THE WOODLANDS, Texas,
Feb. 14, 2018 /PRNewswire/
-- TETRA Technologies, Inc. (or the "Company") (NYSE:TTI)
today announced that it has entered into an Equity Interest
Purchase Agreement with the members of SwiftWater Energy Services,
LLC ("SwiftWater"), providing for the purchase by TETRA of all of
the issued and outstanding equity interests in SwiftWater.
SwiftWater is engaged in the business of providing water management
and water solutions to oil and gas operators in the Permian Basin
market.
SwiftWater's adjusted EBITDA is expected to be $16-20 million for the 12 months following the
closing of the acquisition, not including the benefit of
anticipated synergies between SwiftWater and TETRA, and is expected
to immediately be accretive to the Company on an earnings per
share, cash flow per share, and free cash flow basis during
2018.
The addition of SwiftWater expands TETRA's market share in the
Permian, which is one of the fastest growing basins for oilfield
services globally, by adding significant capacity as well as
incremental products and services.
"The agreement to acquire SwiftWater Energy Services shows
further implementation of our strategic plans, growing our water
management businesses to better serve our customers, delivering
improved returns for shareholders, and providing new opportunities
for employees. Our focus will continue to be identifying
additional growth opportunities in our current business lines,
while continuing to deliver the high levels of customer service,
safety, and operational excellence our customers demand," said
TETRA's Chief Executive Officer, Stuart M.
Brightman.
"We see excellent synergies with nominal customer overlap
between our and SwiftWater's operations in the Permian Basin, and
both companies continue to see strong demand for water management
solutions, creating excellent opportunities for cross-selling
products and services. The acquisition of SwiftWater is
expected to provide our customers an enhanced, more efficient,
diverse, and strategically positioned portfolio of services.
"We are excited to welcome SwiftWater's quality professionals to
the TETRA family, and look forward to integrating SwiftWater's
highly complementary products and services into an expanded TETRA
portfolio."
Prior to closing, TETRA and SwiftWater will continue their
respective operations, delivering high-quality products, operations
and excellent customer service safely, as they have always
done.
The closing of this transaction is anticipated to take place in
the coming weeks, following the completion of customary closing
conditions and the expiration or termination of the applicable
waiting period under the Hart-Scott-Rodino Anti-Trust Improvements
Act.
Transaction Details
Under the terms of the purchase agreement, consideration of
$40 million of cash, subject to a
working capital adjustment, and 7,772,021 shares of common stock
("Common Stock"), par value $0.01 per
share, will be paid by TETRA at closing. The shares of Common
Stock were valued at $3.86 per share.
The sellers will also have the right to receive earnout payments,
in an aggregate amount of up to $15
million, calculated on EBITDA and revenue of the combined
water management, production testing and fluids businesses of both
SwiftWater and of TETRA in the Permian Basin in respect of the
period from January 1, 2018 through
December 31, 2019. This earnout
structure reflects the consolidation of the combined businesses of
TETRA and SwiftWater in the Permian Basin, and will help drive
synergies and cross-selling opportunities. The earnout may be
paid in cash or shares of Common Stock, at the election of
TETRA. The purchase agreement contains negotiated
representations, warranties and covenants by the Sellers and TETRA,
which are believed to be customary for transactions of this
kind.
About the Companies
TETRA is a geographically diversified oil and gas services
company, focused on completion fluids and associated products and
services, water management, frac flowback, production well testing,
offshore rig cooling, compression services and equipment, and
selected offshore services including well plugging and abandonment,
decommissioning, and diving. TETRA owns an equity interest,
including all of the general partner interest, in CSI Compressco LP
(NASDAQ: CCLP), a master limited partnership.
SwiftWater Energy Services, LLC is a water management oil and
gas services company headquartered in Midland, Texas. Founded in 2013,
SwiftWater has grown organically to more than 300 employees in
three locations and offers more than seven service lines.
SwiftWater provides a diverse range of water management equipment
and services for operators in the Permian Basin, offering an
integrated line of services ranging from layflat hose water
transfer, water treatment, above-ground water storage for fresh and
produced water applications, secondary frac tank containment, poly
pipe, pit lining rentals, and supporting ancillary equipment.
Widely recognized as a first-in-class service provider throughout
the Permian Basin, SwiftWater's clients include many of the largest
oil companies in the world.
Investor Note
More detailed information about this transaction can be found in
TETRA's SEC Form 8-K, filed February 14,
2018, which is available in the SEC Filing & Financial
Information section of the company's Investor Relations website
http://ir.tetratec.com/SEC-Filings
Forward-Looking Statements
This news release includes certain statements that are deemed to be
forward-looking statements. Generally, the use of words such as
"may," "expect," "intend," "estimate," "projects," "anticipate,"
"believe," "assume," "could," "should," "plans," "targets" or
similar expressions that convey the uncertainty of future events,
activities, expectations or outcomes identify forward-looking
statements that TETRA Technologies, Inc. ("the Company") intends to
be included within the safe harbor protections provided by the
federal securities laws. These forward-looking statements include
statements concerning the anticipated recovery of the oil and gas
industry, expected results of operational business segments,
anticipated benefits from the acquisition of SwiftWater Energy
Services, LLC ("SES"), projections concerning the Company's
business activities and the expected impact of the acquisition of
SES, financial guidance, estimated earnings, earnings per share,
and statements regarding the Company's beliefs, expectations,
plans, goals, future events and performance, and other statements
that are not purely historical. These forward-looking
statements are based on certain assumptions and analyses made by
the Company in light of its experience and its perception of
historical trends, current conditions, expected future developments
and other factors it believes are appropriate in the circumstances.
Such statements are subject to a number of risks and
uncertainties, many of which are beyond the control of the Company,
including the ability of the Company to successfully integrate the
operations of SES, and recognize the anticipated benefits of the
acquisition. Investors are cautioned that any such statements
are not guarantees of future performances or results and that
actual results or developments may differ materially from those
projected in the forward-looking statements. Some of the factors
that could affect actual results are described in the section
titled "Risk Factors" contained in the Company's Annual Report on
Form 10-K for the year ended December 31,
2016, as well as other risks identified from time to time in
its reports on Form 10-Q and Form 8-K filed with the Securities and
Exchange Commission.
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SOURCE TETRA Technologies, Inc.