Mitcham Industries, Inc. (NASDAQ:MIND) has signed a number of agreements with Mitsubishi Heavy Industries in a bid to diversify into the marine technology industry. Under the new partnership agreements, Mitsubishi Heavy Industries will inject $4 million into Mitcham through the purchase of its 9% Series A Preferred Stock. Mitcham will then use the capital to buy certain intellectual property rights and assets from Hydroscience Technology, which was recently declared bankrupt.
Mitcham intends to use the proceeds to introduce new products, based on Hydroscience technology. The firm also plans to set up a manufacturing and repair unit for the new products. In another agreement signed by the two firms, Mitcham will support Mitsubishi’s marine equipment division. This will include the seismic cable system which Mitsubishi acquired from Hydroscience.
Mitcham chief Executive Officer Rob Capps said the partnership with Mitsubishi broadens its range of products in the technology division while providing Mitsubishi with crucial services.
He added that the agreements will position the firm as a leading player in the marine tech industry. The acquisition of Hdroscience’s technology is fuelling Mitcham’s diversification strategy. Before venturing into the marine technology industry, the firm was a significant oil and gas exploration player. Mitcham is acquiring designs for marine sensors and streamer technology for seismic and hydrography industries from Hydroscience and Solid Seismic LLC, the two sister companies which filed for bankruptcy in April 2017. The firm intends to use the acquired technology to venture into marine security systems through its subsidiary, Seamap Pte Ltd. Mitcham will also expand its operations in Singapore with an aim of supporting the manufacture and repair of related products.
The purchase agreement signed by Mitcham, Hydroscience and Mitsubishi stipulates that Mitcham will buy intellectual property rights and assets from Hydroscience for $3 million in cash.
