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SembMarine to buy Sevan Marine's intellectual property in US$28m deal to end legal dispute
SEMBCORP Marine (SembMarine) plans to buy the intellectual property of Norway’s Sevan Marine for US$28 million and bring an end to a long-standing intellectual property dispute between the two parties, according to a Friday morning announcement on the Singapore Exchange.
As part of the deal, SembMarine will also acquire a 95 per cent equity interest in HiLoad LNG, a Sevan Marine subsidiary which holds certain intellectual property rights; accept the transfer of 26 Sevan Marine employees; and assume operating costs, including unexpired leases, of the company's three office locations.
The deal, done through SembMarine's wholly owned unit Sembcorp Marine Integrated Yard, means that SembMarine will also undertake to take over some of Sevan Marine’s existing service and engineering services contracts that have outstanding licence fees payable to Sevan Marine.
If Sevan Marine receives a binding offer from another party for the proposed transaction for a cash price that is at least 10 per cent higher, SembMarine shall have the right, but not an obligation, to match such an offer. Should the asset sale be terminated by Sevan Marine due to an offer from elsewhere, it will reimburse SembMarine "reasonable transaction costs". Litigation between the SembMarine and Sevan Marine in the US courts will then continue, SembMarine said.
SembMarine, which called the deal a "strategic acquisition", said that the litigation will be terminated if the acquisition is completed.
Sevan Marine, which is listed on the Oslo Bourse, specialises in the design, engineering and project execution of floating units for offshore applications. Their main product is a cylindrical platform used for floating production and drilling.
"Sembcorp Marine will be well placed with a suite of intellectual properties and knowledge to execute leading-edge design and engineering solutions for the global offshore and marine sectors. This puts the company in a better position to offer alternative solutions to customers and partners," SembMarine said.
The asset sale must be approved by the shareholders of Sevan Marine and certain third parties by Dec 31, 2018.