The transaction will create a full-service geophysical data company focused on multi-client data, streamer data acquisition, ocean bottom node data acquisition, imaging, and new energy data, in which shareholders of TGS and PGS will own around two-thirds and one-third of the combined company, respectively
The transaction will create a full-service geophysical data company. (Credit: Maria Lupan on Unsplash)
Norway-based energy data and analytics company TGS has agreed to acquire the oilfield service company PGS in an all-share transaction valued at NOK9.3bn ($864m).
Under the terms of the acquisition, PGS shareholders will receive 0.06829 ordinary shares of TGS for each PGS share held, a 20.7% premium to the last closing price of PGS shares.
The transaction is planned to be completed as a statutory merger pursuant to Norwegian corporate law and will create a strong full-service energy data company.
The acquisition is subject to certain conditions, including confirmatory due diligence by both parties, finalising, and executing a definitive merger plan.
It is also subject to certain customary closing conditions, including relevant regulatory approvals and expiry of statutory waiting periods and no material adverse change occurring.
Upon completion of the transaction, TGS shareholders will own around two-thirds of the combined company, while PGS will own around one-third, based on the respective share capital.
TGS CEO Kristian Johansen and CFO Sven Børre Larsen will continue in their positions after the transaction.
Commenting on the deal, Kristian Johansen said: “Our clients will benefit from scale, a unique technology portfolio and premier service quality. Bringing together two distinct, yet complementary, companies position us even better for a continued upcycle in the energy sector.”
PGS president and CEO Rune Olav Pedersen said: “The seismic industry is changing whereby production seismic is becoming increasingly important alongside the traditional exploration seismic.
“By combining TGS and PGS’ complementary resources, we create a fully integrated geophysical service provider well positioned to generate significant value for all stakeholders.”
The transaction will create a full-service geophysical data company focused on multi-client data, streamer data acquisition, ocean bottom node data acquisition, imaging, and new energy data.
The combined company is expected to provide a global seismic library to its customers, which comprises data from all active basins in both the western and eastern hemispheres.
It will have seven 3D data acquisition vessels for streamer acquisition, and around 30,000 mid and deepwater nodes for Ocean Bottom Node (OBN) acquisition.
The combined company will provide services to in-house and external customers integrating on-premises and cloud-based high-performing computing services.
In addition to the service offering and platform, the merger is expected to provide cost synergies primarily estimated at more than $50m each year.
SpareBank 1 Markets served as financial advisor, and Schjødt as legal advisor to TGS, on this transaction, while Pareto Securities served as the financial advisor and Advokatfirmaet BAHR as legal advisor to PGS.
TGS board chair Chris Finlayson said: “This is a strategic transaction for TGS and a major step on the journey we started in 2019. It will combine the capabilities of both companies to create a geophysical powerhouse.
“The transaction continues TGS’ strategic development from a pure Multi-Client seismic company to the leading acquirer and provider of geophysical data to both the oil and gas and new energy industries.”
PGS board chair Walther Qvam said: “The merger creates a full-service geophysical company with a strong balance sheet. Financial flexibility enables investments in attractive core activities as well as in the rapidly growing new energy business.”