OSLO, NORWAY: Carbon Transition ASA has signed an agreement to sell company’s seismic node on a rope business to Magseis Fairfield ASA.
“In light of Carbon Transition’s new strategic direction, we believe our node on a rope operation will be more optimally utilized as a part of the Magseis Fairfield system and thereby maximize the market potential of the node on a rope equipment,” a statement noted.
The sale does not include the multiclient business of Carbon Transition and the company thereby retains the full upside of the Utsira and the Gulf of Suez multiclient surveys.
As evident through recently announced multiclient sales to several parties, the market for our multiclient library has significantly improved the last few months and we expect significant cash flow from this asset going forward.
Following the sale of the node on a rope business, Carbon Transition will be a company with low cash burn and financial investments in attractive businesses. The sale will allow the company to fully focus on maximizing returns from the attractive multiclient library in tandem with growing its presence in the energy transition space.
The transaction with Magseis Fairfield is structured based on an earnout model. Carbon Transition will receive USD 0.5 million at closing and will additionally receive earnout payments over a three-year period conditioned on the utilization of the equipment acquired. The earnout payments are capped at a maximum of USD 12.0 million and have a minimum payment clause of USD 1.5 million, subject to certain milestones.
The completion of the transaction remains subject to customary closing conditions which is expected to be lifted by 31 March 2022.
SpareBank 1 Markets acted as M&A advisor to Carbon Transition ASA.