Magseis ASA and Fairfield Geotechnologies have entered into an agreement whereby Magseis will acquire the Seismic Technologies business from Fairfield comprising data acquisition, nodal and system sale & rental activities including all shares in Fairfield's wholly owned UK subsidiary WGP Group. The consideration in the Transaction comprises a combination of cash, Magseis shares, warrants and an earn-out payment, with the agreed purchase price based on an enterprise value of approximately USD 233 million. 

The Transaction combines two highly complementary businesses to create a leading provider of marine seismic solutions, including Ocean Bottom Seismic (“OBS”):

• Unmatched global presence through complementary geographical footprints
• Combined client base comprising the world’s largest E&P companies
• Most efficient technologies for all OBS segments and offerings
• Demonstrated track-record and profitability
• Solid combined backlog of more than USD 350m
• Positioned for accelerated growth in the expanding marine seismic industry

“This transformational transaction enables Magseis to take pole position in the development of the marine seismic industry with critical mass, leading technology, modern crews and financial capabilities to capitalize on exciting growth opportunities”, says Jan Pihl Grimnes, Chairman of the Board of Directors of Magseis.

Fairfield Seismic Technologies is a leading provider of marine ocean bottom nodal (“OBN”) seismic systems. The Business has performed 45 OBN surveys globally since 2005 and owns an extensive portfolio of intellectual property for both OBS, land and permanent reservoir monitoring solutions. Headquartered in Houston, the Business has approximately 230 full-time employees and 250 contracted personnel.

Byron Sugahara, Chairman of Fairfield-Maxwell Ltd, the owner of Fairfield, says, 
“Through Fairfield-Maxwell, my family has owned and invested in Fairfield Geotechnologies for more than 40 years. We are excited to become Magseis Fairfield’s largest shareholder given our positive outlook on the seismic services industry and confidence in the combined management team. We are also pleased that the transaction will provide Fairfield-Maxwell additional capital for potential reinvestment in Fairfield Geotechnologies’ remaining data licensing and data processing business.”

The Business generated YTD 2018 revenues as of 30 September 2018 of USD 172 million, and backlog as of 1 January 2019 is USD 180 million (including the multi-client award from TGS and Schlumberger announced on 12 October 2018). 

On a combined, pro-forma basis, Magseis and Fairfield Seismic Technologies provide guidance for 2019 revenues exceeding USD 500 million. Combined pro-forma backlog as of 30 September 2018 was USD 350 million (including Magseis’ contract award from BGP Offshore, China National Petroleum Corporation announced on 8 October 2018 and the award from TGS and Schlumberger). 

“Magseis and Fairfield Seismic Technologies combined will have the industry’s largest nodal inventory and be positioned for global operations with substantial scale advantages. The combined entity will have an excellent technology platform providing optimal ability to meet all client requirements regardless of geography, water depth and acquisition methodology” says Per Christian Grytnes, Chief Executive Officer of Magseis.

The CEO of Fairfield, Charles W. (“Chuck”) Davison, is proposed to become new Chairman of the Board of Directors of Magseis upon completion of the Transaction. Anthony Dowd, President and CEO of Fairfield Maxwell Ltd, has been proposed to become a member of Magseis' nomination committee. 

“We are truly excited and look forward to combining with Magseis, creating a leader in the marine seismic industry on a global basis. We believe the multiple value creation opportunities afforded by the Transaction are extremely compelling and in the best long-term interest of all stakeholders, including our customers and employees” says Chuck Davison. 

The Transaction will not lead to any other direct changes in the management of Magseis.

The Transaction does not include the data licensing or data processing business of Fairfield, which will be retained by Fairfield. The Business will be carved out of Fairfield's organization and transferred into a newly incorporated company owned by Fairfield before completion of the Transaction (the “Carve-out”). 

Following completion of the Transaction, the combined organization will comprise approximately 430 full-time employees and be structured in three business areas: (i) Eastern Hemisphere Operations (Headquarters in Oslo, Norway), (ii) Western Hemisphere Operations (Headquarters in Houston, USA) and (iii) Technology.

KeyFacts Energy Industry Directory: Magseis