Norwegian seismic data company TGS has made an offer to buy compatriot Magseis Fairfield in a deal that values the seismic player at NOK 2.33 billion (approximately $237 million).
The two companies entered into a transaction agreement whereby TGS, on and subject to certain terms and conditions, will put forward a voluntary exchange offer to acquire all shares of Magseis for a consideration to the shareholders in the form of 0.0426 ordinary shares of TGS and NOK 2.30 in cash per Magseis share.
“With a strengthening focus on costs and cycle times in the exploration and production of oil and gas, an increasing amount of demand of geophysical data is driven by infrastructure-led exploration (ILX) and production monitoring (4D seismic),” said Kristian Johansen , TGS CEO.
“Combining Magseis’s leading position in the Ocean Bottom Node (OBN) market with TGS’s multi-client and data processing capabilities creates a unique offering of superior quality products and services across the value chain.”
Based on the closing price of TGS on 28 June, the value of the offer consideration is equal to NOK 8.6048 per Magseis share, and the offer values the total issued share capital of Magseis at approximately NOK 2,333 million.
Magseis’ board of directors has unanimously resolved to recommend the offer. Magseis shareholders, including the largest shareholder, Fairfield MS, LLC, and members of the board and management, who collectively own 33.4% of the company’s outstanding share capital, have entered into pre-acceptances with respect to the offer.
These pre-commitment undertakings can on certain terms be withdrawn in the event of a superior competing offer that is not matched by TGS.
The offer period is expected to commence in August.
“The seismic industry is undergoing a significant transformation brought about by fundamental structural challenges facing the industry. Adapting to these changes via consolidation will be beneficial to our investors and customers,” said Carel Hooijkaas , CEO of Magseis.
“The combined company will be a leading integrated seismic provider with a best-in-class OBN technology and track-record, strong data processing capabilities, and a multi-client business with a large customer base for the company’s operations and a truly global geographical footprint.”
Register for Offshore Energy Exhibition & Conference: