Plexus Holdings, an oil and gas engineering services business and owner of the POS-GRIP friction-grip method of wellhead engineering, has completed the sale of its wellhead business for jack-up applications to TechnipFMC.
The deal was announced in October last year. Completion of the disposal follows the signing of a conditional business purchase agreement by Plexus, Plexus’ subsidiary Plexus Ocean Systems Limited (POSL) and FMC Technologies Limited (TFMC), a subsidiary of TechnipFMC, an oil and gas service and equipment companies.
Shareholder approval of the disposal was obtained on November 6, 2017.
In addition to completion of the sale of its wellhead exploration equipment and services business for jack-up applications and the licensing of certain intellectual property to TFMC, Plexus on Thursday also announced the receipt of an initial net consideration of £14.2 million ($20.3M).
An additional sum of up to £27.5 million is payable dependent on the future performance of the Jack-up Business during a three-year earn-out period, Plexus said.
Plexus also announced that Plexus, POSL and TFMC have entered into a collaboration agreement which establishes a framework for the development of existing POS-GRIP IP for applications outside of the jack-up exploration wellhead application. The agreement provides for the formation of a joint steering committee who will be able to explore potential areas of future collaboration.
Plexus CEO, Ben Van Bilderbeek, said: “The disposal and collaboration agreement is a win-win for both parties. As well as achieving a sale value of up to £42,500,000 for the Jack-up Business, we gain industry recognition for our technology, which we have long claimed sets a new standard in terms of performance and safety. Furthermore, we have secured the opportunity to collaborate with a top tier company to explore potential development of additional products based on POS-GRIP.
“Encouragingly, we believe that the upward trend of the oil price in recent months, alongside indicated OPEC-led production cuts through 2018, could well be the catalyst for an uplift in oil & gas exploration activity during the three year earn-out period.”
Richard Alabaster, President of TechnipFMC’s Surface Technologies business, stated: “I am very pleased that we have finalized the transaction which supports our objective of extending and strengthening our position in exploration-drilling products and services while leveraging our global field presence. It also enhances TechnipFMC’s capability in HPHT applications.”