RigNet, Inc. – RNET – Announces Acquisition of Nessco
RigNet, Inc. (Nasdaq:RNET), a leading global provider of managed remote communications solutions to the oil and gas industry, announced that it has acquired Nessco Group Holdings Ltd. (“Nessco”), an Aberdeen-based international leader in the field of telecommunications systems integration for the oil and gas industry. The acquisition broadens and strengthens RigNet’s communications offerings to the oil and gas industry, allowing the Company to provide its services over the life of the field from drilling through production, both offshore and onshore, around the globe. RigNet will also be leveraging its global footprint to bolster the international reach of Nessco’s systems integration business.
The all-cash purchase price was £29.5 million ($46.4 million) for the business and working capital, including the purchase of Nessco’s 30,000 sq. ft. headquarters facility in Aberdeen, with RigNet paying up to an additional £1.6 million ($2.5 million) through November, 2012 upon satisfaction of certain post-closing events. Assuming such post-closing events are met, the total purchase price would be £31.1 million ($48.9 million), with £26.9 million ($42.3 million) being paid for the business and Nessco’s headquarters facility plus an additional £4.2 million ($6.6 million) being paid for working capital.
“Our customers will have immediate access to a broader range of integrated communications solutions as a result of this acquisition,” said Mark Slaughter, RigNet’s Chief Executive Officer and President. ”Additionally, RigNet will now have the ability to support customers across the entire oil and gas value chain. I am also pleased that our debt refinancing for this transaction preserves our financial flexibility moving forward. This acquisition greatly expands the talent base of the RigNet family and underscores our commitment to investors and customers to grow and expand our business, both organically and through strategic acquisitions,” Slaughter continued.
The combined business will operate under the RigNet brand, though the systems integration offerings will be co-branded with the Nessco brand for the time being. RigNet’s Aberdeen operations will be moved into Nessco’s facility, with the combined Aberdeen operation to be led by Ian McPherson, currently Managing Director of Nessco. No material reductions in force are anticipated at this time and both companies expect business operations to continue as usual. Nessco’s contracts, both with clients and suppliers, will remain in force.
About RigNet, Inc. – RNET
RigNet (RNET) is a leading global provider of managed remote communications, networks and collaborative applications dedicated to the oil and gas industry, focusing on offshore and onshore drilling rigs, energy production facilities and energy maritime. RNET provides solutions ranging from fully-managed voice and data networks to more advanced applications that include video conferencing and real-time data services to remote sites in over thirty countries on six continents, effectively spanning the drilling and production industry. RNET is based in Houston, Texas.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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