Procuritas Capital Partners and associates make cash offer for BPA

I accept the conditions below.

WARNING!

This document may not be circulated, published or distributed in the U.S., Canada, Australia or Japan. The Offer is not aimed at persons whose participation requires additional prospectuses, registration or other measures than those that comply with Swedish law.

Summary

Procuritas Capital Partners II (“PCP II”) – a venture capital fund made up of Swedish and international investors, investors associated with the fund and Peab AB, are making – via the jointly owned company Investeringssällskapet 1999 AB, “Investeringssällskapet” – a public cash offer, “The Offer” to holders of shares and warrants issued by BPA AB. SEK 30.50 in cash is offered for each Series A share. SEK 28 in cash is offered for each Series B share. SEK 13.60 in cash is offered for each warrant issued by BPA. The Offer entails a premium of 31% for both Series A and Series B shares compared with the average closing price for each type of share during the period March 8, 1999 – April 23, 1999, the last 30 trading days before trading in the BPA share was suspended by the Stockholm Stock Exchange on Monday April 26, 1999. Compared with the closing price on Friday April 23, 1999, the bid premium is 27% for both Series A and Series B shares.  The terms for the warrants issued by BPA mean that for each warrant, the holder may currently subscribe for one Series B share in BPA at a price of SEK 14.40. The offer of SEK 13.60 for each warrant thus entails a total value of SEK 28 per share. Investeringssällskapet has acquired all shares and warrants held by Trelleborg AB and Peab AB in BPA, corresponding to 47.3% of the capital and 63.4% of the voting rights in BPA after full dilution.

Investeringssällskapet has also reached agreement with Investment AB Latour and investors associated with Latour concerning the acquisition of these parties’ shares and warrants in BPA, corresponding to 5.1% of the capital and 5.4% of the voting rights in BPA after full dilution, and that Latour become shareholder of Investeringssällskapet.

Thus, Investeringssällskapet now owns/controls 52.4% of the capital and 68.8% of the voting rights in BPA after full dilution.

NCC AB which owns shares and warrants in BPA corresponding to 6.5% of the capital and 6.2% of the voting rights in BPA after full dilution has expressed a positive view regarding the offer. PCP II and associated investors currently hold no shares or warrants in BPA. PCP II, along with associated investors, will own more than 50% of the shares in Investeringssällskapet. BPA is Scandinavia’s leading installation company with operations in approximately 120 locations. As the only company in Sweden BPA can offer total co-ordinated installations in the areas of plumbing (VVS), electricity and ventilation. The company is also operating a rapidly expanding service business towards the real estate and industry sector. BPA regards Scandinavia as its home market and is well positioned in Denmark as well as in Norway. In 1998, invoiced sales of the BPA Group amounted to about SEK 6,120 M and the number of employees amounted to approximately 6,300. BPA also owns about 48% of the share capital in the real estate company Oskarsborg AB, which has investment properties with a book value of about SEK 4,900 M. “We at Procuritas have monitored the development of the installation market and BPA over a protracted period. We believe that the BPA Group offers long-term potential and high profitability through participation in the ongoing restructuring of the industry and through acquisitions, combined with the phase-out of the BPA Group’s considerable exposure to the real estate sector through its holding in Oskarsborg. In the short-term, the implementation of this strategy may have a negative impact on the profitability of the BPA Group. The phase-out of BPA’s interest in Oskarsborg is likely to lead to a certain write-down requirement. Together with the other shareholders in Investeringssällskapet, and in close cooperation with BPA’s executive management, we will develop the long-term potential of BPA’s core business in the manner appropriate to the industry,” says Mikael Ahlström, Chairman of Procuritas Partners KB, advisor to PCP II. “The installation market in Scandinavia is undergoing wide-ranging restructuring. BPA has all the prerequisites to participate actively in and lead the continuing process of change in the industry and realize the long-term growth potential offered by the BPA Group. In the short-term, substantial growth through acquisitions and continuing restructuring measures may impact negatively on BPA’s profitability. We at Peab, are seeking to focus on core business, meaning building and contracting operations. Accordingly, we intend to reduce our ownership interest in BPA, which is why we are divesting our shares and warrants to Investeringssällskapet. At the same time, we believe that our experience and know-how from the industry can contribute to the long-term development of BPA, and thus we are using part of the capital released from our shareholding to reinvest in the newly established Investeringssällskapet”, explains Mats Paulsson, President of Peab.”

