KBC Advanced Technologies plc Acquisition (9253M)
July 22 2014 - 2:00AM
UK Regulatory
TIDMKBC
RNS Number : 9253M
KBC Advanced Technologies plc
22 July 2014
Embargoed until 0700 hrs 22 July 2014
KBC announces acquisition of FEESA Ltd
Further expansion into the upstream oil and gas software and
services market
KBC Advanced Technologies plc ("KBC" or "the Group") is pleased
to announce that it has purchased FEESA Ltd ("FEESA"), a leading
UK-based provider of specialised software and services to the
upstream oil and gas industry, for an enterprise value of GBP10
million plus one million KBC shares, totalling GBP11.2 million.
The acquisition of FEESA marks the next step in KBC's growth
strategy to expand into the upstream oil and gas industry. Key
benefits of the transaction include:
-- KBC now being able to offer profit improvement and business
transformation programmes, underpinned by technology, across the
full hydrocarbon value chain. FEESA's Maximus(TM) software, when
integrated with KBC's Multiflash(TM) and Petro-SIM Production(TM)
technologies, completes the KBC software simulation suite from
reservoir through to refinery.
-- KBC's consulting services moving further upstream. FEESA
brings to KBC a leading position in the provision of specialised
software and consulting for the development and production segments
of the upstream oil and gas industry. Its Maximus software is a
well-established oil and gas well bore and production pipeline
modelling system and is accompanied by an expert flow assurance
consulting team that has helped leading operators in the world
solve complicated production challenges.
-- A simple integration of this capability into KBC's platform
as Maximus already uses KBC's Multiflash PVT engine for its
component and chemistry predictions and has been further integrated
with KBC's Petro-SIM Production simulator to provide life cycle
value through wells, pipelines and processing facilities.
-- Sales of Maximus and associated consulting benefiting from
KBC's existing international customer relationships as well as its
sales and marketing channels.
The flow assurance market in oil and gas development is growing
strongly as oil and gas companies seek to explore further and
deeper offshore to maintain reserves and production. The
combination of KBC's and FEESA's technologies and consulting allows
an oilfield service company or an upstream operator to understand
the full impact of changes within reservoir management and
production optimisation programmes in order to achieve improved
efficiency in field development worth hundreds of millions of
dollars.
The acquisition has been funded from the Group's recent equity
placing and is expected to be earnings enhancing for the Group in
the first full year of ownership. The cash consideration for the
acquisition is GBP10 million, payable on completion. The equity
consideration for the acquisition is one million (1,000,000) new
ordinary shares in KBC ranking equally with the existing share
capital of KBC. Half of these consideration shares are subject to
selling restrictions for 12 months from the date of acquisition
with the remainder restricted for a further 12 months. Application
will be made for the shares to be admitted to trading on AIM, with
admission of the shares expected to occur on 28 July 2014.
In its financial year to 31 March 2014 FEESA reported a profit
before tax of GBP0.5 million on revenues of GBP2.3 million,
The two founding shareholders of FEESA, Dr Martin Watson and Dr
Neil Hawkes, who will remain active in the business, will hold
senior positions within the enlarged Group following acquisition
and will be focused on increasing KBC's upstream consulting and
technology revenue as well as further establishing Maximus,
Multiflash and Petro-SIM as standards for the industry.
Dr Martin Watson, Managing Director at FEESA, commented,
"KBC offers FEESA an environment for growth and leverage with a
first class Technical Consulting reputation and an innovative
software development culture. We have been impressed with the
results from KBC's Infochem acquisition and feel a triangulation of
the three businesses offers the oil and gas industry very
compelling value in the design, development and operation of oil
and gas fields."
Ian Godden, KBC's Executive Chairman, added,
"We are very pleased to welcome FEESA's respected technology and
consulting team to the Group. This important acquisition adds
further critical mass in consulting for the upstream market segment
and in the software business to help KBC to achieve its stated
objective of increasing revenue from these areas.
"This strategic acquisition enables KBC to span the entire
hydrocarbon value chain with technical and business transformation
consulting underpinned by deep software IP. We expect the software
business in particular to benefit from the synergies of an enhanced
value suite applicable to the upstream sector.
"The recent share placing demonstrates the support of KBC's
shareholders for our current strategy of investment for growth and
this acquisition affirms KBC's ability to deliver on that
journey."
-Ends-
KBC Advanced Technologies plc
Ian Godden, Executive Chairman
Andrew Hebb, Interim Chief Financial Officer +44 1932 236314
Cenkos Securities plc
Bobbie Hilliam/Harry Pardoe +44 20 7397 8900
Weber Shandwick Financial
Nick Oborne/Tom Jenkins +44 20 7067 0000
About KBC
KBC is a leading consultancy and software provider to the global
hydrocarbon processing industry. With over 30 years of experience,
KBC combines industry leading technology with experienced engineers
and operations personnel using robust methodologies to create
personalised, sustainable solutions for its clients. For more
information, visit www.kbcat.com.
To contact any of our offices, please visit
http://www.kbcat.com/locations.
About FEESA
FEESA is a flow assurance and integrated production modelling
consultancy and software provider for the upstream oil and gas
industry. FEESA and its software (Maximus) make such studies easier
to do, more thorough and more understandable, improving the
efficiency with which flow assurance and integrated production
modelling can interface with other key disciplines (such as
reservoir, process, pipelines, wells, drilling and corrosion). For
more information on FEESA please visit www.feesa.net
This information is provided by RNS
The company news service from the London Stock Exchange
END
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