NKT Holding and Subsea 7 Completes Review for Development of NKT Flexibles

Further to the announcement dated September 20, 2011, the Boards of NKT Holding A/S and Subsea 7 S.A. have completed their review of strategic alternatives for the future development of NKT Flexibles which has been operated as a joint venture between NKT Holding A/S (51%) and Subsea 7 S.A. (49%) since 1999.

Since the announcement of the strategic review in September 2011, NKT Holding A/S and Subsea 7 S.A. have conducted a competitive process which has involved both strategic and financial buyers. On the basis of this competitive process NKT Holding A/S and Subsea 7 S.A. have today entered into an agreement to sell NKT Flexibles to National Oilwell Varco (NOV) for a total consideration of DKK 3.8 billion. The transaction is subject to customary closing conditions, including approval from the relevant competition authorities, and is expected to close during the first half of 2012.

NKT Holding A/S and Subsea 7 S.A. are convinced that NOV will be an excellent new owner of NKT Flexibles in its further development, as NOV has significant global experience and reach within complementary products and solutions to the offshore sector.

Revenue for NKT Flexibles in 2011 was DKK 1.5 billion, with a pro forma EBITDA of DKK 301 million after adjustment of price regulations recognised as income related to prior years. As of December 31, 2011 the book value of equity in the Company amounted to DKK 1.4 billion.

Subsea 7 S.A. expects its share of the contribution from the Company for fiscal year 2011 to be approximately $29 million. The transaction will lead to a gain on disposal which is expected to be recognised in fiscal year 2012.

The Board of Directors of NKT Holding A/S and Subsea 7 S.A. are of the opinion that the purchase price reflects NKT Flexibles’ strong strategic platform, attractive growth prospects as well as the investments required for the Company’s ongoing establishment of production in Brazil.

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Offshore Nieuws Staff , February 3, 2012; Image: NKT Flexibles