On 31 July in 2017, Saaremere Kala AS (the Acquiring Company), a company 100% owned by AS PRFoods (PRF), and Ville Sammallahti, Mats Storbjörk and Heikki Sammallahti (each separately the Seller and all together the Sellers) executed share purchase agreements (the Agreement) under which the Acquiring Company acquires from the Sellers 100% shareholding in Oy Trio Trading Ab (Trio), located in Kokkola, Finland. Trio is Finland’s leading importer of Nordic fish and shellfish, its operations also include export of seafood and filleting of salmon. The Agreement is conditional and subject to the approval of the General Meeting of shareholders of AS PRFoods.
The Management Board of AS PRFoods hereby discloses, in consideration of provisions 7.11 and 7.13.4 of Nasdaq Tallinn Rules ‘Requirements for Issuers’, the terms and conditions of the contemplated transaction and convenes the Extraordinary General Meeting of Shareholders of AS PRFoods.
According to the Agreement, the Acquiring Company and the Sellers have agreed:
The purpose of the transaction is to acquire the entire shareholding in Trio, hence all the business operations of Trio. A successful closing of the transaction will increase the assortment of fish products offered by PRF group companies and raise the professional know-how and clientele.
The unaudited turnover of Trio for the period of 1.1.2016-31.12.2016 was 51.4 million EUR. The unaudited turnover of Trio for the period 1.1.2016- 30.06.2017 was 81.6 million EUR.
Trio’s financial year of 2016 lasted from 1.1.2016-30.06.2017.
Further information on financials are presented below under Financial Results and Table of Annual Reports.
The audited consolidated turnover of AS PRFoods for 2016FY was 47.4 million EUR, the unaudited consolidated turnover for the 1Q 2017 of AS PRFoods was 10.6 million EUR and the unaudited consolidated turnover for 6m 2017 was 23.6 million EUR.
Therefore, the turnover of Trio exceeds 25% of the turnover of PRF, meaning that the contemplated transaction has significant importance within the meaning of Nasdaq Tallinn Stock Exchange Rules (Requirements for Issuers) and must be submitted for approval to the General Meeting of AS PRFoods.
The Acquiring Company will pay to the Sellers for the entire shareholding of Trio the purchase price of 3,030,000 EUR. The purchase price may increase under certain conditions. The purchase price, payment terms and financing of the contemplated transaction is further described below under Purchase Price and Payment Terms.
The contemplated transaction is not a related party transaction in the essence of the Rules of the NASDAQ Tallinn Stock Exchange. The owners of Trio are all the Sellers. The members of board of directors of Trio prior to the completion of the contemplated transaction are Mats Storbjörk (chairman), Ville Sammallahti (ordinary member and managing director) and Heikki Sammallahti (substitute member). The Sellers have no connections to the majority shareholders of PRF, the board members (or their relatives) of PRF or its subsidiaries or affiliates. The transaction shall bring along changes in the management level of Trio. An overview of planned changes in the board of directors of Trio is given below under Board of Directors.
The current members of the Management and Supervisory Board of AS PRFoods and Saaremere Kala AS have no personal interests related to the contemplated transaction.
The contemplated transaction is of significant importance within the meaning of Nasdaq Tallinn Rules (Requirements for Issuers) and the Supervisory Board of PRFoods submits the approval of the transaction to be resolved by the Extraordinary General Meeting of PRFoods. Due to the above, the Management Board of AS PRFoods convenes an Extraordinary General Meeting of shareholders (please see the respective notice below).
Obtaining the approval of the Extraordinary General Meeting of shareholders of AS PRFoods is set as condition precedent to the completion of the contemplated transaction by the Agreement.
The purchase price payable for the object of the contemplated transaction as described above is 3,030,000 EUR. As per the Agreement, the purchase price is payable to the Sellers in cash consideration in one tranche upon the completion of the contemplated transaction, i.e. upon the transfer of ownership of 1450 A-shares and 50 B-shares in Trio to the Acquiring Company, subject to fulfilment of the condition precedent (EGM approval).
The Sellers Ville Sammallahti and Mats Storbjörk are entitled to additional annual purchase price. The additional purchase price is at maximum 3% (1.5% to both of them) from EBITDA amount (excluding fish farming and entities added to PRF group after Trio transaction) as stated in the consolidated audited PRF annual report approved by shareholders provided the EBITDA exceeds 6 million EUR. The annual additional purchase price is payable for five financial years following the completion of Trio transaction, i.e. commencing from financial year starting 1.1.2018. These Sellers have the right to receive the additional purchase price only if their employment relationship is in force during the financial year in consideration, subject to customary exceptions relating to good leaver. . The said additional purchase price is payable in 2 tranches: 75% is paid within 14 working days from the date on which the general meeting of PRF confirms the consolidated report for the year for which the annual additional purchase price is potentially accounted for and 25% is paid by the end of the first quarter of the financial year following the financial year when the annual additional purchase price is calculated.
