TTS Letter of intent regarding purchase of company
TTS Marine ASA has entered into a letter of intent regarding acquisition of Kocks GmbH in Bremen, Germany, at a price of EUR 6,5m. The company delivers deck machinery to the maritime industry. At takeover the company’s order backlog was EUR 44m. Expected turnover in 2005 is EUR 29m.
Under the terms of the Letter of Intent, TTS Marine ASA shall conduct a due diligence review of the company and finalize all necessary contractual negotiations in September. Provided that this review is successful, Kocks GmbH will be acquired effective of 1 October this year, and the purchase price of EUR 6,5m will be financed through equity and debt.
With TTS Ships Equipment GmbH, Bremen and TTS-LMG Marine Cranes GmbH, Lübeck, and TTS Kocks GmbH, TTS will be a leading supplier of ships equipment in Germany, a market that is very important to ship owners and yards. TTS will be able to achieve considerable synergy effects regarding operations and markets, especially in China where Kocks GmbH is not presented today.
Kocks GmbH has 34 employees, with expertise within engineering, service and sales. The company’s product range is complementary to TTS’s and the company has considerable deliveries to German ship owners, who are big on contracting ships from Korean as well as Chinese shipyards.
Kocks was established in 1952 and offers both engineering and production of winches and other equipment at the company’s workshop in Bremen. Since 1998 the company has a 100% owned subsidiary in the Czech Republic for production and assembling deck machinery.
After a bankruptcy in 2004, the assets of the company were sold and a new company Kocks GmbH was established. During the last year the company has winded up production and assembling in Bremen, and established a joint venture company in Korea for assembling and production. Hence the company has established a structure focused on engineering, service and sales in Bremen, with low cost production for European markets in Czech Republic, and for Asian markets in Korea.
Operations the last 12 months with a turnover of EUR 25m and considerable costs related to structural changes created a loss, but are not expected to be representative for the future. A turnover of EUR 29M is expected for 2005, increasing to EUR 34m for 2006.
