Reference is made to the stock exchange announcement dated 30 March 2023. Inin Group AS has today signed the final share purchase agreement for the acquisition of leading mass handling, recycling and transportation company TW Gruppen AS. With this acquisition, Inin Group will establish Mass Handling & Recycling as its fourth investment platform.
“We are delighted to sign the final SPA for the acquisition of TW Gruppen, which has the building blocks in place to realise a fantastic growth potential. TW Gruppen will head up our newest and fourth investment platform, Mass Handling & Recycling, which is designed to take a leading position within environmentally friendly mass handling, transport and recycling,” says Øivind Horpestad, CEO of Inin Group.
TW Gruppen consists of three companies that ensure a complete delivery across the entire value chain for mass handling and recycling, including reception point for polluted masses; cleaning and recycling of polluted masses at a modern facility at Disenå outside Oslo; and transportation of both polluted and recycled masses to and from the Disenå site.
The mass recycling cite at Disenå is one of only two in Eastern Norway, and will become fully operational in 2023. The facility is capable of recycling and reusing approximately 80 percent of the excavated materials it receives. It has a license to recycle 350,000 tons per year.
Revenues throughout the value chain
TW Gruppen generates revenue from the entire mass handling and recycling value chain. The company gets paid for receiving polluted masses and is paid for transporting polluted masses from reception points to the Disenå recycling facility, and also handles transportation of the masses from and to specific construction sites.
“Recycling and reuse of materials such as sand, gravel, clay, cement and stone are highly efficient ways for developers to significantly lower the environmental footprint of their construction projects. We consider this to be an excellent business opportunity, which also is good for the environment and backed by increased regulatory support for reuse of masses,” adds Øivind Horpestad.
TW Gruppen expects revenues of close to NOK 200 million and an EBIT of approximately NOK 20 million in 2023, and expects to achieve a substantial growth from this level going forward.
“This acquisition is also a good example of how we carefully select attractive positions within infrastructure and industry services verticals, supported by megatrends such as positive ESG drivers, regulatory support and underlying changes in the business climate and sentiment,” adds Horpestad.
The transaction
Inin Group will acquire 70 percent of the shares in TW Gruppen. Inin Group has an option to acquire the remaining 30 percent of the shares in TW Gruppen, and a right of first refusal with regards to TWI Eiendom AS, the company which owns the land and the facility at Disenå. Acquisition of 51% of TWI Eiendom is no longer part of the transaction. As part of the transaction a new land lease agreement for 10+10+10 years will be entered into. Furthermore, the acquisition multiple has been reduced from 6.0x EBIT to 5.5x EBIT, and the initial payment in 2023 has also been reduced.
The initial consideration will be settled through NOK 16 million in Inin Group shares valued at NOK 2.80 per share and NOK 8 million in cash at closing. Another NOK 4 million in cash will be paid in October 2023. Further, the complete payment and valuation include an earn-out model based on 5.5x average EBIT in TW Gruppen AS for three 12-month periods starting in August 2023, with annual settlements to be settled 60 percent in cash and 40 percent in Inin Group shares at the market price at the relevant time. Closing of the transaction is expected during Q3 2023.
The share-based part of the total consideration will be settled partly in treasury shares already held by Inin Group, bought in the market through the previously announced buyback program, and partly through issuance of new shares in Inin Group in accordance with the authorization granted at the company’s annual general meeting on 12 June 2023.
