Serica to acquire Tailwind in £367m deal
Serica Energy has announced it will buy the entire share capital of fellow North Sea oil firm Tailwind Energy Investment for a combined £367m.
Natural gas producer Serica Energy will provide a £58.7 million cash payment and will issue over 111m ordinary shares representing as much as 28.9 per cent of its share capital.
The total consideration for the acquisition will amount to £367m, based on Serica’s latest closing price of 278p per share recorded on 19 December.
Serica will also take on Tailwind’s £277 million net debt as part of the deal.
The deal is expected to take place in March 2023.
London-based Tailwind was founded in 2016 and is backed by private commodities and energy firm Mercuria.
As part of the deal, Mercuria, the largest shareholder of Tailwind will become a ‘strategic investor’ in Serica, with a 25.2 per cent holding. Two Mercuria-nominated non-executive directors will join the Serica board once the acquisition has been finalised.
As part of the deal, Serica will also obtain 2P reserves of 42 million brent oil equivalents (boe) from Tailwinds, creating a combined portfolio of 2P reserves of 104m boe.
Serica will also boost production to 40,000 — 45,000 boe per day come 2023, putting the firm in the “top 10 UK producers” and top 3 listed independent producers.
Mitch Flegg, chief executive officer of Serica said: “I am excited by the announcement of this transaction and by the possibilities it brings for Serica in terms of a new phase of growth. The transaction achieves our strategic objective of materially increasing the scale and diversity of our UKCS portfolio of assets.
“The Tailwind portfolio also brings multiple organic investment opportunities for further material near-term growth in reserves and production. “
“Moreover, through the introduction of Mercuria as a new strategic investor, we will be differentially positioned to take advantage of the opportunities we expect to arise through industry consolidation, the North Sea Transition Deal and potentially overseas.”