SED Energy Holdings (ENH) M&A Announcement summary

Deal rationale and strategic fit

• Merger creates a leading, diversified offshore oil services company with a focus on shareholder distributions, strong cash flows, and a diversified asset base, reducing market risk.

• Combines two market leaders in marine seismic and tender rig operations, enhancing scale, eliminating single asset risk, and expanding market reach.

• Combined entity controls 38% of the global tender rig market and is positioned in high-growth regions for natural gas, especially Southeast Asia.

• Enhanced ability to consolidate niche markets and pursue accretive growth opportunities in adjacent segments.

• Both companies share a commitment to disciplined capital management and maximizing value through cash flow distributions.

Financial terms and conditions

• Share-for-share acquisition: SeaBird issues approximately 651 million new shares to Energy Drilling shareholders, who will own 89% of the combined company.

• SeaBird shareholders retain a NOK 0.4 per share dividend for the current or Q1 2025 quarter.

• Pro-forma market capitalization of USD 381 million, net debt of USD 44 million, and firm revenue backlog exceeding USD 500 million.

• Energy Drilling's equity value in the deal is NOK 3,835 million.

• Energy Drilling's assets are expected to generate significant free cash flow, with potential for over 50% of current share price returned in cash over 24 months.

Synergies and expected cost savings

• Increased scale and diversified income streams are expected to improve financing terms, eliminate single-market risk, and enhance cash flow visibility.

• Combined company aims to optimize debt structure and enhance return of capital through quarterly dividend distributions.

• Significant cash flow visibility supported by a firm revenue backlog of USD 490 million and 80% of available days contracted for 2025 and 2026.

• Limited capex commitments and potential for debt refinancing to optimize shareholder distributions.

• Potential for improved debt financing and refinancing benefits.