Archer buys Norwegian well intervention player
Offshore services provider Archer has signed a sale and purchase agreement (SPA) to acquire DeepWell based on an enterprise value of NOK 177 million ($21.3 million) on a debt and cash-free basis.
Archer first signed an offer letter with Moreld laying out principle terms to purchase 100 per cent of the shares in DeepWell in late April 2021.
The contemplated transaction was subject to due diligence, negotiation of the transaction documentation, closing conditions, and regulatory approvals.
Announcing the SPA on Monday, Archer said that the transaction is accretive both to Archer’s NIBD / EBITDA ratio and EV / EBITDA ratio.
Archer will use existing cash and liquidity reserves to finance the transaction.
Based in Norway, DeepWell is a Norwegian well intervention company focused on mechanical wireline and cased hole logging services.
DeepWell employed approximately 200 people and had a revenue of NOK 360 million in 2020. DeepWell commands a wireline unit fleet on the NCS and holds a strategic long-term contract in the light well intervention market.
Archer’s VP Wireline, Lage Nordby, commented: “By strengthening our wireline equipment fleet and organization, increasing our low emission solutions, and continuing our track record for service quality, Archer is well positioned on the Norwegian Continental Shelf.
“The acquisition of DeepWell gives us access to equipment and employees needed in order to fulfil our obligations under our recently awarded wireline contracts with Equinor and ConocoPhillips”.
Jan Erik Rugland, COO of Moreld and CoB of Deepwell: “We are pleased to have reached an agreement with Archer securing continued operations on existing contracts and the continued development of DeepWell’s state of the art wireline technology”.
Rugland added: “This transaction is in line with our strategy to divest capital intensive businesses in order to focus our energy on transition and growth plans”.
The closing of the transaction is expected to be finalized during second quarter 2021 and is subject to customary closing conditions and regulatory approvals.