Acquisition of Infochem (6345F)
June 19 2012 - 2:00AM
UK Regulatory
TIDMKBC
RNS Number : 6345F
KBC Advanced Technologies plc
19 June 2012
19 June 2012
KBC announces GBP9.5 million acquisition of Infochem
First step in strategy of expansion into the upstream oil
and
gas software and services market
KBC Advanced Technologies plc ("KBC" or "the Group") is pleased
to announce it has purchased Infochem Computer Services Limited
("Infochem"), a leading provider of specialised software and
services to the upstream oil and gas industry, for an enterprise
value of GBP9.5m.
The acquisition of Infochem is the first step in KBC's growth
strategy to both expand into the upstream energy industry and
increase software sales as a proportion of overall sales. It
provides KBC with a leading position in the provision of
specialised software used in the development and production
segments of the upstream oil and gas industry. This complements
KBC's reputation as a leading provider of specialised software and
services to the downstream oil and gas market.
Infochem brings to the Group rich software and intellectual
property ("IP") in the chemistry of oil and gas fluids that enables
accurate modelling of reservoir fluids to maximise production -
"flow assurance". The flow assurance market in oil and gas
development and production has been buoyant in recent years, with
application both in conventional and alternative unconventional oil
and gas production.
The combination of KBC's detailed engineering, process
simulation and energy management technologies with Infochem's
capability and understanding of reservoir and production fluids
behaviour will provide the enlarged group with a powerful set of
engineering software solutions for use in both the upstream and
downstream sectors of the oil and gas industry. The combination of
the two companies will also deliver strong synergies by combining
their software development and sales functions and through the
ability of Infochem's flow assurance models to expand the reach of
KBC's Petro--SIM(TM) software into the upstream market. The
enlarged Group's clients include asset owners, operators, oilfield
service companies and EPC contractors.
The acquisition will be earnings enhancing for the Group in
2012.
The acquisition cost for all of the issued shares of Infochem is
GBP10.9m, payable in cash in two instalments: GBP9.0m paid on
completion and GBP1.9m in 3% guaranteed loan notes which are
redeemable 12 months after completion. The initial payment will be
funded by existing KBC cash resources and new bank debt of GBP6.0m
repayable over a three year period with an interest rate of 1.75%
above Libor. In its last financial year to 31 July 2011 Infochem
reported revenues of GBP1.2m, with profit before tax of GBP0.6m. At
the time of acquisition Infochem held GBP1.3m cash and net assets
were GBP1.5m. The results of Infochem for the year ended 31 July
2012 are expected to show a substantial increase over the prior
year figures, with management figures after the first nine months
showing profit before tax ahead of the previous year.
Two of the three founder shareholders of Infochem who remain
active in the business will remain with the Group to assure rapid
and effective delivery of the integration synergies and to drive
the continued development of the IP. Infochem's Managing Director,
Philip Birch, will work with KBC for a period of six months on a
part-time basis to assist in managing the handover of client
relationships.
Philip Birch commented, "KBC's vision of unified simulation from
upstream oil and gas through to downstream is a strong fit with
Infochem's vision of production and process management integration
through high-accuracy compositional modelling. The combination of
both companies' technology creates a unique suite of
thermodynamics, flow assurance, process simulation and energy
management technologies and services that provides a step change
for the oil and gas sector. In addition, access to KBC's
significantly larger global network to market and distribute
Infochem's software will deliver significant growth
opportunities."
George Bright, KBC's Chief Executive, also commented, "We are
very pleased to be able to add Infochem's well-regarded and
sought-after technology in upstream oil and gas to the existing
suite of KBC software in order to expand our activities into the
upstream energy industry and secure a further technology advantage
in the rapidly growing flow assurance market sector. The
acquisition of Infochem demonstrates KBC's commitment to being a
key software supplier to the energy industry from oil and gas
extraction through downstream processing."
Cenkos Securities plc acted as financial advisor to KBC on the
acquisition of Infochem.
-Ends-
KBC Advanced Technologies plc
George Bright, Chief Executive
Nicholas Stone, Finance Director +44 1932 236314
Cenkos Securities plc
Jon Fitzpatrick +44 20 7397 8900
Neil McDonald +44 131 220 9771
Weber Shandwick Financial
Nick Oborne/Stephanie Badjonat/Robert Cook +44 20 7067 0700
About KBC
KBC is a leading consultancy and software provider to the global
energy, process and natural resources sectors. With over 30 years
of experience, operating out of 14 global locations, KBC combines
best-in-class software with experienced engineers and operations
personnel using robust methodologies to create world class
solutions for its clients.
About Infochem
Based in London, established for over 25 years and with over 350
customers in the sector, Infochem is a strong independent supplier
of software and IP in the chemistry of oil and gas fluids that
enables accurate modelling of reservoir fluids to maximise
production from reservoirs, into the well bore and production
systems, as well as through related processing facilities.
Infochem's products are used by operators, oilfield service
companies and EPC contractors.
For more information, visit www.kbcat.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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