Sembmarine to Buy Sevan Marine’s IP
Sembcorp Marine (SembMarine) announced that its wholly-owned subsidiary, Sembcorp Marine Integrated Yard (SMIY) plans to buy the intellectual property (IP) of Norway’s Sevan Marine for US$28 million and bring an end to a long-standing intellectual property dispute between the two parties.
SMIY will further undertake to take over some of Sevan Marine’s existing service contracts and provide engineering services to some of Sevan’s existing contract partners which have outstanding licence fees payable to Sevan Marine. The litigation between SCM Group and Sevan Marine in the US Courts over the infringement of intellectual property rights of SCM Group will be terminated subject to completion.
The sale and purchase of the assets are subject to the approval of shareholders of Sevan Marine and the consent of certain third parties. If any of the conditions for completion of the sale and purchase of the assets are not satisfied on or before 31 December 2018 or such date as may be agreed by the parties, the SPA will be terminated.
If Sevan Marine receives a binding offer (subject to customary conditions) from another party for the Proposed Transaction for a cash price not less than 10 % higher than the cash consideration, or a voluntary or mandatory cash offer for all of Sevan Marine’s shares, SMIY shall have the right, but not an obligation to match such an offer. Sevan Marine has the right to terminate the Transaction if SMIY does not exercise its right.
If Sevan Marine terminates the SPA following such an offer, it will reimburse SMIY reasonable transaction costs. In such an event, the litigation between the Sembcorp Marine Group and Sevan Marine in the US Courts over the infringement of Sembcorp Marine’s intellectual property rights will then continue.
Sevan Marine, which is listed on the Oslo Bourse, specialises in the design, engineering and project execution of floating units for offshore applications. Their main product is a cylindrical platform used for floating production and drilling. Following the acquisition, HiLoad LNG AS will become a subsidiary of SMIY.
Through the strategic acquisition of Sevan Marine’s intellectual property rights, the long-standing dispute over infringement of each other’s IP can be resolved.
Sembcorp Marine will be well placed with a suite of intellectual properties and knowledge to execute leading-edge design and engineering solutions for the global offshore and marine sectors. This puts the Company in a better position to offer alternative solutions to customers and partners.
The aggregate cash consideration of US$28 million was agreed between the parties on a willing-buyer and willing-seller basis after taking into consideration the net book value of approximately US$1million as at 31 May 2018.