The Sellers Ville Sammallahti and Mats Storbjörk are entitled to additional exit purchase price in case PRF, the Acquiring Company or a business unit of PRF is sold to a new shareholder (exit). In case the equity value of PRF (incl. Saaremere Kala) as published by Nasdaq OMX (or the equity value at exit in case PRF is delisted before the exit) is at least 45 million EUR, the additional exit purchase price payable to the Sellers is 1.5% of the said equity value. If the equity value is less than 45 million EUR but more than 35 million EUR, the additional exit purchase price payable to the Sellers is 0.5% of such equity value on condition that the said equity value at exit is higher than the equity value upon completion of Trio transaction. Additional exit purchase price is divided between the Sellers equally (respectively 0.75% or 0.25% to both of them) and is paid out within 14 working days after the exit has fully been completed. The Sellers are entitled to additional exit purchase price only if they have valid employment relationship with PRF at the time of exit. In case the exit occurs during the 5 years for which the Sellers are entitled to annual additional purchase price, the right for such annual additional purchase price terminates immediately (incl. calculated but outstanding payments).
PRF plans to finance the payment of purchase price with own funds and with a loan of up to 2.5 million EUR which is applied from SEB Pank.
According to the Rules of NASDAQ Tallinn Stock Exchange (Requirements for Issuers), an issuer must publish the financial results of the acquired company for the three preceding financial years together with the last two annual reports presented in a table format.
Financial results for the three preceding financial years:
|
€'000 |
Audited |
Audited |
Unaudited, 18m |
|
Turnover |
30,015 |
37,825 |
81,641 |
|
Net profit |
-154 |
117 |
391 |
|
|
|
|
|
|
EBITDA |
631 |
694 |
1,203 |
|
|
|
|
|
|
Net earnings per share |
0.00 |
0.00 |
0.01 |
|
Net earnings per diluted share |
0.00 |
0.00 |
0.01 |
The annual reports of Trio for the past two financial years in a table format is enclosed as attachment.
There have been no significant changes within Trio since the last financial year ended.
The audited consolidated financial reports of PRFoods are available on the web page of AS PRFoods www.prfoods.ee.
According to the Rules of NASDAQ Tallinn Stock Exchange (Requirements for Issuers), an issuer must publish information of the loans taken by Trio.
Trio has concluded one loan agreement:
|
Lender |
Amount EUR |
Outstanding amount EUR as at 30 June 2017 |
Term |
Margin + Base Rate (BR) |
|
Kokkolan Osuuspankki |
1 600 000 |
1 210 000 |
31.08.2022 |
2%+12m euribor |
The securities for the loan are the floating charges and security rights to leaseholds in Kokkola.
Trio also has factoring agreement with Nordea Rahoitus Suomi Oy with the maximum limit of 6 million EUR.
The shareholders of Trio prior to the contemplated transaction are the Sellers: Ville Sammallahti with 500 A-shares (ca. 34.48%), Mats Storbjörk with 450 A-shares (ca. 31.03%) and 50 B-shares (100%) and Heikki Sammallahti with 500 A-shares (ca. 34.48%).
After the completion of the contemplated transaction, all shares of Trio shall belong to the Acquiring Company.
Trio is not involved in any ongoing court or arbitration proceedings, which could have material effect on its operations or the operations of the Acquiring Company or PRF.
PRF group companies and Trio are in a commercial relationship.
In 2016, Heimon Kala Oy and Vettel OÜ (as buyers), both companies belonging to PRF consolidation group, made purchases (fish) from Trio (as seller) in the total amount of 15.9 million EUR.
In 2016, Heimon Kala Oy (as seller) sold products (fish) to Trio (as buyer) in the total amount of 5.7 million EUR.
Prior to the contemplated transaction:
The members of the board of directors of Trio were Mats Storbjörk (chairman), Ville Sammallahti (ordinary member and managing director) and Heikki Sammallahti (substitute member).
Trio does not have a supervisory board.
The members of the board of directors of Trio after the contemplated transaction shall be Indrek Kasela, Mats Storbjörk and Ville Sammallahti.
No supervisory board shall be formed to Trio.
Mats Storbjörk was born 4 March 1965. Mats Storbjörk will continue in the board of directors and shall be responsible for purchase operations. Mats Storbjörk has Master of Science degree in economics from Svenska Handelshögskolan.
Ville Sammallahti was born 19 February 1980. Having served as CEO of Trion since 2007, he shall continue to do so.
