Schlumberger Sells WesternGeco to Shearwater
Shearwater GeoServices has entered into a definitive agreement to acquire the marine seismic acquisition assets and operations of WesternGeco, the geophysical services product line of Schlumberger.
Shearwater will own and operate a fleet of 14 seismic vessels offering a full range of acquisition services including 3D, 4D and ocean bottom seismic (OBS).
The company will also have a portfolio of proprietary streamer technology and processing software enabling effective execution of geophysical surveys and delivery of high-quality data.
The combined company will have approximately 600 employees and will operate in all major offshore basins across the world.
“This combination will make Shearwater a leading global and technology-driven full-service provider of marine geophysical services with a strong financial platform able to deliver exceptional customer solutions,” says Christian Berg, the CEO of GC Rieber Shipping. “We are very pleased with this transaction, which is in line with the strategic ambition we had when creating Shearwater in 2016 together with Rasmussengruppen. We are satisfied with yet again being instrumental in developing market leading companies, while capitalizing on our investment.”
Schlumberger will receive cash consideration based on an enterprise value of USD 600 million plus a 15% post-closing equity interest in Shearwater GeoServices Holding AS. In addition, Schlumberger will also be entitled to payments under an earn-out agreement linked to future vessel usage over and above specific thresholds. Under the terms of the agreement, Schlumberger will have an option to utilize two vessels from Shearwater on potential multiclient work for the first two years after closing the transaction.
To ensure a more robust financial platform, an additional USD 50 million of cash will be injected in Shearwater GeoServices Holding AS for working capital purposes, bringing the total cash funding requirement for the proposed transaction to USD 650 million.
The USD 600 million of cash consideration to Schlumberger and USD 50 million for working capital purposes will be funded by USD 325 million in new cash equity and USD 325 million in debt financing. Rasmussengruppen has fully underwritten the Shearwater Issue and GC Rieber Shipping intends to subscribe for approximately USD 28 million in the Shearwater Issue before closing. GC Rieber Shipping`s participation in the Shearwater Issue will be financed initially through a shareholder loan provided by GC Rieber AS, GC Rieber Shipping`s largest shareholder. Following closing of the Acquisition, GC Rieber Shipping intends to carry out a rights issue to refinance the shareholder loan. Further details regarding the contemplated rights issue will be announced in due course after the terms have been decided.
Assuming completion of the Acquisition and the Shearwater Issue, and assuming the GC Rieber Shipping rights issue, GC Rieber Shipping`s ownership in the combined company will be approximately 20%. Rasmussengruppen and Schlumberger will hold approximately 65% and 15%, respectively. GC Rieber Shipping expects to book a non-cash gain of approximately USD 32 million as a result of the transaction.
The Acquisition is subject to regulatory approvals and other customary closing conditions. The parties expect to close the transaction in the fourth quarter of 2018.