Hexagon to push for reseller deal with Topcon
A day after Hexagon announced joint venture plans with Topcon, the 3D imaging firm said Friday its cash offer for shares of Veripos Inc., a manufacturer of satellite navigation and positioning systems for offshore oil companies, has earned it a 51.2 percent stake.
Based in Stockholm, Hexagon is offering a 37 Norwegian kroner (US$6) per share price – a 61 percent premium over Hexagon’s original October offer and a 95 percent premium over the weighted average share price for the 12 months before that. The offer price values Veripos at NOK1.2 billion ($200 million). The unconditional cash offer expires Wednesday but can be extended to Feb. 7.
Veripos’ products and services include 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. Veripos operates and controls its positioning network with over 80 GNSS reference stations.
Hexagon plans to leverage Veripos’ products and services for the onshore-based client base of Hexagon, while continuing the offshore strategy of Veripos.
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, Japan-based, positioning and navigation firm 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 twice since its first bid, resulting in acceptances and pre-acceptances from shareholders, in addition to shares Hexagon currently owns, of 51.2 percent of outstanding Veripos shares.
Top 5 shareholders in Veripos as of Dec. 31, 2013
- Hexagon – 27.4 percent
- Siem Industries Inc – 21.1 percent
- Folketrygdfondet – 9.6 percent
- Deutsche Bank – 4.9 percent
- Goldman Sachs – 4.6 percent
Last Thursday, Hexagon announced a Memorandum of Understanding with Topcon to arrange a customer agreement under which Topcon will act as a reseller of the satellite broadcast correction signal offered by Veripos subsidiary TerraStar GNSS Ltd.
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.
Hexagon also said under the terms of the MoU, it will establish a separate joint venture with Topcon to grow the development and expansion of services provided by TerraStar.