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CGGVeritas acquires Fugro's Geoscience division for Eur 1.2bn

Friday, September 28, 2012

Geophysics giant CGGVeritas has acquired the geoscience division of Fugro for Eur 1.2bn.

CGGVeritas sees the transaction as a way to move into the reservoir characterisation / geological services market, which is less capital intensive and cyclical than seismic acquisition, it says. This includes reservoir characterisation and modelling software and services.

It also means that the company gets into new data acquisition businesses - airborne surveys, marine electromagnetics, marine magnetics and gravity.

The acquisition includes Fugro's four high-end 3D seismic acquisition vessels.

Following the transaction, CGGVeritas and Fugro will develop a joint venture for collecting seismic data on the seabed. The joint venture will be 60 per cent owned by Fugro, and Fugro will pay CGGVeritas Eur 225m.

Approximately 2500 employees will join CGGVeritas from Fugro and approximately 230 from CGGVeritas will join the Seabed Joint Venture.

The transaction does not include Fugro's existing multiclient seismic library and nodes businesses.

CGGVeritas will also have an agreement to sell Fugro's existing multi client data.

The Eur 1.2bn will be paid in cash, expected to be financed 1/3rd from equity, 2/3rds from debt and share proceeds from the Seabed joint venture described above.

For the 12 months ending 31st December 2011, Fugro's Geoscience Division excluding the multi-client library and Ocean Bottom Nodes businesses, had a revenue of $1bn and EBITDAS of $161m. The combined group pro forma revenue was $4.2 billion with EBITDAS of $1.0 billion.

'It perfectly fits our strategy, significantly increasing our integrated geology and geophysics, reservoir
characterization and development capabilities, along with strengthening our core equipment and acquisition offer in particular with immediate access in marine to high end vessels at a time of market recovery," says Jean-Georges Malcor, CEO of CGGVeritas.

"It also extends our service range to new customers and additional markets such as airborne."

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