OSD is an engineering, operations and commercial services business that works across the oil, gas, mining and petrochemical industries in Australia and New Zealand.
The board received two proposals but considered the OSD proposal the most competitive due to synergies and OSD's net cash position, which will bolster LogiCamms' financial position.
The proposed deal would see LogiCamms issue 118.4 million shares to the OSD vendors, giving them 59% of the enlarged company.
The combined business would have pro-forma FY19 revenue of about A$130 million and pro-forma normalised FY19 EBITDA of about $7 million.
OSD will also bring a backlog of $23 million of work in hand and $5 million cash.
It comes after LogiCamms posted a half-year loss.
Revenue for the half was steady at $41 million, but the company swung from a $900,000 profit to an $8.6 million net loss after tax.
The company said gross project margins and staff utilisation were ahead of budget assumptions.
EBITDA was $1 million, while operating cashflow was negative $1 million.
CEO Chris O'Neill, who only started in late November, said his detailed review had confirmed strong fundamentals for the business.
"I am confident that continuing to sharpen operating disciplines and transform the way we pursue larger contracts will lead to profitable growth," he said.
"The changes we are progressing will continue, and be bolstered, if the proposed merger with OSD proceeds.
"The last step in the First 100 Days plan is a renewal of the company's strategy and this is ideally timed to occur once the direction of the proposed merger with OSD is clear. A renewal of our strategy will be key to leveraging the operational changes we are putting in place to create additional value for our shareholders."
The company said it was "cautiously optimistic" on the outlook for the rest of the year based on an uplift in backlog and pipeline in January.
Work in hand for LogiCamms on a standalone basis was $34.3 million at the end of January, up from $30.8 million at June 30 and $26.8 million at the end of December 2018.
LogiCamms shares last traded at 14.5c, valuing the company at just under $12 million.