LONDON & PARIS & HOUSTON--(BUSINESS WIRE)--Regulatory News:

TechnipFMC plc (“TechnipFMC”) (NYSE: FTI) (Paris: FTI) (ISIN: GB00BDSFG982) announces that on 19 January 2021, it filed a Current Report on Form 8-K (the “Form 8-K”) under the U.S. Securities Exchange Act of 1934, as amended, with the U.S. Securities and Exchange Commission (the “SEC”) disclosing that certain information contained in the confidential preliminary offering memorandum dated January 19, 2021 (the “Offering Memorandum”) to potential investors relating to a proposed private offering by the Company (the “Offering”), subject to market conditions and other factors, of $850,000,000 in aggregate principal amount of senior unsecured notes due 2026 (the “Notes”).

Forward‑looking statements

This release contains “forward-looking statements” as defined in Section 27A of the U.S. Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Words such as “guidance,” “confident,” “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” “may,” “will,” “likely,” “predicated,” “estimate,” “outlook” and other similar expressions, including the negatives thereof are intended to identify forward-looking statements, which are generally not historical in nature, and include any statements with respect to the potential separation of the Company into TechnipFMC and Technip Energies, the expected financial and operational results of TechnipFMC and Technip Energies after the potential separation and expectations regarding TechnipFMC’s and Technip Energies’ respective capital structures, businesses or organizations after the potential separation. Such forward-looking statements involve significant risks, uncertainties and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. The absence of these words, however, does not mean that the statements are not forward-looking. These forward-looking statements are based on our current expectations, beliefs and assumptions concerning future developments and business conditions and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate.

All of our forward-looking statements involve risks and uncertainties (some of which are significant or beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in the forward-looking statements. There can be no guarantee that we will be able to realize any of the potential strategic benefits or opportunities of the Spin-off, that we or our business will be commercially successful in the future, or achieve any particular credit rating or financial results, or that the Spin-off will be successful.

For information regarding known material factors that could cause actual results to differ from projected results, please see our risk factors set forth in our filings with the United States Securities and Exchange Commission, which include our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, our filings with the Autorité des marchés financiers or the U.K. Financial Conduct Authority, as well as the following:

Risks related to our business and industry

• Demand for our products and services depends on oil and gas industry activity and expenditure levels, which are directly affected by trends in the demand for and price of crude oil and natural gas.
• We operate in a highly competitive environment and unanticipated changes relating to competitive factors in our industry, including ongoing industry consolidation, may impact our results of operations.
• The COVID-19 pandemic (“COVID-19”) has significantly reduced demand for our products and services, and has had, and may continue to have, an adverse impact on our financial condition, results of operations, and cash flows.
• Our success depends on our ability to develop, implement, and protect new technologies and services and the intellectual property related thereto.
• Due to the types of contracts we enter into and the markets in which we operate, the cumulative loss of several major contracts, customers, or alliances may have an adverse effect on our results of operations.
• Disruptions in the political, regulatory, economic, and social conditions of the countries in which we conduct business could adversely affect our business or results of operations.
• The United Kingdom’s withdrawal from the European Union may have a negative effect on global economic conditions, financial markets, and our business.
• Our existing and future debt may limit cash flow available to invest in the ongoing needs of our business and could prevent us from fulfilling our obligations under our outstanding debt.
• A downgrade in our debt rating could restrict our ability to access the capital markets.
• Our acquisition and divestiture activities involve substantial risks.

Risks related to our operations

• We may lose money on fixed-price contracts.
• Our failure to timely deliver our backlog could affect future sales, profitability, and relationships with our customers.
• We face risks relating to our reliance on subcontractors, suppliers, and our joint venture partners.
• A failure of our IT infrastructure, including as a result of cyber attacks, could adversely impact our business and results of operations.

