OTI Greentech AG / Key word(s): Takeover
Publication of an insider information in accordance with Article 17 MAR
OTI Greentech AG signs agreement to take over 100 percent of the shares of KMI Cleaning Solutions, Inc.
Berlin, October 15, 2020 - OTI Greentech AG ('OTI', WKN A2TSL2) and the owners of KMI Cleaning Solutions, Inc. ('KMI') have now signed a detailed agreement ('Heads of Terms') concerning the take-over of KMI. With the signing of the Heads of Terms, OTI secures, as intended (cp. ad hoc of May 16, 2019 and ad hoc of September 18, 2020), the exclusivity for the acquisition of 100 percent of the shares in one of the largest suppliers of chemical cleaning products and equipment for the cleaning of tank trucks and tank wagons in the USA and Canada. The two companies have already cooperated very successfully in a joint venture for some time. According to the agreement, OTI will acquire KMI for US$6.39 million. The purchase price includes a cash component of US$2.62 million, to be paid in part through a preferential profit distribution of KMI's earnings to the KMI owners over the next three years. The remainder of the purchase price will be paid in OTI shares, whose valuation is significantly above the current share price: for the equivalent of US$1.99 million, a price of €1.00/OTI share has been fixed. The remaining payment will be made in OTI shares at a price of €1.50/OTI share and is partially contingent upon the achievement of certain profit targets ('KPIs'). The exact values and numbers of OTI shares will be determined by the US$/€ exchange rate on the date of registration of the capital increase through contributions in kind. It has been agreed to implement the merger as of 01.01.2021. After the implementation of the capital increase through contributions in kind, the owners of KMI will be significant shareholders of OTI
The acquisition will create a group that will offer leading technologies in both land-based and maritime cleaning environments. The consolidated revenues in the first year of full consolidation (2021) will be approximately €13.5 million (OTI 2019: €4.6 million) and the EBITDA is expected to exceed €1.0 million.
It is planned to run KMI, like the subsidiary UNIservice (Italy), as an independent venture. The key managers and founders of KMI will continue to hold leading positions at KMI and will be actively supported by John Kisalus, CEO of OTI. The existing joint venture between OTI and KMI will not be continued after the take-over of KMI. The joint venture activities will be fully continued instead by KMI.
The Executive Board of OTI expects to achieve a sustainable EBITDA return on sales of over 10% during the coming years. The current planning also envisages increasing the combined sales volume to approximately €20.0 million in the next three years.
Information and Explanation of the Issuer to this News:
In connection with the acquisition, OTI is considering changing its accounting standards to IFRS (from German GAAP). Final considerations will be made by the Executive Board and Supervisory Board in December 2020. The change in respect of the accounting standards is seen as a basis for a possible change in trading segment of OTI shares.
John C. Kisalus, CEO of OTI explains: We have now established a very solid foundation for a rapidly growing and profitable business by combining OTI's technical capabilities with KMI's strong market presence and customer service. I look forward to continuing the successful work with David and the entire KMI team even more intensely.
David L. Lafler adds: We have already enjoyed more than three years of successful cooperation with John Kisalus. With his expertise he was able to help us introduce new products into the market. I expect much more from the agreed even closer cooperation. With OTI, we are now able to develop further markets and areas.
Through the acquisition OTI expects to bring the former joint venture products - and new developments - to market much faster. At the same time, the already successful cooperation with UNIservice will be significantly strengthened and possible synergy effects - e.g. in the areas of logistics and manufacturing - will be leveraged on both sides of the Atlantic.
Contact: Greentech AG
15-Oct-2020 CET/CEST The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
OTI Greentech AG
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+49 30 690 884 88
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