by Scana Industrier ASA
Friday, May 02, 2008
Scana Industrier ASA and FPSOcean AS have agreed to establish a new company that will focus on developing technology and equipment for floating production units. This is a continuation of the ongoing jointly owned development of the DRB (Disconnectable Riser Buoy) turret and fluid transfer system.
The new company has furthermore signed an acquisition agreement with Blyth-Newcastle UK-based Flexible Engineered Solutions Limited (FES). The purchase price will be paid partly in cash and partly in shares issued by the new company and with a portion of the purchase price being subject to an earn-out model over a period of time.
FES is a recognized supplier of proven fluid transfer systems, FPSO turrets and other specialized equipment serving the international oil & gas industy. The FES technology will complement Scana/FPSOcean's patent-pending solutions. Scana's share of ownership in the new company will initially be above 50% and Scana will have the right to nominate the Chairman of the board. Closing of the transactions is subject to due diligence and final board approvals, and is expected to take place in June.
The ambition of the new company is to create a leading independent provider of equipment to the FPSO market and similar markets including floating LNG production units. The company will continue to utilize Scana technology and manufacturing capacity and will adopt current and future agreements with FPSOcean and other FPSO contractors. The parties expect significant international growth fueled by the access to FES market-position, technology and very capable engineering and project organization.
Publicly available information about the market-segment for floating production indicates a need for at least 15-20 new units per year over the next few years. The base resources for the new company will comprise parts of the company Scana AMT in Vestby including personnel, technical personnel from FPSOcean and all resources within FES. The new company will continue to be located in Vestby, Blyth-Newcastle and Oslo. The new company will at the time of establishment employ about 45 engineers and project management personnel and is expected to have an annual turnover of approximately NOK 300 million in the first full year of operations.
"It is a stated ambition for Scana to maximize shareholder values," said Rolf Roverud, CEO of Scana. "This joint venture combines the expertise, know-how and market references from FPSOcean, FES and Scana, and allows the new combined company to take the position as the leading independent technology partner for turret based systems to the rapidly growing FPSO market. At the same time Scana will become a strategic supplier of engineered components and metallurgic services to the new company. This combination will give the new company a competitive edge and a good basis for creating significant shareholder values."
Robert Anderson and Ian Latimer of FES comment: "The only two independent suppliers of turret-based solutions have joined forces in order to be able to serve the global market place. As a privately owned company FES considered several possible growth restrictions which should now be entirely replaced by significant growth opportunities. We are very exited to join Scana in this effort to build a new leading technology provider.
"FPSOcean is the pioneer customer deploying the DRB developed in co-operation with Scana. Our vision for deployment of disconnect able turret systems goes far beyond the ongoing delivery to our first DP FPSO 'DeeP Producer 1.'"
"By this strategic move FPSOcean will secure two paramount accomplishments. Firstly the establishment of a technology company that shall be the leading independent supplier of turrets and fluid transfer systems to the international oil and gas industry. This company will possess enabling technology to support our own growth ambition in the deepwater floating production segment. Secondly, we are creating value for our shareholders by the holding of a significant minority position in a company with a sound growth potential in a high margin industry," said Georg Sverdrup Onsrud, CEO of FPSOcean.
Scana Industrier's subsidiaries and Scana Offshore Vestby, in particular, will continue to provide equipment and services to the new company as well as existing customers within the oil and gas segment. Scana targets further growth through a wide range of products and services within the Oil and Gas business unit in general