Risks relating to legal proceedings, tax, and regulatory matters

• The industries in which we operate or have operated expose us to potential liabilities, including the installation or use of our products, which may not be covered by insurance or may be in excess of policy limits, or for which expected recoveries may not be realized.
• Our operations require us to comply with numerous regulations, violations of which could have a material adverse effect on our financial condition, results of operations, or cash flows.
• Compliance with environmental and climate change-related laws and regulations may adversely affect our business and results of operations.
• Existing or future laws and regulations relating to greenhouse gas emissions and climate change may adversely affect our business.
• As an English public limited company, we must meet certain additional financial requirements before we may declare dividends or repurchase shares and certain capital structure decisions may require stockholder approval which may limit our flexibility to manage our capital structure. We may not be able to pay dividends or repurchase shares of our ordinary shares in accordance with our announced intent, or at all.
• Uninsured claims and litigation against us, including intellectual property litigation, could adversely impact our financial condition, results of operations, or cash flows.
• We are subject to governmental regulation and other legal obligations related to privacy, data protection, and data security. Our actual or perceived failure to comply with such obligations could harm our business.
• The IRS may not agree that we should be treated as a foreign corporation for U.S. federal tax purposes and may seek to impose an excise tax on gains recognized by certain individuals.
• U.S. tax laws and/or guidance could affect our ability to engage in certain acquisition strategies and certain internal restructurings.
• We are subject to the tax laws of numerous jurisdictions; challenges to the interpretation of, or future changes to, such laws could adversely affect us.
• We may not qualify for benefits under tax treaties entered into between the United Kingdom and other countries.
• We intend to be treated exclusively as a resident of the United Kingdom for tax purposes, but French or other tax authorities may seek to treat us as a tax resident of another jurisdiction.

Risks related to the Spin-off and the other Transactions

• The proposed Spin-off, the resumption of which was announced on January 7, 2021, is contingent upon the satisfaction of a number of conditions, is expected to require significant time and attention of our management, and may not achieve the intended results.

General risk factors

• Our businesses are dependent on the continuing services of certain of our key managers and employees.
• Seasonal and weather conditions could adversely affect demand for our services and operations.
• Currency exchange rate fluctuations could adversely affect our financial condition, results of operations, or cash flows.
• We are exposed to risks in connection with our defined benefit pension plan commitments.

We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any of our forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except to the extent required by law.

Summary

This summary highlights selected information appearing elsewhere in this Offering Memorandum and the documents incorporated herein by reference. This summary may not contain all of the information that may be important to you. You should read this summary together with this entire Offering Memorandum and the documents that we have incorporated herein by reference, including the “Risk factors” section of this Offering Memorandum, the Issuer’s Annual Report on Form 10-K for the year ended December 31, 2019 and the Issuer’s subsequent Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020 and September 30, 2020.

In this Offering Memorandum, unless otherwise indicated or the context otherwise requires, (i) the “Issuer” or “TechnipFMC plc” refers to TechnipFMC plc, exclusive of its consolidated subsidiaries, (ii) the “Company,” “we,” “us,” or “TechnipFMC”, refers to TechnipFMC plc and its consolidated subsidiaries which (x) prior to the consummation of the Spin-off (as defined below), includes Technip Energies N.V. and its subsidiaries and (y) following the consummation of the Spin-off, excludes Technip Energies (as defined below), (iii) “WholeCo” refers to TechnipFMC plc and its consolidated subsidiaries, prior to and without giving effect to the Spin-off and including, for avoidance of doubt, Technip Energies, (iv) “RemainCo” refers to TechnipFMC plc and its consolidated subsidiaries, after giving effect to the Spin-off and excluding, for avoidance of doubt, Technip Energies, (v) “Technip Energies” or “SpinCo” refers to Technip Energies N.V. and its consolidated subsidiaries, after giving effect to the Spin-off, which includes WholeCo’s “Technip Energies” business segment (including Genesis), as well as Loading Systems and Cybernetix (which were historically included in WholeCo’s Subsea and Surface Technologies segments) and (vi) “Technip Energies N.V.” refers to Technip Energies N.V., exclusive of its subsidiaries. As used in this Offering Memorandum, “Spin-off” means the separation and distribution of 50.1% of the shares of Technip Energies N.V. held by the Issuer to its shareholders.

Company overview

We are a global leader in the energy industry, delivering products, technologies and services to companies that produce and transport oil and natural gas. Through innovative technologies and improved efficiencies, our offerings unlock new possibilities for our customers in developing their energy resources and increasingly help position them to meet the ongoing energy transition to lower carbon energy alternatives.

After giving effect to the Spin-off described below, our Company will be organized in two business segments, Subsea and Surface Technologies, which are well-positioned to deliver greater efficiency across project lifecycles, from concept to project delivery and beyond. Our Subsea segment, which represented approximately 83% of our revenues as adjusted for the Spin-off for the last twelve months ended September 30, 2020, provides integrated design, engineering, procurement, manufacturing, fabrication, installation, and life of field services for subsea systems, subsea field infrastructure, and subsea pipe systems used in oil and gas production and transportation. Our Surface Technologies segment designs, manufactures, and services products and systems used by companies involved in land and shallow water exploration and production of crude oil and natural gas, with approximately 60% of segment revenue generated outside the Americas for the last twelve months ended September 30, 2020 on a pro forma basis.

