TechnipFMC today announced its board of directors has unanimously approved its plan to separate into two industry-leading, independent, publicly traded companies.
The new companies are: RemainCo, a fully-integrated technology and services provider, continuing to drive energy development; and SpinCo, a leading engineering and construction (E&C) player, poised to capitalise on the global energy transition.
The separation would enhance both RemainCo’s and SpinCo’s focus on their respective strategies and provide improved flexibility and growth opportunities, said a company statement.
The transaction is expected to be structured as a spin-off of TechnipFMC’s Onshore/Offshore segment to be headquartered in Paris, France. The separation is expected to be completed in the first half of 2020, subject to customary conditions, consultations and regulatory approvals, at which time all outstanding shares of SpinCo will be distributed to existing TechnipFMC shareholders.
The 2017 merger of Technip and FMC Technologies created a new subsea leader and established TechnipFMC as the only fully-integrated subsea provider. TechnipFMC has redefined subsea economics through its integrated model and accelerated technology development and innovation. At the same time, the company’s Onshore/Offshore business has consistently demonstrated operational excellence, successfully delivered landmark projects, built an unprecedented backlog, and positioned itself to continue capitalising on growing demand for liquefied natural gas (LNG), it said.
The exceptional performance of TechnipFMC since the merger has made the proposed spin-off possible and, when completed, will enable the two companies to unlock additional value, it added.
The two companies would have:
• Distinct and expanding market opportunities and specific customer bases
• Enhanced focus of management, resources and capital
• Robust backlogs supporting future revenue growth
• Strong balance sheets and capital structures tailored to individual business needs
• Compelling and distinct investment profiles
Doug Pferdehirt, chairman and CEO of TechnipFMC, stated: “Since the creation of
TechnipFMC, we have pioneered the integrated business model for subsea and
transformed our clients’ project economics. To further enhance value creation, our board
of directors and management team have continuously evaluated strategic options and,
after a comprehensive review, determined that it is in the best interest of TechnipFMC and
all of our stakeholders to create two diversified pure-play leaders. We are confident that
the separation would allow both businesses to thrive independently within their sectors,
enabling each to unlock significant additional value.”
What are SpinCo's strengths?
With approximately 15,000 employees, SpinCo would be one of the largest E&C pureplays
and is poised to capitalise on the global energy transition. SpinCo will be uniquely
positioned to capture LNG opportunities as a result of its robust project delivery model,
demonstrated capabilities and proven track record. In addition, the new company will
benefit from its leadership position in the downstream market, as well as future growth
opportunities in biofuels, green chemistry and other energy alternatives.
The company would comprise the Onshore/Offshore segment, including Genesis – a leader in front end engineering and design. SpinCo would also include Loading Systems, a leader in
cryogenic material transfer products, and Cybernetix, a technology leader in process
automation, that have historically been a part of the Surface Technologies and Subsea
businesses, respectively.
SpinCo will be led by an experienced, proven management team. Catherine MacGregor,
who currently serves as TechnipFMC’s president, New Ventures, will serve as chief
executive officer of SpinCo. Bruno Vibert will serve as chief financial officer, and Marco
Villa will be chief operating officer.
SpinCo will be incorporated in the Netherlands with its headquarters in Paris and listed on the Euronext Paris exchange. Bpifrance, a key shareholder of TechnipFMC, strongly supports the proposed transaction and recognises SpinCo as a global leader with the potential for high value creation.
What are RemainCo's strengths?
With approximately 22,000 employees, RemainCo would be a fully-integrated technology
and services provider, continuing to drive energy development. The company’s role will
be to support clients in the delivery of unique, integrated production solutions.
As TechnipFMC has transformed the industry through its pioneering, integrated model in
Subsea, RemainCo will apply the same winning formula to Surface Technologies.
As a standalone company, RemainCo will be the largest diversified pure-play in the
industry. Doug Pferdehirt, chairman and chief executive officer of TechnipFMC, and
Maryann Mannen, executive vice president and chief financial officer of TechnipFMC,
will continue to serve in their roles following the separation.
RemainCo will remain incorporated in the United Kingdom with headquarters in Houston and listed on both the NYSE and Euronext Paris exchange. - TradeArabia News Service