Result of General Meeting

RNS Number : 6650V

Plexus Holdings Plc

06 November 2017

 

 Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil equipment & services

6 November 2017

Plexus Holdings PLC ('Plexus' or 'the Company')

Result of General Meeting re

Sale of Jack-up Wellhead Exploration Applications Business to TechnipFMC

Plexus Holdings PLC, the AIM quoted oil and gas engineering services business and owner of the proprietary POS-GRIP® friction-grip method of wellhead engineering, is pleased to announce that the resolution put to shareholders (the "Resolution") at the General Meeting of the Company held earlier today was duly passed, with 99.8 per cent of the votes cast being in favour of the Resolution.

Following the passing of the Resolution, the proposed Sale of the Company's Rental Wellhead Exploration for Jack-Up Applications Business (the "Jack-up Business") to FMC Technologies Limited ("TFMC"), a subsidiary of leading oil & gas services and equipment company TechnipFMC (Paris:FTI)(NYSE:FTI), will now, subject to the finalisation of the remaining conditions, proceed to Completion ('the Disposal'). 

As previously announced, the Disposal is in line with Plexus' strategy of increasing industry awareness of its POS-GRIP friction grip technology.  This focus  has initially  been on proving the superior qualities of Plexus equipment within the jack-up wellhead exploration market, where to date its technology has been deployed on hundreds of wells worldwide, before targeting other markets such as surface production, subsea and de-commissioning. The Board of Plexus believes that the Disposal represents a significant milestone for the Company as it demonstrates the attractiveness of its POS-GRIP technology.

The Disposal follows the signing of a conditional Business Purchase Agreement ("BPA") by Plexus, POSL and TFMC, under which the Plexus Group will receive an initial gross cash consideration of £15,000,000, subject to certain stock related adjustments, with an additional sum of up to £27,500,000 payable dependent on the future performance of the Jack-up Business during a three-year earn-out period. The earn-out has the potential to increase the total consideration value to £42,500,000.

As part of the transaction, Plexus' subsidiary POSL and TFMC will also importantly be entering into a Collaboration Agreement which establishes a framework through a joint Steering Committee to work together both on the development of existing POS-GRIP IP for applications outside of jack-up exploration, as well as future new technologies.

The focus of the business following Completion will be:

1.    Continued operation of remaining business, contracts and products

The Company will continue to focus on projects which are not part of the Disposal, and will pursue the development of opportunities with existing products such as POS-GRIP "HG" production wellheads where a new production wellhead contract for Centrica was announced some weeks ago.

2.    Maximisation of Earn-out from the Jack-Up Business

The Company intends to prioritise the maximisation of earn-out revenues from the Jack-Up Business through the provision of, inter alia, sales and technical support to TFMC.

3.    Work with TFMC through the scope of the Collaboration Agreement and the joint Steering Committee on key POS-GRIP products

The Company and TFMC have reviewed certain topics that can be suited for joint work under the Collaboration Agreement. Should discussions progress this could lead to further commercial IP led opportunities.

4.    Design/Development of new and existing POS-GRIP products/applications

The Company has identified a number of products and applications which it believes would benefit from the integration of POS-GRIP technology. The Company intends to selectively apply its resources to capitalise on these opportunities, examples of which include:

o  Existing applications of POS-GRIP "HG" Wellheads, such as HP/HT Production Wellheads and Adjustable Production Wellheads

o  New applications of POS-GRIP "HG" Wellheads and other IP, such as land wellheads, fracking heads, geothermal systems and well abandonment and decommissioning

o  Existing applications for the Python subsea wellheads system, such as Deepwater exploration drilling, and HP/HT production

o  Further developments around the Python subsea system, such as Annulus Access capability and subsea Xmas Trees.

5.    Research & Development

Plexus has always been an innovative IP-led business and the Board intends to devote appropriate resources to continue its ongoing innovative and proprietary technology driven approach.

Completion of the Disposal requires a number of conditions to be satisfied or waived between exchange and the long stop date of 6 months after the date of exchange, including receipt by the Company or POSL of novation agreements in respect of key business contracts identified by TFMC. These rights may be waived in the event that they are not satisfied. The BPA includes certain termination rights in the event of a material adverse change in the Jack-Up Business between exchange and Completion.

Further details of, inter alia, the background to and reasons for the Disposal are set out in the notification made by the Company on 19 October 2017, and in the circular which was posted to shareholders shortly thereafter.  The circular is available on the Company's website at www.plexusplc.com.  Terms defined in the circular have the same meanings in this announcement.

**ENDS**

For further information please visit www.posgrip.com or contact:

Ben van Bilderbeek	Plexus Holdings PLC	Tel: [phone]
Graham Stevens	Plexus Holdings PLC	Tel: [phone]
Derrick Lee	Cenkos Securities PLC	Tel: [phone]
Frank Buhagiar	St Brides Partners Ltd	Tel: [phone]
Isabel de Salis	St Brides Partners Ltd	Tel: [phone]

 

END

 

 

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