Sale of Wellhead Exploration for Jack-Up Applications Business to TechnipFMC
Plexus Holdings plc is pleased to announce the sale of its wellhead exploration equipment and services business for Jack-Up applications (the "Jack-up Business") to FMC Technologies Limited ("TFMC"), a subsidiary of TechnipFMC (Paris:FTI)(NYSE:FTI) one of the leading oil & gas service and equipment companies (the "Disposal").
In addition and as part of the Transaction, Plexus, Plexus' subsidiary POSL and TFMC will also be entering into a Collaboration Agreement ("CA") which establishes a framework to work together both on the development of existing POS-GRIP IP for applications outside of jack-up exploration, as well as future new technologies.
The Disposal follows the signing of a conditional Business Purchase Agreement ("BPA") by Plexus, POSL and TFMC. Under the terms of the BPA, the Plexus Group will receive an initial gross cash consideration of £15,000,000, subject to certain adjustments, with an additional sum of up to £27,500,000 payable dependent on the future performance of the Jack-up Business during a three-year earn-out period. The earn-out has the potential to increase the total cash consideration to £42,500,000.
The Disposal is in line with Plexus' strategy of increasing industry awareness of its POS-GRIP friction grip technology by initially focusing on proving the superior qualities of its equipment within the jack-up wellhead exploration market, where to date its technology has been deployed on hundreds of wells worldwide, before targeting other markets such as surface production, subsea and de-commissioning. The Board of Plexus believes that the Disposal represents a significant milestone for the Company as it demonstrates the attractiveness of POS-GRIP technology.
To facilitate a smooth transition of the Jack-up Business, the parties will enter into a Transitional Services Agreement through which the Plexus Group will provide certain services to TFMC on a transitional basis. At the same time, Plexus and TFMC have also agreed to enter into two Licence Agreements, one royalty free and the other royalty bearing, which deliver to TFMC the necessary IP which is held by the Company and which relates to the Jack-up Business.