Medserv plc – Acquisition of METS Group of Companies
Medserv plc has announced that it has entered into a conditional share purchase agreement for the acquisition of the entire issued share capital of the following companies:
a) Middle East Tubular Services Limited, a limited liability company incorporated under the laws of the British Virgin Islands and having a branch registered in Sharjah, United Arab Emirates (METS);
b) Middle East Tubular Services (Iraq) Limited, a limited liability company incorporated under the laws of the British Virgin Islands and having a branch registered in Iraq (METS Iraq); and
c) Middle East Tubular Services LLC, FZC, a limited liability free zone company registered in the Sohar Free Zone, The Sultanate of Oman, United Arab Emirates, (METS Oman).
METS, METS Iraq and METS Oman shall be collectively referred to as the “METS Group”.
The METS Group provides and operates a comprehensive threading, repair, inspection and storage service for oil country tubular goods (OCTG). It maintains three sites namely in Sharjah, Oman and in Basra, Iraq having a total area of 292,000 square metres. The METS Group are in possession of both API® and VAM ® certifications, which are certifications designed for the more technically demanding thread connections required by today’s high pressure, high temperature wells.
This acquisition presents an opportunity for the Medserv Group to increase its scope of services to customers and to enter the well-established Middle Eastern oil and gas service industry in a region where extraction costs are comparatively low. Medserv considers METS to fit with its longer-term strategy of increasing its geographical spread and product spread as well to continue to grow its customer
portfolio of international oil and gas companies and subcontractors. METS similar to Medserv operates in growth countries.
The acquisition will present Medserv with cross selling opportunities. Medserv will be looking at selling its services within the Middle East region as well as introducing and
marketing the services of METS to markets currently serviced by Medserv, primarily North Africa and the Eastern Mediterranean rim countries.
Services between METS and Medserv do intersect but whereas Medserv concentrates on the offshore oil and gas industry, METS tends to support the onshore oil and gas
industry. Synergies are expected to be achieved by combining the two groups together.
The Company has registered a subsidiary company with the name Medserv M.E. Limited (the Purchaser) for the purpose of acquiring and holding the issued share capital of the METS Group. In addition, in order to provide for an efficient transfer of the shares in the METS Group, the Sellers have agreed to incorporate a holding company in the British Virgin Islands which company shall act as a parent company to the METS Group (Holdco). Upon satisfaction of all conditions precedent, the Sellers have agreed to transfer the issued share capital of Holdco to Medserv M.E. Limited.
Further details of the transaction are provided in the full Company Announcement. To view the full Company Announcement, click here.