Oil and gas services company TechnipFMC has reached an agreement with Plexus Holdings to acquire Plexus’ Wellhead exploration equipment and services business for jack-up applications.
Plexus Holdings is a UK-based oil and gas engineering services business and owner of the proprietary POS-GRIP friction-grip method of wellhead engineering,
TechnipFMC explained on Thursday that the acquisition of Plexus’ business expands its portfolio in the mudline and high pressure high temperature (HPHT) arena, enabling the company to position itself as a provider of products and services to the global jack up exploration drilling market.
The business will be integrated into the TechnipFMC Surface Technologies segment and will include the transfer of key personnel from Plexus to ensure continuity and ongoing customer support. The business will continue to operate from the existing location in Dyce, Aberdeen, UK. Completion of the transaction is subject to the satisfaction of certain closing conditions.
Richard Alabaster, President of TechnipFMC’s Surface Technologies business, stated: “I am very pleased that we have reached this agreement, which fits within TechnipFMC Surface Technologies’ strategy to extend and strengthen our position in exploration-drilling products and services while leveraging our global field presence. It also enhances TechnipFMC’s capability in HPHT applications.”
In addition and as part of the transaction, Plexus, Plexus’ subsidiary POSL and TechnipFMC’s subsidiary, FMC Technologies Limited, will also be entering into a collaboration agreement which establishes a framework to work together both on the development of existing POS-GRIP IP for applications outside of jack-up exploration, as well as future new technologies.
Under the terms of the deal, the Plexus Group will receive an initial gross cash consideration of £15 million ($19.8M), subject to certain adjustments, with an additional sum of up to £27.5 million ($36.3M) payable dependent on the future performance of the Jack-up Business during a three-year earn-out period, Plexus said in a statement on Thursday. The earn-out has the potential to increase the total cash consideration to £42.5 million ($56.1M).
To facilitate the transition, the parties will enter into a transitional services agreement through which the Plexus Group will provide certain services to TFMC on a transitional basis. At the same time, Plexus and TFMC have also agreed to enter into two license agreements, one royalty free and the other royalty bearing, which deliver to TFMC the necessary IP which is held by the company and which relates to the Jack-up Business.
Plexus CEO, Ben Van Bilderbeek, said: “I believe that the disposal and collaboration agreement with TechnipFMC opens up new opportunities for our technology. TechnipFMC is acquiring a business which has supplied a wide range of blue chip operators of the caliber of BP, Centrica, ENI, Maersk, Royal Dutch Shell, Statoil, and Total with wellheads for use on hundreds of wells worldwide and which already has a strong market reputation in the UKCS and ECS, particularly for HP/HT applications.
“Going forward there are numerous opportunities for the application of POS-GRIP technology and encouragingly, as the recent contract win from Centrica for the supply of surface production application equipment demonstrates, we are already making progress in this regard.”
Offshore Energy Today Staff