Seismic Technologies Business Of Fairfield Geotechnologies To Be Acquired By Magseis

Houston,TX (GLOBE NEWSWIRE) - Fairfield Geotechnologies (“Fairfield”) today announced that it has entered into a definitive agreement with Magseis ASA (“Magseis”) 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 (jointly the "Business") (the “Transaction”).The name of the new business will be Magseis Fairfield. Fairfield Geotechnologies will remain privately held by the Sugahara family through Fairfield-Maxwell and focus its efforts on data licensing and data processing, as well as imaging, data analytics and data interpretation.

The parties have agreed that the purchase price payable by Magseis shall be based on an enterprise value for the Business of approximately USD 233 million, which comprises a combination of cash and Magseis shares. In addition, Fairfield-Maxwell will receive five year warrants and certain rights under an earn-out payment mechanism related to a project in the Al Shaheen Oil Field located in Qatar. The final purchase price will be subject to closing working capital adjustments.

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

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.”

“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.

The Chairman, CEO and President of Fairfield, Charles W. (“Chuck”) Davison, has been proposed as the 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 as 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.

“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 (“PC”) Grytnes, Chief Executive Officer of Magseis.

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.

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.

Fairfield Geotechnologies will have access to Magseis Fairfield’s equipment and services through a five-year preferred supplier agreement.

Corporate Approvals And Conditions
Completion of the Transaction is conditional upon, inter alia (i) antitrust approval in the United States, (ii) Magseis being able to raise the required funds, and (iii) the general meeting of Magseis approving the share and warrant issues required for Magseis to complete the Transaction.

Completion of the Transaction is also subject to fulfilment of certain additional conditions, such as Magseis having established, for the benefit of certain officers and employees in the Business, an incentive plan of approximately USD 7 million, Chuck Davison having been elected as Chairman of the Board of Directors of Magseis, completion of a confirmatory due diligence and no material breach of warranties, as well as certain other customary conditions.

Major existing shareholders of Magseis representing more than 50% of the shares outstanding, have communicated their support for the Transaction and undertaken to vote in favor of the issuance of new equity and warrants, and for the election of Chuck Davison as new Chairman, at an extraordinary general meeting of Magseis (the “EGM”).

Financing commitments for the Transaction are expected to be secured (subject to approval by the EGM) as soon as practically possible and at the latest by the end of November 2018.

The Transaction is expected to be completed by the end of the fourth quarter of 2018.

Advisors
Thompson Hine LLP and Schjødt are acting as legal advisors to Fairfield. Crowe LLP is acting as financial due diligence advisor to Fairfield.

Arctic Securities and DNB Markets are acting as financial advisors and Wiersholm is acting as legal advisor to Magseis. KWC is acting as due diligence advisors to Magseis.

This announcement is not an offer for sale of securities in the United States or any other country. The securities referred to herein have not been registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), and may not be sold in the United States absent registration or pursuant to an exemption from registration under the U.S. Securities Act. Magseis does not intend to register any portion of the offering of the securities in the United States or to conduct a public offering of the securities in the United States.

Certain statements included within this announcement contain forward-looking information, including, without limitation, those relating to) forecasts, projections and estimates, statements of management's plans, objectives and strategies for Magseis, such as planned expansions, investments or other projects, management, as well as statements preceded by "expected", "scheduled", "targeted", "planned", "proposed", "intended" or similar statements. Although Magseis believes that the expectations reflected in such forward-looking statements are reasonable, these forward-looking statements are based on a number of assumptions and forecasts that, by their nature, involve risk and uncertainty. Various factors could cause actual results to differ materially from those projected in a forward-looking statement or affect the extent to which a particular projection is realized.

No assurance can be given that such expectations will prove to have been correct. Magseis disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About Fairfied Geotechnologies
Privately held Fairfield Geotechnologies, a pioneer and global leader in ocean bottom seismic nodal technology, designs and manufactures a complete range of revolutionary, true cable-free ZLand® and ZMarine® systems and offers expert marine acquisition and data processing services. In addition to its extensive multi-client database in the Gulf of Mexico Shelf and Permian Basin, the Company continues to expand licensing coverage in the Lower 48 through focused investment and strategic acquisition of existing multi-client libraries.

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