Norwegian seismic specialist TGS-NOPEC Geophysical has agreed a deal to acquire Spectrum, who owns the world’s largest 2D library.
TGS says the deal will create a leading multi-client geophysical data provider in all major mature and frontier basins world-wide, and enhance its position as a leading multi-client geophysical data provider.
TGS is offering Spectrum shareholders 0.28x ordinary shares of TGS for each Spectrum share in addition to a cash consideration of $0.27 per share.
The deal is supported by the board of directors of both companies, and shareholders representing 34.1% of Spectrum have already agreed to support the deal.
Kristian Johansen, CEO of TGS, commented: “Spectrum has successfully built a strong position in key offshore basins, particularly in the South Atlantic. The transaction thus fits well with one of TGS’s key strategic goals of growing exposure to this region. Moreover, Spectrum’s library, and in particular the vast 2D coverage, further adds to TGS’s strategy within data analytics, where access to large amounts of data is a key success factor. TGS remains committed to maintain the existing dividend policy and emphasizes that the strong cash position, the combination of two free cash flow positive entities and significant cost synergies, will enable continued industry leading shareholder returns.”
The combination of the two companies is expected to result in around $20m per year of cost synergies.