Neither Mats Storbjörk nor Ville Sammallahti own any PRF shares.
The spokespersons related to the transaction are Indrek Kasela and Ville Sammallahti.
AS PRFoods (register code 11560713, address Pärnu rd. 141, 11314 Tallinn, Estonia), hereby convenes the Extraordinary General Meeting of shareholders, which will be held on 28 August in 2017 starting at 11am in the conference room “Arcturus” at the Nordic Hotel Forum hotel (address: Viru väljak 3, Tallinn, Estonia). The initiator of convening the extraordinary general meeting is the Supervisory Board of AS PRFoods and the reason is to obtain the approval of the General Meeting of AS PRFoods to acquire the entire shareholding in Trio, which is set as condition precedent to the completion of the mentioned contemplated transaction.
The list of shareholders being entitled to vote at the Extraordinary General Meeting will be determined seven days before the meeting, i.e. on 21 August in 2017 at 23.59.
As at the disclosure of this notice the share capital of AS PRFoods is 7 736 572 euros divided into 38 682 860 shares, all of the same class and without nominal value. Each share entitles to one vote at the general meeting.
The registration of the participants of the Extraordinary General Meeting begins on the day of the meeting e.g. 28.08.2017 at 10am and ends at 11am at the venue of the meeting.
For registration, please submit:
Prior to the Extraordinary General Meeting, a shareholder may notify AS PRFoods of appointing a representative or revoking authorisation to represent the shareholder by sending a respective digitally signed notice to the e-mail address investor@prfoods.ee or by personally delivering the written notice during business days from 10am until 4pm to the address Pärnu rd 141, 11314 Tallinn, Estonia, by 4pm on 23 August 2017 at the latest. The shareholder may use the respective forms of power of attorney and revocation of the power of attorney available at the website of AS PRFoods www.prfoods.ee.
In accordance with the resolution of the Supervisory Board of AS PRFoods, dated 28 July 2017, the agenda of the Extraordinary General Meeting along with the proposals of the Supervisory Board to the shareholders is as follows:
The Supervisory Board of PRFoods proposes to the shareholders to vote in favour to the approval of the acquisition of the entire shareholding in Oy Trio Trading Ab in accordance with the terms and conditions of the contemplated transaction as made available to the shareholders at the website of Nasdaq Tallinn and at the web site of AS PRFoods www.prfoods.ee simultaneously with convening the extraordinary general meeting of shareholders, and as presented to the shareholders in the course of the extraordinary general meeting of shareholders.
Inquiries on items of the agenda of the Extraordinary General Meeting of shareholders can be sent to the e-mail address investor@prfoods.ee.
A shareholder has a right to receive information on the activities of AS PRFoods from the Management Board at the General Meeting. The Management Board may refuse to disclose the information if there are sufficient grounds to presume that the disclosure may adversely affect the interests of the company. If the Management Board refuses to disclose the information, the shareholder may claim that the General Meeting decides on the lawfulness of the shareholder's request or file within two weeks a petition to a court by way of proceedings on petition to oblige the Management Board to disclose the information.
Shareholders, whose shares represent at least 1/20 of the share capital of AS PRFoods, may request additional items to be added on the agenda of the Extraordinary General Meeting if a respective request has been submitted at least 15 days prior to the Extraordinary General Meeting, i.e. before 14 August 2017 the latest to the following address: AS PRFoods, Pärnu rd. 141, 11314 Tallinn, Estonia. Concurrently with the demand to complement the agenda, a draft resolution on or substantiation of each additional issue shall be submitted to the company.
Shareholders, whose shares represent at least 1/20 of the share capital of AS PRFoods, may propose draft resolutions with respect to each item on the agenda at least 3 days prior to the Extraordinary General Meeting, i.e. before 25 August 2017 by submitting the proposal in writing to the following address: AS PRFoods, Pärnu rd. 141, 11314 Tallinn, Estonia.
The live broadcast will be hosted by the Member of the Board Indrek Kasela, who will share information in regards to agenda of the general meeting. Shareholders may send their questions before the broadcast until 23 August 2017 by 23.59 by email to hannele@voting.ee or ask questions during the broadcast via web solution.
To join the broadcast, please register by 23 August 2017 by 23.59 via email hannele@voting.ee. The list of shareholders entitled to monitor the meeting via live broadcast and ask questions will be fixed on 21 August 2017 at 23:59. After registration you will be provided with instructions how to join the broadcast and ask questions during the meeting. Exercising shareholder´s rights (i.e. voting) is not possible via live broadcast. The broadcast of the shareholders meeting will be recorded and will be available online for everyone at the company’s website on www.prfoods.ee.
Indrek Kasela
AS PRFoods
Member of Management Board