TM hf.
Inside information

TM concludes the purchase of Lykill

On July 21st 2019, TM hf. (TM) started exclusive negotiations with Klakki ehf., owner of Lykill fjármögnun hf. (Lykill), in order to acquire Lykill. These negotiations concluded on October 10th with the signing of a purchase agreement to acquire 100% stake in Lykill. The purchase price is ISK 9,250 million plus a payment equal to the amount of distributable after-tax-profit of Lykill for the operating year of 2019 that TM pays to the seller.

The transaction was subject to three conditions: the approval of TM´s shareholder meeting, the Financial Supervisory Authority and the Competition Authority. The purchase was approved at TM’s shareholder meeting on November 13^th 2019, by the Competition Authority on November 15^th 2019 and on December 23th the Financial Supervisory Authority approved TM as Lykill´s owner. Accordingly all conditions have been met.

Today, January 7^th 2020, the purchase was concluded by the payment of the purchase price, apart from the 2019 after-tax-profit of Lykill.  Hence Lykill has now become a part of the TM group.

The acquisition of Lykill is in accordance with TM’s strategy and TM’s operations will from now on be divided into three equally important pillars; insurance operations, lending activities and investment activities. The acquisition creates considerable opportunities to increase profitability, obtain synergies both on the revenue and the cost side, increase funding options, lower funding cost and gain a more efficient capital structure. Various integration projects to meet synergies goals have already begun.

Lykill´s operations will in the coming weeks be moved to TM´s headquarters at Síðumúli 24 with the aim to finalize the relocation by the end of February 2019.

TM´s advisors in this transaction were BBA // Fjeldco, Deloitte and KPMG.

Sigurður Viðarsson, CEO of TM hf.:

„It is a good start of the new year to conclude the purchase of Lykill as intended. The acquisition will strengthen the group, increase profitability to shareholders and create exciting opportunities in insurance- and financial services going forward. We are thankful for the support from our shareholders during the process and look forward to the next steps in the group´s development. It is an exciting challenge to unite these two companies and our aim is to use each strengths and together with our competitive employees to advance our financial services both to individuals and companies. There are exciting times ahead.”

Jón Örn Guðmundsson, CEO of Klakki:  

“This is a major milestone for Lykill, which has an over three-decade long history in asset financing in Iceland. Lykill has a strong foothold on the Icelandic asset financing market and it gives everyone who played a part in its restructuring great pleasure to see it grow and prosper. This conclusion is positive for Klakki's creditors and shareholders. It's also enjoyable for the employees of Lykill who now get a strategic owner and can commence a new and exciting journey with TM. TM and Lykill will now be in a position to provide customers with a more diverse service offering, in the field of car insurance and financing services. "