Plexus, the AIM quoted oil and gas engineering services business, has completed the sale of its wellhead exploration equipment and services business for jack-up applications and the licencing of certain intellectual property to FMC Technologies (TFMC).
It has received an initial net consideration of £14,164,344.
An additional sum of up to £27,500,000 is payable dependent on the future performance of the Jack-up Business during a three-year earn-out period.
Completion of the disposal follows the signing of a conditional business purchase agreement by Plexus, Plexus' subsidiary Plexus Ocean Systems Limited (POSL) and TFMC.
Plexus, POSL and TFMC have entered into a collaboration agreement which establishes a framework for the development of existing POS-GRIP IP for applications outside of the jack-up exploration wellhead application.
Plexus' CEO Ben Van Bilderbeek said: "The disposal and collaboration agreement is a win-win for both parties. As well as achieving a sale value of up to £42,500,000 for the Jack-up Business, we gain industry recognition for our technology, which we have long claimed sets a new standard in terms of performance and safety. Furthermore, we have secured the opportunity to collaborate with a top tier company to explore potential development of additional products based on POS-GRIP.
"Encouragingly, we believe that the upward trend of the oil price in recent months, alongside indicated OPEC-led production cuts through 2018, could well be the catalyst for an uplift in oil & gas exploration activity during the three year earn-out period."
At 9:40am: (LON:POS) Plexus Holding PLC share price was +6.25p at 73.75p