Computer Modelling acquires Rose Subsurface Assessment

Executive Summary

• Computer Modelling Group Ltd. (CMG) has acquired Rose Subsurface Assessment, a provider of probabilistic subsurface risk analysis and resource assessment software and services.
• The transaction involves a total purchase consideration of up to $12.3 million (U.S.), comprising an initial cash payment of $8.8 million, cash-on-hand adjustments, a customary holdback, and a potential earnout of up to $2.5 million.
• The acquisition adds Rose’s proprietary Geo Risk Analysis Studio software and its operator consortiums to CMG’s portfolio, aiming to expand geoscience capabilities and complement existing seismic and reservoir simulation solutions.

Key Details

• Transaction Structure: Purchase consideration of $9.8 million (U.S.) paid in cash at closing, plus an amount equivalent to Rose's cash on hand immediately prior to closing.
• Earnout: Potential additional payment of up to $2.5 million (U.S.) tied to performance milestones.
• Financial Metrics: Rose reported trailing-12-month (TTM) revenue of approximately $6.8 million (U.S.), with recurring revenue representing over half of total revenue.
• Management: Peter Carragher, currently managing partner at Rose, will be appointed as general manager.
• Strategic Rationale: CMG aims to expand its geoscience capabilities by integrating Rose’s scientifically robust probabilistic subsurface risk assessment tools with its existing seismic and reservoir simulation offerings.
• Rose Assets: Includes flagship software "Geo Risk Analysis Studio," two proprietary operator consortiums with over 30 members each (providing access to 25 years of calibration data), specialized training programs, and consulting services.
• Target Focus: Rose serves the global exploration and production industry, supporting operators in exploration prospects, development planning, portfolio management, and carbon capture and storage projects.

Notable Quotes

• Pramod Jain, CEO, Computer Modelling: "In welcoming Rose to CMG, we're expanding our geoscience capabilities with a solution that is both scientifically robust and highly respected in the market. Rose's software and expertise complement CMG's seismic and reservoir simulation solutions in the operator workflow, creating a natural extension of our offerings."
• Peter Carragher, Managing Partner, Rose: "What makes this next step meaningful is that both Rose and CMG are recognized for working closely with customers and delivering a level of service and expertise that sets us apart in the industry. Our shared commitment to deep technical engagement and responsive support creates a strong foundation for the future..."