OREANDA-NEWS. July 08, 2014. Eesti Energia and Leonhard Weiss Baltic Holding signed an agreement for the sale of Eesti Energia’s network construction subsidiary to Leonhard Weiss.

The transaction is in line with Eesti Energia’s strategy to focus on the oil shale industry, and the group will earn EUR 7 million from sale of Vorguehitus shares.

The new owner of Eesti Energia Vorguehitus will be Leonhard Weiss Baltic Holding, a subsidiary of a large German engineering group Leonhard Weiss, which has been operating in Estonia in the field of railroad construction and maintenance since 2011.

“It makes sense for Eesti Energia to divest non-core operations as we are focusing more on the development of the oil shale industry,” Sandor Liive, Chairman of the Management Board of Eesti Energia, explains the background of the transaction. “Vorguehitus, on the other hand, needs an owner whose main business is design and construction of networks. We managed to find such a new owner, which is why we hope that the company’s future development prospects are good.”
According to Alexander Schneider, Chairman of the Management Board of Leonhard Weiss Baltic Holding, it is an important transaction. He added that Vorguehitus, which will be renamed to Leonhard Weiss Energy, can use Leonhard Weiss’ existing network in the Baltic and Scandinavian countries for developing and expanding its business further. For the majority of Vorguehitus’ nearly 300 employees, the new owner will not bring about any major changes. Employment contracts are transferred to the new owner as they are, as the company is being sold as a whole.

Eesti Energia Vorguehitus provides both turn-key solutions as well as single projects for the construction and maintenance of electrical and communication networks, from design to construction and maintenance services. 269 employees work in the company.

The completion of the transaction is subject to conditions, including approval by the Estonian Competition Authority. SORAINEN advised Eesti Energia in all phases of the transaction, including legal due diligence of operations, assistance in drafting transaction documents and in negotiating the terms of the transaction and support on other transaction issues. SORAINEN continues to work on the transaction to ensure its successful finalisation. The SORAINEN team included partner Toomas Prangli, senior associate Paul Kunnap and associate Sandra Metsamart. Eesti Energia’s financial advisor for the transaction was Porta Finance.