CorrOcean Acquires Roxar

CorrOcean ASA has entered into an agreement with an affiliate of Arcapita Bank to acquire 100% of Stavanger-based Roxar AS and its affiliates and subsidiaries for a price representing an enterprise value of NOK 2,220 million.

The strategic fit between CorrOcean and Roxar is excellent, and the opportunity of combining the market leader in subsea multiphase and wetgas metering with the market leader in subsea sand monitoring is attractive, not least in light of the strong market growth prospects, says Hans Olav Torsen, Chairman of CorrOcean. In addition, Roxar represents a major step up in business activity, product portfolio, sales and marketing network and management capacity for CorrOcean.

Roxar has more than 700 highly qualified employees and sales offices in 26 countries worldwide. The company is a world-class topside, subsea and downhole instrumentation company, which serves to optimize the production flow from oil and gas wells, and is also a leading player in reservoir modelling.

The acquisition boosts CorrOcean's turnover from NOK 152 million to NOK 1,098 million on a pro-forma basis in 2006, and from NOK 37 million to NOK 299 million on a pro-forma basis in the 1st quarter of 2007. Also, EBITDA increases from reported NOK 20 million to NOK 130 million on a pro-forma basis in 2006, and from NOK 2 million to NOK 41 million on a proforma basis in the 1st quarter in 2007. Going forward, the combined company expects to double revenues over the next three years' period and improve margins as a result of increased production and distribution efficiency and realization of synergy gains.

Both CorrOcean and Roxar agree that this is truly a unique opportunity to create a world class instrumentation company in a high growth market, driven both by an increasing number of subsea installations and technology penetration. In parallel, the software division of Roxar has a leading position in its segment and is well positioned for further growth and for realization of its full value potential.

The acquisition will be funded by a pre-subscribed private placement of NOK 781 million at a subscription price of NOK 6.0 per share, a guaranteed offering of NOK 319 million directed to current shareholders in CorrOcean at NOK 6.0 per share, a pre-subscribed convertible debt of NOK 200 million and senior bank debt of NOK 1,100 million provided by DnB NOR and Fokus Bank. The transaction is expected to be completed during July 2007, and is subject to EGM approval of CorrOcean.

Fondsfinans has acted as financial advisor and manager for CorrOcean, and Pareto Securties has acted as co-manager in the placement.


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