Neptune Lays Foundation for Expansion in ROV Services

Neptune Marine Services has signed a Letter of Intent ("LOI") for the acquisition of Aberdeen based Submersible Technology Services (Holdings) Limited (“STS”), a leading provider of remotely operated vehicle ("ROV") and survey support services to the offshore oil and gas industry.

Under the terms of the LOI Neptune proposes to acquire the entire issued capital of STS for GBP£16 million (AUD$31.39 million) (plus an adjustment for STS working capital less debt at completion of the acquisition) with added conditional consideration based on STS's EBITDA performance for the calendar year 2009. STS is expected to be EPS accretive from date of acquisition.

The cash component of the acquisition price will be funded from the proceeds of the share placement that was announced on June 5, 2009. Approximately 91-95% of the acquisition price will be paid in cash, with the balance via the issue of Neptune's ordinary shares to a portion of the vendors who are part of STS management team. The final allocation of cash and shares will be agreed upon entry into a binding sale and purchase agreement.

Established in 1978, STS owns and operates a comprehensive fleet of inspection and work class ROVs that enable it to provide a full range of inspection, repair, maintenance, exploration drilling, survey and construction support services from offices in Aberdeen (HQ), Bahrain and Singapore.

Neptune's Managing Director and CEO, Christian Lange, said the acquisition represented a significant opportunity for Neptune to expand its well established UK and broader international presence. "The successful acquisition of STS will immediately accelerate our scale and geographic spread in the ROV market as the fleet is currently operating throughout Europe, Asia, North America and the Middle East," he revealed.

"With calendar year forecast revenues of GBP£13 million (AUD$25.5 million), an exceptional management team and a proven track record of managing consistent, profitable growth, STS will play a major role in migrating the proven Neptune model into our international target markets."

The proposed transaction is subject to the completion of satisfactory due diligence and contractual documentation. The transaction is anticipated to be completed by October 31, 2009.


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