Unimot Group invests in rail transport logistics and sets forth the terms and conditions of the purchase of shares of the company Olavion

Date of publication: 14.11.22

Unimot Group, a multi-energy group of companies and a leader among independent importers of fuels within Poland, is currently expanding its logistics facilities and sets forth the terms and conditions of the purchase of 100 % shares of the company Olavion, a company involved in rail transportation services. The key terms and conditions of the transaction are set out in the “Term Sheet”, which was signed on 14^th November 2022 by Unimot S.A. and the Olavion’s majority shareholders. Unimot aims at concluding a preliminary conditional agreement for the sale of shares during the exclusive negotiations period ending up on 9^th December 2022 and signing the final agreement upon the fulfilment of the conditions precedent.

Olavion, which the Unimot Group is going to acquire, provides services in the field of rail transportation in Poland under the relevant licence, as well as freight forwarding services nationally and abroad. The Company has a well-qualified drivers and dispatchers. In addition, Olavion maintains long-term business relationships and has multi-annual agreements concluded, which allow for providing freight and shipping services to its customers. Olavion has 15 locomotives and 64 employees, including 40 drivers. Within the three quarters of 2022, Olavion transported 750,000 tonnes of goods. It is worth noting that the Company may transport approximately 1.5 million tonnes of goods annually.

Due to the highly dynamic market situation, we have decided to put our great effort into investments in logistics. As a result, this year, we concluded agreements for the purchase of rail tankers. We have also decided to acquire Olavion, which holds the relevant licences and has well-qualified staff, as well as locomotives and the required know-how. The aim of the aforesaid transaction is to complement our value chain and competences within the logistics and transport area. Our goal is to become an integrated group that provides our customers with certain products and ensures the entire logistics process. This is especially important taking into consideration our previous experience in planning deliveries and transport and storage logistics, as well as the upcoming acquisition of shares owned by Lotos Terminale, which includes nine (9) fuel terminals and two (2) bitumen plants.” says Adam Sikorski, President of the Management Board of Unimot S.A.

In accordance with the “Term Sheet”, the parties thereto shall conclude a preliminary conditional agreement for the sale of shares following negotiations in this regard. The Parties shall conclude a final agreement upon the fulfilment of the conditions precedent. The negotiations are deemed to be successful and the agreements are considered to be concluded when seven persons, i.e., the Olavion’s minority shareholders, who are members of Olavion’s key management staff, enter into the transaction under specified terms and conditions.

The transaction is deemed to be completed upon the fulfilment of conditions precedent, i.e., inter alia, the receipt of approval issued by the President of the Office of Competition and Consumer Protection (UOKiK), the receipt of corporate approvals from Unimot S.A., and the non-occurrence, within the period until the date of conclusion of the final agreement, of share-related events or circumstances resulting in changes in the Olavion’s economic and financial situation, which are listed in the transaction documents in more detail.

In the “Term Sheet”, the parties agreed on a mechanism for determining the price for the acquisition of 90 % of the shares from the majority shareholders of Olavion, which will be adjusted for net debt and difference in working capital at the transaction closing date. In addition, the parties set forth the terms and conditions of a possible increase in the base price as part of the earn-out by paying out a share of the profit earned on an average annual basis between 2023 and 2024, upon the approval of the financial statements for 2024.

In relation to 10 % of shares owned by the management staff, these shares are to be acquired upon the approval of the financial statements for 2024, and the price will be determined on the basis of profit share for 2023-2024 set forth in the agreement. The ability to buy back the shares from management staff will be secured by an option to require Unimot S.A. to buy back the shares for a determined price by management staff, as well as an option to require Unimot S.A. to dispose of 10 % of the shares.

The estimated value of the transaction, taking into consideration the agreed mechanisms for determining the price for the acquisition of 100 % of shares owned by Olavion, will be specified at the transaction date.