Aberdeen-based oil and gas engineering services company Plexus Holdings announced the sale of its wellhead exploration equipment and services business for Jack-Up applications to FMC Technologies Limited, a subsidiary of TechnipFMC, for up to £42.5 million.
Plexus owns the proprietary POS-GRIP friction-grip method of wellhead engineering.
Further, Plexus, Plexus’ subsidiary POSL and TFMC will enter a collaboration agreement 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.
Plexus said: “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.”
Plexus CEO Ben Van Bilderbeek said: “I am pleased to announce this important transaction with TechnipFMC, one of the world’s foremost oil and gas service companies.
“I believe that the Disposal and Collaboration Agreement with TechnipFMC opens up new opportunities for our technology.
“TechnipFMC is acquiring a business which has supplied a wide range of blue chip operators of the calibre of BP, Centrica, ENI, Maersk, Royal Dutch Shell, Statoil, and Total with wellheads for use on hundreds of wells worldwide and which already has a strong market reputation in the UKCS and ECS, particularly for HP/HT applications.
“Going forward there are numerous opportunities for the application of POS-GRIP technology and encouragingly, as the recent contract win from Centrica for the supply of surface production application equipment demonstrates, we are already making progress in this regard.
“We look forward to working closely with TechnipFMC to ensure the earn-out period is as successful as possible for both companies and also under the Collaboration Agreement with the potential to further develop our existing POS-GRIP IP for applications outside of the Jack Up exploration business.
“I will be working hard as CEO of Plexus with my team to grow the business and repeat the past success we have enjoyed in raising standards for HP/HT exploration wellheads in the wider energy sector, as well as focusing on generating shareholder value.”