Forum Energy Technologies Completes Acquisition of Variperm Energy Services
January 05 2024 - 8:29AM
Business Wire
Forum Energy Technologies, Inc. (NYSE: FET) today announced it
has completed the acquisition of Variperm Energy Services
(“Variperm”), a leading manufacturer of customized downhole
technology solutions, providing sand and flow control products for
heavy oil applications. Total consideration for the acquisition
consisted of $150 million of cash and 2 million shares of FET’s
common stock, subject to customary purchase price adjustments.
“This accretive acquisition enhances FET’s downhole and
artificial lift product portfolio by adding a leading manufacturer
of customized downhole technology solutions in sand and flow
control for heavy oil applications. We expect the combined global
footprint of FET and Variperm to benefit both legacy FET and
Variperm products,” said Neal Lux, President and CEO of FET. “We
are excited to welcome the Variperm employees to the FET team.”
Transaction Financing
The cash consideration for the transaction was funded from cash
on hand, borrowings under our ABL credit facility, and a $60
million seller term loan. The seller term loan will mature in
December 2026 and provides for an initial interest rate of 11% that
is subject to escalation after the first anniversary of the loan.
The seller term loan is payable at any time without penalty.
As previously disclosed, FET completed an amendment to the
company’s ABL credit facility in November 2023 to, among other
things, (i) permit the Variperm acquisition, (ii) increase the
aggregate revolving commitments from $179 million to $250 million,
(iii) extend the maturity date to September 2028, and (iv) allow
the seller term loan. The effectiveness of the above amendments was
conditioned on the closing of the acquisition, which condition has
been satisfied.
Inducement Grants
FET, in connection with the acquisition of Variperm, granted
certain restricted stock unit awards (the “Inducement Grants”)
intended to qualify as “inducement grants” under the “employment
inducement awards” exemption in Section 303A.08 of the New York
Stock Exchange Listed Company Manual to fourteen employees of
Variperm as an inducement for them to continue to provide services
to Variperm and FET following the acquisition. None of the grantees
are executive officers of FET and none of the awards were
individually negotiated.
The fourteen employees received an aggregate of 39,000
restricted stock units (“RSUs”). The RSUs will vest in full on the
second anniversary of the closing date of the acquisition of
Variperm, subject to the employee's continued employment through
such vesting date.
Advisors
FET was represented in the transaction by Goldman Sachs &
Co. LLC as financial advisor and Gibson, Dunn & Crutcher LLP
and Goodmans LLP as legal counsel. Variperm was represented by
TPH&Co., the energy business of Perella Weinberg Partners, as
financial advisor and Vinson & Elkins LLP and Bennett Jones LLP
as legal counsel.
FET (Forum Energy Technologies) is a global company, serving the
oil, natural gas, industrial and renewable energy industries. With
headquarters located in Houston, Texas, FET provides value added
solutions aimed at improving the safety, efficiency, and
environmental impact of our customers’ operations. For more
information, please visit www.f-e-t.com.
Forward Looking Statements and Other
Legal Disclosures
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All statements,
other than statements of historical facts, included in this press
release that address activities, events or developments that the
company expects, believes or anticipates will or may occur in the
future are forward-looking statements. Without limiting the
generality of the foregoing, forward-looking statements contained
in this press release include the benefits of the acquisition of
Variperm and the expectations of plans, strategies, objectives and
anticipated financial and operating results of the combined
company.
These statements are based on certain assumptions made by the
company based on management's experience and perception of
historical trends, current conditions, anticipated future
developments and other factors believed to be appropriate. Such
statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of the company,
which may cause actual results to differ materially from those
implied or expressed by the forward-looking statements. Among other
things, these include potential adverse reactions or changes to
business relationships resulting from the completion of the
Variperm acquisition; the significant costs required to complete
the Variperm acquisition; the diversion of management attention to
transaction-related issues related to the Variperm acquisition; the
volatility of oil and natural gas prices, oilfield development
activity levels, the availability of raw materials and specialized
equipment, the company's ability to deliver backlog in a timely
fashion, the availability of skilled and qualified labor,
competition in the oil and natural gas industry, governmental
regulation and taxation of the oil and natural gas industry, the
company's ability to implement new technologies and services; the
availability and terms of capital, and uncertainties regarding
environmental regulations or litigation and other legal or
regulatory developments affecting the company's business; and other
important factors that could cause actual results to differ
materially from those projected as described in the company's
filings with the U.S. Securities and Exchange Commission.
Any forward-looking statement speaks only as of the date on
which such statement is made and the company undertakes no
obligation to correct or update any forward-looking statement,
whether as a result of new information, future events or otherwise,
except as required by applicable law.
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version on businesswire.com: https://www.businesswire.com/news/home/20240104873250/en/
Rob Kukla Director of Investor Relations 281.994.3763
Rob.Kukla@f-e-t.com
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