JUNE 11, 2013 — Norway's largest private equity firm is putting Umoe Schat-Harding AS and Noreq AS together to create what it says will be the world's leading supplier of maritime life-saving equipment

Yesterday, Herkules signed an agreement to acquire Umoe Schat-Harding AS. The acquisition is being carried out in cooperation with the owners of Noreq AS, who, in parallel, are selling Noreq to Herkules and reinvesting a substantial amount in a new, joint holding company. The transactions are expected to be finalised the first half of July. The intention with the acquisition is to build on Schat-Harding's and Noreq's strong market positions in the new combined company. For 2013 the companies expect total revenues of approximately NOK 1.2 billion.

"Schat-Harding and Noreq complement each other in an excellent manner. By combining the expertise and ability to deliver of both companies, our customers will be able to rely on us even more in terms of equipment deliveries, good service and costs," says Styrk Bekkenes, Managing Director of Noreq and the second largest investor in the new joint company after Herkules.

Herkules says the global market for life-saving equipment is "very fragmented" with "a clear need for bigger and more robust players, a development that the combination of Schat-Harding and Noreq will contribute to."

Schat-Harding has long been a leading international player, it has a unique position in the North Sea offshore market, and it has the world's biggest service network for life-saving equipment. In the space of a few years, Noreq has developed into a significant player with a strong international presence. Both companies have been quick to introduce products and solutions that satisfy new, more stringent safety requirements in the offshore sector. Herkules Private Equity Fund III will be the principal owner of the new company.

New regulations for offshore lifeboats on the Norwegian Continental Shelf are expected to enter into force from 2015.

"The new regulations for lifeboats on the Norwegian Continental Shelf will be an important growth driver for Schat-Harding as market leader. At the same time, Schat-Harding and Noreq combined will be able to lead the market internationally in relation to the offshore, cruise and merchant fleet segments. As the leading private equity fund in Norway, we are in an excellent position to create a global market leader with a basis in Norway," says Morten Blix, Senior Partner of Herkules.

Schat-Harding's service network is seen as also being an important competitive advantage for the company's equipment deliveries. As a result of the combination with Noreq, Schat-Harding will be the chosen service partner for Noreq's 4,200 units installed worldwide.

"We see considerable opportunities for growth through additional acquisitions and organic growth. Herkules' access to capital and its expertise in developing companies will be an important contributor to realizing the market potential in the years ahead," says Birger Gråthen, Managing Director of Umoe Schat-Harding Services.

Both Schat-Harding and Noreq have a record of innovation. Schat-Hardings 's lifeboat type FF 1200 is the first in the world to have completed a full-scale test pursuant to the new requirements for free-fall lifeboats on the Norwegian Continental Shelf. The FF 1200 also holds the record for the world's highest free fall – 65.1 m.

Noreq has enjoyed great international success in recent years with its new series of enclosed lifeboat davits in which all the critical components of the davits are protected inside the davit structure – protected from demanding weather conditions and wear and tear. The new davits are innovative and result in substantial cost reductions in connection with installation and maintenance.

"'Innovation will continue to have high priority for the new company. At the same time, however, we will have strong focus on our solutions being the most favorable in terms of price – for both existing customers of Schat-Harding and Noreq, and, not least, for new customers," says Styrk Bekkenes.

"I have been the owner of Umoe Schat-Harding for 26 years, and while the company has experienced some demanding years, the employees and management have successfully turned the company, so that it is now positioned for profitable growth. The year 2012 was the best in the company's history. Now is the right time to bring in new owners with competence and capital. I am convinced that the combination with Noreq will strengthen both companies and that Herkules will be an excellent owner that contributes to continued rapid growth and development from a Norwegian base," says Jens Ulltveit-Moe, President and CEO, and majority owner of the Umoe Group.