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 USD 233 million.
The Transaction combines two highly complementary businesses to create a leading provider of marine seismic solutions, including Ocean Bottom Seismic (“OBS”), acccording to a press release issued by 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.
“Magseis and Fairfield Seismic Technologies combined will have the industry’s largest nodal inventory and be positioned for global operations with substantial scale advantages. The combined entity will have an excellent technology platform providing optimal ability to meet all client requirements regardless of geography, water depth and acquisition methodology” says Per Christian Grytnes, Chief Executive Officer of Magseis.
The CEO of Fairfield, Charles W. (“Chuck”) Davison, is proposed to become new Chairman of the Board of Directors of Magseis upon completion of the Transaction. He will then replace Jan Grimnes. The Transaction will not lead to any other direct changes in the management of Magseis.
The Transaction does not include the data licensing or data processing business of Fairfield, which will be retained by Fairfield.
Following completion of the Transaction, the combined organization will comprise approximately 430 full-time employees and be structured in three business areas: (i) Eastern Hemisphere Operations (Headquarters in Oslo, Norway), (ii) Western Hemisphere Operations (Headquarters in Houston, USA) and (iii) Technology.
Based on the estimated level of cash, debt and working capital, the purchase price will be settled by the following elements:
- Cash consideration of USD 165 million;
- 33.5 million Magseis shares, where number of shares issued to Fairfield is calculated based on a value of USD 85 million and NOK 21.00 per share.
Magseis intends to finance the cash consideration through a combination of the issuance of new shares and debt. It is contemplated that Magseis will raise minimum USD 150 million by issuing new shares in an accelerated bookbuilding process expected to be completed early November 2018, and USD 50 million through new bank facilities provided by DNB.
The Transaction is expected to be completed by the end of the fourth quarter of 2018.