TGS-NOPEC Geophysical Company ASA (TGS) announced Thursday that it has submitted a conditional offer for the purchase of the multi-client data library of PGS ASA.
Under the offer, PGS would receive a cash consideration of $600 million. In addition, TGS said it has proposed that the parties enter into a post-closing collaboration agreement for future PGS multi-client projects.
TGS noted that the proposed transaction presents an opportunity for PGS and its stakeholders to monetize its multi-client data library in excess of its full reported value. TGS highlighted that the offer will secure the liquidity required to repay PGS’ $135 million revolving credit facility due in September and said it will further significantly deleverage the company to support its continued operations and enhance the ability to service the remaining debt.
“We see a strong complement between our existing business and the PGS data library and the opportunity to leverage our expertise and scale to improve returns,” Kristian Johansen, the chief executive officer (CEO) of TGS, said in a company statement posted on TGS’ website.
“Concurrently, a refocused and refinanced PGS will be a world-leading and highly innovative provider of acquisition technology and marine acquisition capacity, providing a strong platform for creating long-term value for the company´s stakeholders,” Johansen added in the statement.
“We believe the consolidation and further partnership between our two companies carries a strong industry logic and we look forward to initiate the dialogue with the management and board of PGS,” the TGS CEO continued.
TGS said its offer is valid until August 16 and added that it is prepared to “swiftly” enter into discussions with PGS with the aim of securing a definitive agreement “in an expeditious manner”. The company believes a definitive agreement could be entered into by the end of this month.
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