Completed deal paves way for TerraStar joint venture with Topcon
3D design and measurement firm Hexagon AB said Thursday its cash offer for shares of Veripos Inc., a manufacturer of satellite navigation and positioning systems for offshore oil companies, has now earned it a 95.8 percent stake.
As part of the planned acquisition, Hexagon announced last Thursday a deal with Japan-based positioning and navigation firm Topcon to be a reseller of the satellite broadcast correction signal offered by Veripos subsidiary TerraStar GNSS Ltd. The deal also calls for Hexagon and Topcon to create a joint venture to grow the TerraStar business.
Based in Stockholm, Sweden, Hexagon said it plans to leverage Veripos’ portfolio for its onshore-based client base, while continuing Veripos’ offshore strategy. Veripos sells navigation and positioning hardware and software for segments of the offshore industry, including seismic exploration, survey and construction, dynamic positioning marine and dynamic positioning drilling. Its positioning network is controlled and operated by over 80 GNSS reference stations.
Hexagon is offering a 37 Norwegian kroner (US$6) per share price – a 61 percent premium over an original October offer it made and a 95 percent premium over the weighted average share price for the year before that. The offer price values Veripos at NOK1.2 billion ($200 million).
Hexagon’s unconditional cash offer expired Wednesday but was then extended to Feb. 7. Now that it owns more than 66 percent of Veripos shares, Hexagon said it will complete a compulsory acquisition of any minority shares in Veripos is does not own, a provision under Cayman law through a so-called “long-form merger.”
The bidding for Veripos began in October when Hexagon offered Veripos shareholders about NOK 28 ($4.91) for each share, about 22 percent more than Veripos’ previous stock closing price. A month later, Topcon, along with Veripos’ largest shareholder Siem, offered a 7 percent premium to Hexagon’s offer.
Veripos was spun off from Siem subsidiary Subsea 7 Inc. in 2012, when Siem became Veripos’ largest shareholder with 21 percent ownership. Siem operates through its subsidiaries serving the oil and gas, ocean transportation and shipping industries.
Hexagon upped its unconditional offer in December from its first bid, and said Thursday it now has acceptances and pre-acceptances from shareholders, in addition to shares it currently owns, of 95.8 percent of outstanding Veripos shares.
Formed in 2012, TerraStar is a GNSS augmentation service targeted at land and near- shore applications in the agricultural, forestry, land oil and gas exploration and production, mining, aerial survey, construction, land survey, GIS, and near-shore dredging sectors.
TerraStar provides two levels of accuracy: TerraStar D is a decimeter service utilizing Precise Point Positioning (PPP) algorithms and broadcasts on seven independent satellites with overlapping coverage, providing a minimum of two geostationary satellites at most locations in the world. The TerraStar M service, which is a meter-level service available via enabled receivers.
TerraStar is the contractual partner for all resellers and customers of Veripos’ on-shore services including the signal. At least three firms are already reselling TerraStar integrated receivers for land, air and near shore applications, including NovAtel Inc., Altus Positioning Systems, and Septentrio Satellite Navigation.
GNSS manufacturers Septentrio and Altus have incorporated the TerraStar algorithms into their hardware allowing users to access the TerraStar corrections broadcast via satellite to determine position anywhere in the world.NovAtel sells the TerraStar correction service directly to customers for land, air and near-shore applications.
A Hexagon representative told SPAR the MoU with Topcon does not preclude other companies from reselling the TerraStar signal.