Introduction

The Board of Investeringssällskapet has decided that Investeringssällskapet will make a public offer, “the Offer,” to shareholders and holders of warrants issued by BPA AB to transfer their Series A and B shares and warrants to Investeringssällskapet on the terms below.

Investeringssällskapet is a Swedish company, which will be controlled by the investors in PCP II. Peab is a shareholder in the company. Latour will also become shareholder in the company.

Investeringssällskapet has acquired all the shares and warrants held by Trelleborg AB and Peab AB in BPA, corresponding to 47.3% of the capital and 63.4% of the voting rights in BPA after full dilution. Investeringssällskapet has also reached agreement with Investment AB Latour and associated investors to Latour on the acquisition of these parties’ shares and warrants in BPA, corresponding to 5.1% of the capital and 5.4% of the voting rights in BPA after full dilution. Thus, Investeringssällskapet now owns/controls 52.4% of the capital and 68.8% of the voting rights in BPA after full dilution.

NCC AB which owns shares and warrants in BPA corresponding to 6.5% of the capital and 6.2% of the voting rights in BPA after full dilution has expressed a positive view regarding the offer.

Credit pledges have been received to cover the requisite financing of the Offer.

The Offer

The Offer entails the following: SEK 30.50 in cash is offered for each Series A share in BPA. SEK 28 in cash is offered for each Series B share in BPA. SEK 13.60 in cash is offered for each warrant issued by BPA. Commission is not charged.

Terms and conditions underlying the Offer

Investeringssällskapet’s Offer is subject to the following conditions: That the Offer is accepted to such an extent that Investeringssällskapet becomes the owner of shares and warrants representing more than 90% of the total number of shares and more than 90% of the total number of voting rights for all shares in BPA, based on the full exercise of the outstanding warrants. However, Investeringssällskapet reserves the right to complete the Offer at a lower level of acceptance; That the acquisition, prior to public announcement confirming that the Offer is to be completed, is not, in the opinion of Investeringssällskapet, made partly or wholly impossible or is considerably hampered as a result of legislation, legal decisions, or decisions by the authorities in Sweden or abroad, which are in force at the time of the decision or may be expected, or by other circumstances beyond the control of Investeringssällskapet.

Value of the Offer

BPA’s Series A and Series B shares are currently listed on the A-list of the Stockholm Stock Exchange. In addition, the warrants issued by BPA , which entitle holders to subscribe for Series B shares, are listed on the Stockholm Stock Exchange.

Investeringssällskapet’s Offer of SEK 30.50 in cash for BPA’s Series A shares, and SEK 28 in cash for BPA’s Series B shares entail a premium of 31 percent for both Series A and Series B shares in relation to the average closing price for each type of share during the period March 8, 1999 – April 23, 1999, the last 30 trading days prior to the suspension of trading in the BPA share on the Stockholm Stock Exchange on Monday April 26, 1999. Compared with the closing price on Friday April 23, 1999, the offer premium for both Series A and B shares amounts to 27%. The highest trading price during the last five years for BPA’s Series A and B shares was noted on February 19, 1997, with a price paid of SEK 27 for Series A shares and SEK 26.40 for Series B shares.

The terms and conditions underlying the warrants issued by BPA means that each warrant currently entitles the holder to subscribe for a Series B share in BPA at a price of SEK 14.40. Investeringssällskapet’s Offer of SEK 13.60 per warrant thus indirectly represents an offer value of SEK 28 per share. The Offer of SEK 13.60 represents a premium of 75% in relation to the average price paid during the period March 8, 1999 – April 23, 1999, the last 30 trading days prior to the suspension of trading in BPA shares and warrants on the Stockholm Stock Exchange. Compared with the last paid price on Friday April 23, 1999 the offer premium amounts to 60%.

