Oil and Gas Remote Communications Provider Broadens Offerings
With Purchase of Recognized Telecommunications Systems
HOUSTON, July 5, 2012 (GLOBE NEWSWIRE) -- RigNet, Inc. (Nasdaq:RNET), a
leading global provider of managed remote communications solutions to
the oil and gas industry, announced today that it has acquired Nessco
Group Holdings Ltd. ("Nessco"), an Aberdeen-based international leader
in the field of telecommunications systems integration for the oil and
gas industry. The acquisition broadens and strengthens RigNet's
communications offerings to the oil and gas industry, allowing the
Company to provide its services over the life of the field from
drilling through production, both offshore and onshore, around the
globe. RigNet will also be leveraging its global footprint to bolster
the international reach of Nessco's systems integration business.
The all-cash purchase price was POUND29.5 million ($46.4 million) for
the business and working capital, including the purchase of Nessco's
30,000 sq. ft. headquarters facility in Aberdeen, with RigNet paying up
to an additional POUND1.6 million ($2.5 million) through November, 2012
upon satisfaction of certain post-closing events. Assuming such
post-closing events are met, the total purchase price would be
POUND31.1 million ($48.9 million), with POUND26.9 million ($42.3
million) being paid for the business and Nessco's headquarters facility
plus an additional POUND4.2 million ($6.6 million) being paid for
"Our customers will have immediate access to a broader range of
integrated communications solutions as a result of this acquisition,"
said Mark Slaughter, RigNet's Chief Executive Officer and President.
"Additionally, RigNet will now have the ability to support customers
across the entire oil and gas value chain. I am also pleased that our
debt refinancing for this transaction preserves our financial
flexibility moving forward. This acquisition greatly expands the talent
base of the RigNet family and underscores our commitment to investors
and customers to grow and expand our business, both organically and
through strategic acquisitions," Slaughter continued.
The combined business will operate under the RigNet brand, though the
systems integration offerings will be co-branded with the Nessco brand
for the time being. RigNet's Aberdeen operations will be moved into
Nessco's facility, with the combined Aberdeen operation to be led by
Ian McPherson, currently Managing Director of Nessco. No material
reductions in force are anticipated at this time and both companies
expect business operations to continue as usual. Nessco's contracts,
both with clients and suppliers, will remain in force.
In connection with this transaction, RigNet has entered into an amended
and restated secured credit facility with Bank of America, N.A., and
BBVA Compass. The credit facility provides for a $66.4 million term
facility and $10.0 million revolving facility. The Company had $19.2
million outstanding immediately prior to the amendment and restatement
and $66.4 million outstanding immediately after, giving effect to the
amendment and restatement. The term facility matures in July, 2017 and
requires quarterly scheduled principal amortization of $2.4 million
commencing September, 2012 through March, 2017, with the remainder due
at maturity. The revolving facility matures in July, 2017 with any
outstanding borrowings then payable. Borrowings under both the term and
revolving facilities carry an interest rate of LIBOR plus an applicable
margin ranging from 2.25% to 3.50%, which varies as a function of the
Company's leverage ratio. The revolving facility, subject to a
borrowing base calculation based upon eligible receivables, can be used
for working capital, performance bonds and letters of credit. The
credit facility contains customary covenants that restrict, among other
things, the Company's ability to obtain additional debt financing and
to pay cash dividends. The credit facility also contains financial
covenants that the Company must meet, including leverage and fixed
charge ratios. The loans under the credit facility are secured by
substantially all of the assets of the Company and its domestic
Established in 1979, Nessco designs, builds, installs and commissions
client telecommunications systems encompassing the full spectrum of
technologies including fiber optic, digital radio, voice and data
networks, closed circuit television, marine communications and
satellite networks. With more than 120 employees and dedicated
contractors, Nessco operates worldwide and has been engaged in major
projects in the United Kingdom, Continental Europe, North and South
America, Africa, Middle East and Asia Pacific.
"We are excited to join the RigNet family and consider this transaction
a win-win for both organizations," said McPherson. "We look forward to
combining with RigNet's team in Aberdeen and across the globe to
deliver a broader array of services and products to a greater customer
base while also helping the combined company become a more diversified
provider to the entire oil and gas space."
Nessco was advised by Simmons & Company International Limited.
A conference call for investors will be held at 11:00 a.m. Eastern Time
(10:00 a.m. Central Time) on Monday, July 9, 2012 to discuss RigNet's
acquisition of Nessco. Hosting the call will be Mark Slaughter, Chief
Executive Officer and President, and Marty Jimmerson, Chief Financial
Officer. The call may be accessed live over the telephone by dialing +1
(877) 845-0777, or, for international callers, +1 (760) 298-5090.
Interested parties may also listen to a simultaneous webcast of the
conference call by logging onto RigNet's website at www.rig.net in the
Investors -- Webcasts and Presentations section. A replay of the
conference call webcast will also be available on our website for
approximately thirty days following the call.
About RigNet, Inc.
RigNet (Nasdaq:RNET) is a leading global provider of managed remote
communications, networks and collaborative applications dedicated to
the oil and gas industry, focusing on offshore and onshore drilling
rigs, energy production facilities and energy maritime. RigNet provides
solutions ranging from fully-managed voice and data networks to more
advanced applications that include video conferencing and real-time
data services to remote sites in over thirty countries on six
continents, effectively spanning the drilling and production industry.
RigNet is based in Houston, Texas. For more information, please visit
www.rig.net. RigNet is a registered trademark of RigNet, Inc.
The RigNet, Inc. logo is available at
CONTACT: Marty Jimmerson
+1 (281) 674-0699