Reach Subsea — M&A Activity 2022

Feb 17, 2022

Reach Subsea acquires offshore survey company iSURVEY for NOK 135 million

Reach Subsea acquires offshore survey company iSURVEY for NOK 135 million

Reach Subsea acquires offshore survey company iSURVEY for NOK 135 million

Haugesund, 17 February 2022: Reach Subsea ASA (“Reach”), a provider of subsea services globally, today announced that the Company has entered into an agreement with iSURVEY Holding AS to acquire ISURVEY Group AS (“iSURVEY”), a provider of offshore high-quality survey services, for NOK 135 million.

“With the acquisition of ISURVEY, we are developing Reach Subsea into a larger, more robust, fully integrated company, with strengthened in-house data management and data processing capabilities. This will enable us to take on larger subsea projects on a global scale and accelerate our expansion into emerging new industry verticals, such as offshore wind,” said Jostein Alendal, CEO of Reach Subsea. “Through our long-standing relationship with iSURVEY, we know the two organizations are a good cultural fit, as well as complementing each other’s technology offerings and customer portfolios.”

Under the terms of the agreement, Reach will acquire iSURVEY Holdings AS’ 100% interests in iSURVEY for NOK 135 million on a neutral working capital and debt basis. iSURVEY Holding AS is owned 72% by Norvestor VI, LP’s, a fund managed by Norvestor Investment Management S.a.r.l., while the company’s management team and current and former employees hold the remaining 28%. The transaction will be settled through the issuance of 33.8 million shares in Reach, valued at NOK 3.25 per share, and NOK 25 million in cash. The consideration shares issued to iSURVEY Holding AS will be subject to lock-up until 10 December 2022. Following completion of the transaction, and completion of the NOK 150 million private placement towards Wilhelmsen New Energy AS (see separate stock exchange release published today), iSURVEY Holding AS will become a 15% shareholder in Reach. The transaction will be presented for approval at an extraordinary general meeting in Reach expected to be held on or about 14 March 2022. Subject to approval and fulfilment of other customary closing conditions, the transaction is expected to close in the first quarter of 2022.

In summary, the transaction presents the following strategic benefits:

• Strengthens Reach’s data management and data analytics capabilities, providing the company with a platform to become a full-service provider of subsea data and solutions for clients globally.

• Optimizes Reach’s project portfolio, improving earnings visibility and stability.

• Enables Reach, through the combined offerings of the two companies, to operate full survey spreads on multiple vessels.

• Increases Reach’s revenue potential and margins through expanded service offerings to both existing and new client segments, and creates significant revenue synergies from the cross-selling of Reach and iSURVEY’s services to each other’s customer base.

• Strengthens the Company’s inhouse software and competence for the Reach Remote unmanned surface vessels (USV), scheduled for delivery in 2023. By 2025, Reach’s ambition is to provide a full portfolio of subsea services from a low-emission, cost-effective remote and autonomous fleet.

• Enhances Reach’s presence and offering to the renewable energy sector, which represents 50% of iSURVEY’s revenues.

• Adds a strategic pillar and operating team of over 100 world-leading offshore surveyors and project management specialists in their field to advance Reach’s broader strategy for technology and data processing, as well as adding key competence required for gathering and processing of seabed survey data.

Established in 2004, iSURVEY’s services cover all phases required to convert geophysical data into value. Marrying expert technical knowledge with state-of-the art technology, Billingstad, Norway-based iSURVEY offers a whole range of offshore services. These include seabed survey/IRM services, offshore cable installations, rig moves and mooring, and marine construction. iSURVEY’s customers are global oil & gas, renewable energy and telecommunications companies. iSURVEY has bases in Norway, Singapore and the UK, which allows the company to provide a rapid, responsive service, deploying services and personnel to all regions of the globe.

“We are excited to be joining forces with Reach, whose commercial and technical track record, and global growth trajectory in recent years, has impressed us immensely. By combining our service offerings, we will create a leading global full-service provider of subsea data and solutions for all types of offshore assets, throughout the lifecycle,” iSURVEY co-founder and CEO Øivind Røegh said.

“We strongly believe in the combination between Reach and iSURVEY. The two companies have complimentary capabilities, and the organizations know each other well from working together on several projects. Over the last years, iSURVEY has focused on developing into new market segments, and Reach can realize the full potential of iSURVEY’s investments in data management and data processing capabilities, as well as the investments in remote operation capabilities. Reach will also benefit from iSURVEY’s strong position within the offshore wind and subsea cable markets,” said Are Stenberg, Investment Director in Norvestor Advisory and chairman of the board of directors of iSURVEY Holding AS.

The election committee of Reach will propose to the Annual General Meeting that Arvid Pettersen, board member of iSURVEY Holding AS, is elected as a new board member of Reach. The proposal is supported by Reach’s existing major shareholder, North Energy ASA.

Advokatfirmaet Schjødt AS acted as legal advisor and Fearnley Securities AS as financial advisor to Reach in the transaction.

Reach invites to a webcast presentation of the iSURVEY acquisition and the partnership agreement with Wilhelmsen tomorrow, Friday 18 February 2022, at 10:00 CET.

Reach Chairman Rachid Bendriss will host the presentation in English, on this direct link:

https://channel.royalcast.com/landingpage/hegnarmedia/20220218_10/

A recorded version of the presentation will be available after the live stream is concluded. Participants will have the opportunity to submit questions online throughout the webcast session.

For further information, please contact:

Jostein Alendal, CEO, jal@reachsubsea.no

Birgitte Wendelbo Johansen, CFO, bwj@reachsubsea.no

About Reach Subsea:

Reach Subsea ASA Group offers subsea services as a subcontractor and/or directly to end clients, based out of our head office in Haugesund. The core business of the Group is based on modern, high spec Work ROVs operated by highly-qualified offshore personnel, and supported by onshore engineering resources. The Group’s objective is to be a preferred subsea partner and full-service provider of subsea operations for clients, focusing on safety, environment, financial solidity and profitability.

www.reachsubsea.no