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PRF: Acquisition of Oy Trio Trading Ab (Finland) and Notice on Convening Extraordinary General Meeting of PRFoods

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Tallinn, Estonia, 2017-08-01 07:00 CEST (GLOBE NEWSWIRE) --


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. 

ACQUISITION OF TRIO

Object and Structure of the Transaction

According to the Agreement, the Acquiring Company and the Sellers have agreed:

  -- The Sellers will transfer and the Acquiring Company will acquire 1450
     A-shares of Trio and 50 B-shares of Trio i.e. 100% of the registered 8000
     EUR share capital of Trio.
  -- As a result of the contemplated transaction, Trio shall become a 100%
     subsidiary of Saaremere Kala AS and part of AS PRFoods consolidation group.
  -- The main areas of activity of Trio is import of Nordic fish and shellfish,
     import and export of various seafood to customers and filleting of salmon.

Purpose of Transaction and Effect on Operations of AS PRFoods

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. 

Non-Related-Party Nature of Transaction; Management’s Interests

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. 

Conditions Precedent

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. 

Purchase Price and Payment Terms

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. 

Financial Results and Table of Annual Reports

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
                                FY 2014  FY 2015     FY 2016    
----------------------------------------------------------------
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. 

Overview of Loans by Trio

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   Outstanding amount EUR as     Term      Margin + Base 
                  EUR         at 30 June 2017                       Rate (BR)   
--------------------------------------------------------------------------------
Kokkolan         1 600            1 210 000          31.08.2022   2%+12m euribor
 Osuuspankki      000                                                           
--------------------------------------------------------------------------------

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. 

Shareholders’ Structure

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. 

Significant Court and Arbitration Proceedings

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. 

Agreements between AS PRFoods group companies and Trio

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. 

Board of Directors

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.

After the contemplated transaction:

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. 



NOTICE ON CONVENING EXTRAORDINARY GENERAL MEETING OF AS PRFOODS

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:

  -- in the case of a natural person shareholder, a passport or ID-card.
     Representative of the shareholder must also submit a written power of
     attorney;
  -- in the case of a legal entity shareholder, an extract from the respective
     register where the legal entity is registered evidencing the authorities of
     the legal entity’s representative to represent the legal entity
     (representation by virtue of law); and a passport or ID-card of the
     representative. If the legal entity is represented by a person who is not
     the legal representative of the legal entity, a written power of attorney
     is also required. The documents of a shareholder located abroad shall be
     legalized or certified with an apostille, unless a relevant international
     agreement stipulates otherwise. AS PRFoods may register a shareholder who
     is a legal person of a foreign country as a participant in the general
     meeting also in case all required data on the legal person and the
     representative are included in the notarised authorisation document issued
     to the representative in a foreign country and the authorisation document
     is acceptable in Estonia.

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 [email protected] 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: 

1. Approval of acquisition of Oy Trio Trading Ab

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 [email protected]. 

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 Extraordinary General Meeting of the Shareholders of AS PRFoods will be
broadcasted and additional questions will be answered during the broadcast via
web solution 

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 [email protected] or ask questions during the broadcast
via web solution. 

To join the broadcast, please register by 23 August 2017 by 23.59 via email
[email protected]. 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 the Management Board
Phone: +372 452 1470
[email protected]
www.prfoods.ee