SBB and Solon Eiendom join forces
Samhällsbyggnadsbolaget i Norden AB («SBB») and Solon Eiendom ASA («Solon» and jointly with SBB the «Parties») have entered into a term sheet governing a series of transactions resulting in Solon acquiring SBB's real estate portfolio in Kristiansand, the Parties establishing a joint venture to export Solon's successful business model to Stockholm, and SBB becoming Solon's largest shareholder. Solon and the new joint venture in Sweden will continue to build premium homes, with particular focus on quality, location and architecture for discerning customers. A summary of the main aspects of the contemplated transactions is set out below. • SBB will, through several planned transactions as further described below, become the largest shareholder in Solon and have one representative on Solon's board. • Solon will acquire and develop SBB's real estate portfolio in Kristiansand. The portfolio includes two commercial properties with existing cash flow, and both sites are in the process of obtaining new zoning to residential purposes. The acquisition will be financed through a combination of issuance of 7,416,230 consideration shares to SBB at NOK 43 per share and deferred payment to SBB when final price is decided after final zooning plan is approved. The Board will issue the shares based on existing board authorization to increase the share capital. The real estate portfolio in Kristiansand is a good match with Solon's present operations in Kristiansand. • Following the above acquisition, SBB will launch an offer to all Solon shareholders to acquire 5,000,000 shares in Solon at a price of NOK 40 per shares. Shareholders representing a total of approx. 75 % of the shares in Solon, controlled by board members Simen Thorsen, Runar Vatne, Tore Aksel Voldberg and Øystein Landvik (jointly the "Major Shareholders") have accepted to sell their pro rata share, including any shortfall not tendered by other shareholders. • As a result of the above transactions SBB will become an approx. 15 % shareholder in Solon, with an ambition to shortly increase this to approximately 20%. • The Parties will establish a 50:50 joint venture which shall acquire from SBB a real estate portfolio consisting of residential development rights in the Stockholm area. The Swedish portfolio includes 11 development projects, with a targeted development potential of up to 1,000 residential units and 70,000 square meters saleable area. Solon's capital contribution to the joint venture will be financed through deferred payment to SBB. • Subsequently, Solon will seek a secondary listing in Sweden at Nasdaq First North Growth Market during 2021 in order to further strengthen its shareholder base and to improve access to equity capital markets. • Solon expects to carry out a capital increase through issuance of shares in the Swedish market. • The Majority Shareholders plan to reduce their relative shareholding further to approximately half of today's holding following the transactions in Sweden. Commenting on the new cooperation between Solon and SBBs, Solon's CEO Andreas Martinussen said: «Solon has a strong management and owns one of the best residential development pipelines in Norway, and Solon is ready and well positioned to expand its platform even further. Following a comprehensive strategic review, I am thrilled that Solon has concluded with what I see as the best possible outcome: A partnership with a market leader in the Swedish real estate market, enabling Solon to continue its growth and development. SBB and Solon share a mutual vision of strengthening the Solon platform in Norway and to develop Solon to one of the leading developers of residential property in Stockholm. The dialogue between Solon and SBB has been constructive, and Ilija Batljan has made a very solid impression. We truly look forward to welcome him and SBB as our new main shareholder.» The new cooperation between Solon and SBB also implies that Solon will make certain corporate changes. As a first step, the Majority Shareholders will reduce their presence in the Board to include Simen Thorsen and SBB will propose that Jan-Erik Höjvall is elected to the Board. Ilija Batljan, CEO and founder of SBB commented that: "We are impressed with Solon's journey in Norway, where they have succeeded in combining good profitability with creating attractive projects that add qualities to the cities. As the Nordic region's largest property developer, we see great potential for value creation for both SBB and Solon's shareholders. SBB's property development expertise combined with Solon's ability to create attractive projects will add value in both Norway and Sweden. " The contemplated transactions are subject to execution of final and binding transaction agreements and customary closing conditions. The final purchase price for both real estate acquisitions in Stockholm and in Kristiansand are subject to the relevant authorities' final approval of development potential. The Parties expect that final transaction agreements will be entered into during June, and that all transactions, including the parallel listing on Nasdaq First North Growth market Sweden, will be completed before year-end. ABG Sundal Collier and the law firm Schjødt are acting as Solon's financial and legal advisors in the process, respectively. Arctic Securities acts as SBB's financial advisor, while the law firms Thommessen and Wistrand acts as SBB's legal advisors in Norway and Sweden, respectively. For more information, please contact: Andreas Martinussen, Chief Executive Officer Phone: +47 400 00 405, e-mail: am@soloneiendom.no. This announcement contains information which is considered to be inside information pursuant to the EU Market Abuse Regulation, and which is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. The stock exchange announcement was published by Solon Eiendom ASA at 07.25 CEST on 20 May 2021.
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