Our customers include major integrated oil companies, national oil companies, and independent exploration and production companies. For the twelve months ended September 30, 2020, on a pro forma basis, we had revenues of $6.8 billion, Adjusted EBITDA of $521.0 million and combined backlog of $7.6 billion. Approximately 90% of our revenues, on a pro forma basis, for the twelve months ended September 30, 2020 came from outside the more cyclical United States region of our Surface Technologies segment. See Note 1 under “Summary—Summary unaudited pro forma financial and other data” for a reconciliation of pro forma Adjusted EBITDA to pro forma net loss.

The Spin-off

On January 7, 2021, we announced the resumption of activities toward the completion of our previously announced separation into two diversified pure-play market leaders – TechnipFMC, a fully integrated technology and services provider, and Technip Energies, a leading engineering and technology player. The Spin-off will be structured as a spin-off of our Technip Energies business segment and, Technip Energies will also include Loading Systems, one of the main suppliers of solutions for handling a complete range of fluids and gases at ambient, elevated, and cryogenic temperatures, and at the full spectrum of operating pressures, and Cybernetix, active since 1985 in teleoperated systems, asset integrity monitoring, and inspection for hostile environments, which have historically been a part of our Surface Technologies and Subsea businesses. We will continue to offer what we believe to be a comprehensive portfolio of technologies, products, projects, and services with capabilities spanning early studies, technology licensing, proprietary equipment, and project management to full engineering and construction. We also announced our entry into a share purchase agreement, dated January 7, 2021 (the “Share Purchase Agreement”), with Bpifrance Participations SA (“BPI”), pursuant to which BPI will purchase from us shares of Technip Energies N.V. for $200 million, which will further reduce TechnipFMC’s ownership in Technip Energies N.V. See “The Transactions” for a more complete description of the Spin-off and the transactions related thereto.

Technip Energies will be a leading engineering and technology company positioned to play a critical role for the energy transition, offering a robust project delivery model, strong technical capabilities, and proven track record. Technip Energies will continue to deploy its core capabilities to meet today’s and tomorrow’s energy challenges, whether in LNG (onshore and offshore liquefaction), in sustainable chemistry (biofuels, biochemicals, circular economy), for decarbonization (energy efficiency, blue hydrogen, carbon capture, utilization and storage) and for carbon free solutions (green hydrogen, offshore wind and nuclear).

At the completion of the Spin-off, we will own 49.9% of Technip Energies’ outstanding shares, and the sale of shares to BPI pursuant to the Share Purchase Agreement will further reduce our ownership in Technip Energies. We intend to significantly reduce our shareholding in Technip Energies over the two years following the Spin-off. We intend to use the proceeds from the sale of our remaining interest in Technip Energies to further delever our balance sheet.

The Spin-off builds on the results of the successful merger (the “Merger”) of Technip S.A., a French société anonyme (together with its consolidated subsidiaries, “Technip”) and FMC Technologies, Inc., a U.S. Delaware corporation (together with its consolidated subsidiaries, “FMC Technologies” or “FMCTI”), which created a fully-integrated subsea provider. Our performance since the Merger has made the Spin-off possible and, when completed, we believe that the Spin-off will enable us and Technip Energies to unlock additional value. We believe that the strategic rationale for the Spin-off is compelling based primarily on the following:

• distinct and expanding market opportunities and specific customer bases;
• enhanced focus of management, resources and capital;
• robust backlogs supporting future revenue; and
• compelling and distinct investment profiles.

Segment overview

Subsea segment

We are focused on transforming subsea by safely delivering innovative solutions that improve economics, enhance performance and reduce emissions. As a fully-integrated technology and services provider, we continue to drive responsible energy development.

Our Subsea segment provides integrated design, engineering, procurement, manufacturing, fabrication, installation, and life of field services for subsea systems, subsea field infrastructure, and subsea pipe systems used in oil and gas production and transportation.

We are an industry leader in front-end engineering and design (“FEED”), subsea production systems (“SPS”), subsea flexible pipe, and subsea umbilicals, risers, and flowlines (“SURF”), and subsea robotics. We also have the capability to install these products and related subsea infrastructure with our fleet of highly specialized vessels. By integrating the SPS and SURF work scopes, we are able to drive greater value to our clients through more efficient field layout and execution of the installation campaign. This capability, in conjunction with our strong commercial focus, has enabled the successful market introduction of an integrated subsea business model, iEPCI (“iEPCI”), which spans a project’s early phase design through the life of field.

