Norwegian seismic data acquisition and processing company TGS is set to acquire all shares of the Norwegian ocean bottom node survey specialist Magseis Fairfield.
TGS will put forward a voluntary exchange offer to acquire all shares of Magseis for a consideration to the Magseis shareholders in the form of 0.0426 ordinary shares of TGS and NOK 2.30 in cash per Magseis share.
Based on the closing price of TGS on 28 June 2022, 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.
The board of directors of Magseis has unanimously resolved to recommend the TGS offer.
Magseis shareholders, including the largest shareholder, Fairfield MS, LLC, and members of the Magseis Board and management, who collectively own 33.4% of the outstanding share capital of Magseis, have entered into pre-acceptances with respect to the offer.
According to TGS, the offer consideration of NOK 8.6048 per Magseis Share represents a premium of 53.7% compared to the closing price of the Magseis shares of NOK 5.60 on June 28; 37.4% compared to the volume-weighted average price ("VWAP") of the Magseis shares for the three-month period ending on June 28, 2022; and a 51.1% compared to the VWAP of the Magseis shares for the six-month period ending June 28 2022.
Kristian Johansen, CEO of TGS said: "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). 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.
"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. 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," says Carel Hooijkaas, CEO of Magseis.
($1 = 9.82 Norwegian Crowns)