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Thursday, November 1, 2018
Magseis and Fairfield Geotechnologies have entered into an agreement whereby Magseis will acquire the Seismic Technologies business from Fairfield comprising data acquisition, nodal and system sale & rental activities including all shares in Fairfield’s wholly owned UK subsidiary WGP Group.
The consideration in the transaction comprises a combination of cash, Magseis shares, warrants and an earn-out payment, with the agreed purchase price based on an enterprise value of approximately $233 million.
“This transformational transaction enables Magseis to take pole position in the development of the marine seismic industry with critical mass, leading technology, modern crews and financial capabilities to capitalize on exciting growth opportunities,”, says Jan Pihl Grimnes, Chairman of the Board of Directors of Magseis.
Fairfield Seismic Technologies is a leading provider of marine ocean bottom nodal (OBN) seismic systems. The Business has performed 45 OBN surveys globally since 2005 and owns an extensive portfolio of intellectual property for both OBS, land and permanent reservoir monitoring solutions.
The parties have agreed that the purchase price payable by Magseis shall be based on an enterprise value for the business of approximately $233 million. The final purchase price will be determined based on the business’ level of cash, debt and working capital at time of completion of the transaction.
Based on the estimated level of cash, debt and working capital, the purchase price will be settled by the following elements a cash consideration of $165 million;33.5 million Magseis shares, where number of shares issued to Fairfield is calculated based on a value of $85 million and NOK 21.00 per share. The cash consideration will be adjusted for the actual level of cash, debt and working capital at completion.
In addition, Fairfield will receive an earn-out payment related to the Al Shaheen project (included in the backlog of the business) where Fairfield will receive 40% of the net cash generated from the project; and18.25 million warrants for shares in Magseis exercisable at any time during the five-year period after completion of the transaction. The exercise price for the warrants will be set at 150% of the lower of (i) the subscription price in the contemplated equity offering and (ii) the highest of NOK 21.00 and 80% of the subscription price.
The consideration shares and any shares to be issued pursuant to the warrants will be subject to an 18 months and six months lock-up, respectively, pursuant to which such shares, subject to certain exceptions, cannot be sold or otherwise transferred without the prior consent of Magseis.
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