ALS entered into an agreement to acquire Reservoir Group for US $533 million. Reservoir is a provider of oil and gas services and equipment that assists with the evaluation, development and optimization of oil and gas discoveries.
Reservoir operates five segments: Coring; Laboratory Analysis; Surface Logging; Downhole Tools; and Specialist Well Services. Services and equipment provided by Reservoir assist with understanding, planning, accessing and optimizing reservoir potential. Reservoir has a global presence with hub operations in Aberdeen, Dubai, Houston and Edmonton, operational infrastructure in about 40 sites covering key oil and gas provinces and over 900 employees.
The existing senior management team of Reservoir has committed to continue in the business and is rolling over approximately 50% of their equity in Reservoir into ALS shares, which will result in Reservoir senior management having a 1.5% pro forma shareholding in ALS. Multi-year conditional escrow arrangements have been put in place for the two largest management shareholders and retention bonuses have been agreed with all key Reservoir senior management.
Separately, ALS has also agreed to acquire Earth Data for about $16.6 million. Earth Data is an Australian-based provider of gas sampling and analysis services to Australia's oil and gas industries, and safety monitoring sampling and analysis for fugitive emissions to Australian coal mines. Earth Data operates laboratories in Brisbane and the Hunter Valley, and employs about 60 staff.
Completion of the acquisitions of Reservoir and Earth Data are subject to limited conditions precedent and are both expected to complete by early August 2013.
“Reservoir provides a portfolio of eight distinct diversified technical services to the global oil and gas markets, for both conventional and unconventional resources," said ALS Managing Director and CEO, Greg Kilmister. "The missing piece to Reservoir’s service offering is a strong capability in laboratory services. ALS brings that capability to the services suite and the combined businesses will provide a compelling offering. ALS intends to build at least three oil and gas hub laboratories, strategically placed to service the global market.”