor technology, electricity generation based on waste heat, bioenergy-powered heating and CHP plants, pellets plants, handling systems for biomass, sludge, recycling industry and natural gas, industrial cooling, flue gas condensation, treatment of flue gases and air systems for fuel cells.

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