CGGVeritas makes voluntary offer for Wavefield InseisNews // November 10, 2008
CGGVeritas has announced that it intends to make a voluntary exchange tender offer for all of the shares of Wavefield Inseis.
Wavefield is a Norwegian pure-play seismic company which operates a fleet of eight vessels and develops geophysical equipment based on fibre optic technology.
In the third quarter 2008, Wavefield revenue was US$110 million, and operating income was US$37 million.
CGGVeritas will offer eligible Wavefield shareholders one newly issued CGGVeritas share for each seven Wavefield shares.
Aggregate equity value implied by the transaction is approximately US$310 million, an implied 31 per cent premium for the Wavefield shareholders when compared to the closing price of November 7, 2008.
The transaction is immediately accretive to both EPS and cash flow per share.
The net debt coverage ratios remain unchanged post transaction.
The Board of Wavefield has unanimously welcomed the CGGVeritas offer.
The transaction strengthens CGGVeritas’ high-end fleet capability with immediate access to five recently equipped high capacity 3-D vessels. The additional complement of three mid 3-D and 2-D Wavefield vessels increases overall fleet management flexibility.
Wavefield’s Optoplan seabed fiber optic technology for reservoir monitoring expands the product offering of Sercel and accelerates market entry of next generation technologies.
Wavefield has a backlog of US$485 million, which represents approximately one year of its revenue.
Robert Brunck, Chairman and CEO of CGGVeritas, said: "I am very enthusiastic about the combination of Wavefield and CGGVeritas which will strengthen the technology position of both our Services and Equipment businesses in the high-end market. Based on its unique ability to lower the risks associated with finding and producing oil and gas, high-end seismic is more and more requested by our clients."
"With an expanded technology portfolio, a stronger industry position and the combined expertise, we will enhance our position as a preferred partner of our clients. The combination of the two companies increases our visibility further into 2009, enhances our ability to generate cash flow and provides value to our shareholders.”
Anders Farestveit, Chairman of Wavefield, stated “CGGVeritas is well placed to leverage Wavefield resources and expertise to further develop technology leadership across the full range of geophysical services and equipment. The offer will create an even stronger global leader within the geophysical industry and provide operational and commercial synergies which will benefit both Wavefield and CGGVeritas shareholders. The global leadership position will also generate new and exciting opportunities for the employees, and allow for a further strengthening of the activity level in Norway.”
The exchange offer for the entirety of the share capital of Wavefield will commence as soon as regulatory and legal conditions permit, which is currently expected to be on or about November 24, 2008.
Similarly, the offer will expire as soon as regulatory and legal conditions permit, which is currently expected to be on or about December 12, 2008.
All newly issued CGGVeritas shares will be promptly listed on NYSE Euronext Paris and the New York Stock Exchange and will have equal rights in all respects as the existing CGGVeritas shares.