Subsea 7 S.A. said it has acquires certain businesses of EMAS Chiyoda Subsea (ECS) under a U.S. bankruptcy code Chapter 11 Plan of Reorganization, confirmed by the U.S. Bankruptcy Court for the Southern District of Texas and became effective on June 29, 2017.
According to Subsea 7, it will pay less than $100 million in aggregate, including its contribution to the Debtor in Possession credit facility, to acquire the ECS businesses, the Ingleside spoolbase and other assets.
“In a challenging business environment our differentiated offering and strong capital discipline has enabled us to pursue this opportunity. This targeted investment enables Subsea 7 to accelerate its strategy to provide a market leading service in the Middle East,” said Subsea 7 CEO, Jean Cahuzac.
“The addition of people, local presence and client relationships of ECS to our market leading SURF and Conventional capability expands our global presence. As a result of this transaction we have significantly increased our presence in the Middle East, assuming a long-term agreement (LTA) and three current projects in Saudi Arabia, in consortium with L&T Hydrocarbon Engineering (L&T),” Cahuzac continued.
The acquired business includes approximately 850 people based in Houston, Singapore and Saudi Arabia.
As a result of the transaction, Subsea 7 has acquired approximately $850 million of order backlog, including five projects (three offshore Saudi Arabia, one offshore Ghana and one offshore Mexico), each with backlog exceeding $50 million.
“Subsea 7 and Chiyoda Corporation, one of the Plan of Reorganization sponsors and a previous shareholder of ECS, have started discussions regarding possible collaboration in engineering and technology initiatives to provide solutions to our clients,” Cahuzac said.
The financial results of the acquired entities will be consolidated within Subsea 7’s SURF and Conventional Business Unit effective June 29, 2017.