Background and reasons

Since the early 1990s, BPA has undergone considerable restructuring which transformed it from one of Sweden’s largest building and contracting companies to a streamlined installation company. Operations involving building and contracting, metal forging, painting, paint and concrete manufacturing, and machine hire have been divested. Operations have been focused on installation – an area requiring skills and experience in which BPA has been successful for many years; as well as maintenance and technical services for buildings, an area of operations in which installation expertise and familiarity with customers represent key competitive factors.

BPA’s involvement in real estate is concentrated entirely to the associated company Oskarsborg, which owns such companies as Hallström & Nisses Fastighets AB and Fastighets AB Skånehus, plus a large portfolio of development properties in Sweden and part-ownership in AB Kärnvirket, which owns real estate in Belgium. BPA owns 48% of the shares in Oskarsborg and has considerable guarantee commitments to the company. Consequently, BPA is heavily exposed to the real estate sector via Oskarsborg, but this will be gradually phased out in coordination with the other shareholders when financial and market conditions permit. However, the prospect of losses arising as result of this cannot be excluded.

The installation market throughout the Nordic region is undergoing restructuring. Companies are focusing on various specialist areas and many changes in ownership structures are in progress. BPA offers favorable potential to play an active part in the current restructuring process, in which acquisitions are a key element in strengthening BPA’s position in markets primarily in Sweden, Norway and Denmark. The long-term development of a strong BPA will require conscientious efforts in terms of acquisitions and the implementation of the requisite structural rationalization. In the short-term, these efforts may have a negative impact on the BPA Group’s profitability. However, this burden must be accepted in order to achieve the long-term development of BPA, which has the potential to be the leading installation company in the Nordic region with favourable profitability over business cycles.

PCP II, Peab and Latour, combined with BPA’s executive management, have the resources in terms of expertise, experience and capital resources required to undertake the short and medium-term investment for expansion, parallel with a structured phase-out of BPA’s considerable involvement in real estate. This will lay the basis for Investeringssällskapet’s long-term, successful development of BPA into the leading installation company in the Nordic region.

Preliminary schedule

A prospectus is expected to be distributed to shareholders in BPA on or about May 14, 1999. The application period for the Offer is expected to extend from May 18 through June 9, 1999. If Investeringssällskapet announces on June 16, 1999 that the Offer is to be completed, it is expected that payment will be made on or about June 22, 1999. Investeringssällskapet reserves the right to extend the acceptance period, or to defer the payment date.

Advisor

Enskilda Securities is financial advisor to Investeringssällskapet in conjunction with the Offer.

Stockholm April 29, 1999

Investeringssällskapet 1999 AB

For further information:

Peter Toyberg, Director of Procuritas Capital Partners II, Tel: +44 1481 716 069
Gösta Sjöström, Investor relations, Peab, Tel: 0431-89 000, 070-555 00 58
Per Blixt, Investor relations, BPA, Tel: 08-799 85 00, 070-549 28 08

Presentation of Procuritas Capital Partners II

Procuritas Capital Partners II (“PCP II) – a venture capital fund – was established in 1997 with a capital base of about SEK 1 billion. Investors in PCP II include Statoil, Sampo, Pohjola, Länsförsäkringar Wasa, Nordbanken’s Pension Foundation, Norsk Hydro, BG Bank, Sparebanken NOR, Bell Atlantic Asset Management, INVESCO, Industrial Bank of Japan, Praktikerinvest and Danske civil- og akademiingeniörers Pensionskasse (DIP).

Procuritas Partners acts as advisor to PCP II. Since its establishment in 1986, the Procuritas group has acted as advisor in a total of 14 buy-outs in the Nordic region, with a total acquisition price of more than SEK 7.5 billion.