HOUSTON: Forum Energy Technologies, Inc. (FET), a global provider of oilfield products and services, announced today that it has agreed to buy Variperm Energy Services, a Canadian manufacturer of sand and flow control products for heavy oil applications, for $150 million in cash and 2 million shares of FET stock.
The deal values Variperm at about 3.7 times its EBITDA for the 12 months ending September 30, 2023.
The acquisition, expected to close in January 2024, will enhance FET’s profitability, margin profile, and scale, as well as expand its product portfolio and customer base in the heavy oil market, which is a key source of global energy production and security. FET plans to leverage its global footprint and infrastructure to deliver Variperm’s differentiated technology to more regions, including the Middle East.
FET will fund the cash portion of the deal from its cash on hand, its ABL credit facility, and a $60 million seller term loan, which it may replace with an alternative financing arrangement before closing. FET’s lenders have agreed to amend its ABL credit facility to allow the acquisition and increase the revolving commitments from $179 million to $250 million.
Variperm, founded in 1969 and headquartered in Calgary, has been owned by SCF Partners since 2014. It has about 290 employees across eight locations in North America. FET expects Variperm’s employees to continue their tradition of excellent customer service and innovation as part of the FET family.
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