Our integrated business model is unlocking incremental opportunities and materially expanding the deepwater opportunity set. Since the first iEPCI project was awarded in 2016, market adoption of the business model has accelerated each year, and in 2019 we secured more than 70% of the industry’s integrated project awards.

Through integrated FEED studies, or iFEED (“iFEED”), we are uniquely positioned to influence project concept and design. Using innovative solutions for field architecture, including standardized equipment, new technologies, and simplified installation, we can significantly reduce subsea development costs and accelerate time to first production.

Our first-mover advantage and ability to convert iFEED studies into iEPCI contracts, often as a direct award, creates a unique set of opportunities for the Company that are not available to our peers. This allows us to deliver a fully integrated - and technologically differentiated - subsea system, and to better manage the complete work scope through a single contracting mechanism and a single interface, yielding meaningful improvements in project economics and time to first oil.

We continue to support our clients following project delivery by offering aftermarket and life of field services. Our wide range of capabilities and solutions, including integrated life of field, or iLOF (“iLOF”), allows us to help clients increase oil and gas recovery and equipment uptime while reducing overall cost. Our iLOF offering is designed to unlock the full potential of subsea infrastructures during operations by transforming the way subsea services are delivered and proactively addressing the challenges operators face over the life of subsea fields. We provide production optimization, asset life extension insight, proactive de-bottlenecking, and condition-based maintenance.

Our Subsea business depends on our ability to maintain a cost-effective and efficient production system, achieve planned equipment production targets, successfully develop new products, and meet or exceed stringent performance and reliability standards.

We actively pursue alliances with companies that are engaged in the subsea development of oil and natural gas to promote our integrated systems for subsea production. These alliances are typically related to the procurement of subsea production equipment, although some alliances are related to engineering, procurement, construction and engineer (“EPCI”) services.

Generally, our customers in the Subsea segment are major integrated oil companies, national oil companies, and independent exploration and production companies. For the twelve months ended September 30, 2020, on a pro forma basis, we had total Subsea revenues of $5.6 billion, Adjusted EBITDA of $544.2 million and backlog of $7.2 billion. See “Management’s discussion and analysis of financial condition and results of operations of pro forma condensed consolidated financial information.”

Subsea segment products and services

Subsea production systems. Our systems are used in the offshore production of crude oil and natural gas. Subsea systems are placed on the seafloor and are used to control the flow of crude oil and natural gas from the reservoir to a host processing facility, such as a floating production facility, a fixed platform, or an onshore facility.

Our subsea production systems and products include subsea trees, chokes and flow modules, manifold pipeline systems, controls and automation systems, well access systems, multiphase and wet-gas meters, and additional technologies. The design and manufacture of our subsea systems requires a high degree of technical expertise and innovation. Some of our systems are designed to withstand exposure to the extreme hydrostatic pressure of deepwater environments, as well as internal pressures of up to 20,000 pounds per square inch (“psi”) and temperatures of up to 400º F. The development of our integrated subsea production systems includes initial engineering design studies and field development planning and considers all relevant aspects and project requirements, including optimization of drilling programs and subsea architecture.

Subsea processing systems. Our subsea processing systems, which include subsea boosting, subsea gas compression, and subsea separation, are designed to accelerate production, increase recovery, extend field life, and/or lower operators’ production costs for greenfield, subsea tie-back and brownfield applications. To provide these products, systems, and services, we utilize our engineering, project management, procurement, manufacturing, and assembly and test capabilities.

Rigid Pipe. We design and fabricate rigid pipes for production and service applications at our spoolbases. Rigid pipes are installed from our fleet of differentiated rigid pipelay vessels. Our pipelines optimize flow assurance through innovative insulation coatings, electric trace heating, plastic liners, and pipe-in-pipe systems.

Flexible pipe and umbilicals. We design and manufacture flexible pipes as well as steel tube, thermoplastic hose, power, communication and hybrid (a combination of steel tube, thermoplastic hose, and electrical cables) umbilicals.

Investor relations
Matt Seinsheimer
Vice President Investor Relations
Tel: +1 281 260 3665
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Phillip Lindsay
Director Investor Relations (Europe)
Tel: +44 (0) 20 3429 3929
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Media relations
Christophe Bélorgeot
Senior Vice President Corporate Engagement
Tel: +33 1 47 78 39 92
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Brooke Robertson
Public Relations Director
Tel: +1 281 591 4108
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.