READING, United Kingdom and
HOUSTON, March 11, 2021 /PRNewswire/ -- Expro Group, a
privately-held international energy services company with market
leadership in well access and well flow optimization, and Frank's
International (NYSE: FI), a global oil services company that
provides a broad range of highly engineered drilling and
completions solutions and services, today announced a definitive
agreement under which the companies will combine in an all-stock
transaction. Upon the closing of the transaction, Expro
shareholders will own approximately 65% of the combined entity,
with Frank's shareholders owning approximately 35%.
The combination brings together two companies with decades of
market leadership, best-in-class safety and service quality
performance, exceptional talent and global capabilities in well
construction, well flow management, subsea well access, well
intervention and production services. With a broad range of
complementary, highly specialized equipment and services, the
combined company will provide customers with cost-effective,
innovative solutions across the well lifecycle, driving a stable,
diverse revenue mix. The combined company will have a strong,
debt-free balance sheet, robust order backlog, more than
$1 billion of pro forma annual
revenue as well as an ability to generate through-cycle free cash
flow and growth.
"This transaction unites two established industry players to
create a leading service provider with an extensive portfolio
of capabilities across the well lifecycle," said Mike Jardon, Chief Executive Officer of Expro.
"Together, Expro and Frank's will be better positioned to support
our customers around the world and navigate industry cyclicality.
This business combination also allows us to rationalize facilities
and other support costs, optimize business processes, capitalize on
profitable growth opportunities and create value for shareholders
of both companies, particularly as the environment for
international projects continues to improve."
Mr. Jardon continued, "We expect the combined company's scale,
debt-free balance sheet and cash flow outlook will allow us to
accelerate growth. This will be achieved through an enhanced
ability to deliver integrated customer solutions and increased
investments in digitalization, autonomous operations and other
technologies. The combination of Expro and Frank's also allows us
to advance our commitment to a lower carbon future, which is
underpinned by our goals to maximize efficiency and improve our
products and services to help the Company and its customers lower
emissions. Finally, this transaction will unite two of the premier
teams in the industry, and better allow us to attract, retain and
develop the best workforce. We look forward to combining the
strengths of our businesses and teams and building upon both
companies' proud track records of providing safe, reliable and
cost-effective solutions and best-in-class service quality to
Expro's and Frank's many customers."
"Expro and Frank's share complementary cultures, values and
competencies – all of which support a smooth integration for our
customers and employees," said Mike
Kearney, Chairman, President and CEO of Frank's. "After
undertaking a thorough process to consider a range of strategic
alternatives, we are confident that this transaction presents a
compelling opportunity for Frank's shareholders to benefit from
value creation led by returns-focused growth. The combination
brings scale, improved profitability and free cash flow and,
together, we will be better positioned for the industry recovery,
of which we are in the early stages. We are extremely proud of
Frank's history and the talented individuals of Frank's who helped
build and sustain our great company. We expect this combination to
create career development and advancement opportunities for many of
our employees as part of a more balanced and stronger combined
organization."
Multiple Avenues for Value Creation
- Broad offering that spans the well lifecycle provides
through-cycle resilience and ability to better capture cyclical
recovery upside: The combined company's expanded product
offerings will enable it to perform well across the oilfield cycle
– generating strong and stable cash flow – and positioning it to
capitalize on upside driven by a recovery. The combined company
will offer a balanced portfolio of services and solutions that meet
customer needs across well construction, completions, production
optimization and de-commissioning, in both onshore and offshore
markets. Its diverse revenue streams are supported by a global
operating footprint and a blue-chip customer base. Together, Expro
and Frank's will generate approximately one-third of the combined
company's revenue from customers' production optimization efforts.
At December 31, 2020, Expro's backlog
was approximately $1 billion.
- Establishes well lifecycle leadership across enhanced
geographic footprint, including key international markets: The
combined company will have leading positions in large addressable
markets across the well-lifecycle and customer spend, with
operations in more than 50 countries and across six continents,
including the world's most prolific oil and gas basins. Expro's
established position in North
Africa, the Middle East and
Asia markets will provide
significant opportunities to expand Frank's presence in these
attractive regions. Similarly, the combined company will leverage
Frank's strong position in drilling and completions services
throughout the Americas to deliver integrated customer
solutions.
- Robust technology and innovation pipeline to aid
sustainability goals: Both companies are committed to
continuing their development of technologies that will drive
enhanced sustainability and enable the combined company to
capitalize on industry trends geared towards digitalization,
automation and a lower carbon future. The combined company will
remain committed to achieving a 50% reduction in carbon intensity
by 2030, and net zero CO2 emissions by 2050, protecting
the environment while providing core products and services that
help make energy affordable for people around the world and
optimize participation in the energy transition.
Strong Balance Sheet and Synergies Bring Significant Degree
of Operational Flexibility and Strategic Optionality
- Significant and achievable synergies: The combined
company is targeting approximately $55
million of annual run-rate cost synergies to be achieved in
the first twelve months, ramping up to $70
million of annual cost savings within 36 months. The
companies have also identified significant growth opportunities
through complementary customer relationships and operating
footprints, earlier visibility into customer requirements,
increased time on rig and greater exposure to the full life of the
field.
- Strong balance sheet and cash flow before synergies: The
combined company will have a debt-free balance sheet and pro forma
revenue and adjusted EBITDA, excluding identified synergies, of
more than $1 billion and $107 million, respectively, based on the twelve
months ended December 31, 2020.
At closing, the combined company is expected to have approximately
$285 million of cash. To supplement
available liquidity, the companies expect to complete syndication
of a revolving credit facility, which will be available for direct
borrowings and letters of credit, of up to $250 million prior to the close of the
transaction.
Proven Leadership Team
Upon closing of the transaction, Expro Chief Executive Officer,
Mike Jardon, will become Chief
Executive Officer of the combined company and will be a member of
the Board of Directors. Mike
Kearney, Frank's Chairman, President and Chief Executive
Officer, will serve as Chairman of the combined company. Quinn
Fanning will serve as Chief Financial Officer of the combined
company, and the remainder of the new leadership team is expected
to include representatives of both companies.
In addition to Mike Kearney and
Mike Jardon, the remainder of the
combined company's nine-member Board of Directors will comprise
five additional directors appointed by Expro and two additional
directors appointed by Frank's.
The combined company will be operationally headquartered in
Houston, Texas, and will maintain
a significant operating presence in Lafayette, Louisiana, Aberdeen, Scotland and other key locations
around the world. The principal executive office of the combined
company will remain in the
Netherlands.
Transaction Terms
Under the terms of the agreement, which has been unanimously
approved by the Boards of Directors of both companies, Expro
shareholders will receive a fixed exchange ratio of 7.272 shares of
Frank's for each share of Expro owned, subject to adjustment in
specified circumstances. Upon the closing of the transaction, Expro
shareholders will own approximately 65% of the merged entity, with
Frank's shareholders owning approximately 35%. The transaction is
structured to be tax-free to shareholders, and is expected to close
in the quarter ending September 30,
2021, subject to approval by Frank's and Expro shareholders
and customary closing conditions, including required regulatory
approvals. Upon closing, the combined company will assume the Expro
Group name and be listed on the NYSE exchange under the symbol
"XPRO". The combined company will retain the Frank's brand name for
its well construction solutions.
The Mosing family representatives on the Frank's Board
unanimously support the transaction. Expro shareholders
representing approximately two-thirds of ownership have agreed to
support the transaction.
Advisors
J.P. Morgan Securities plc is serving as financial advisor and
Gibson, Dunn & Crutcher LLP is
serving as legal counsel to Expro. Moelis & Company is serving
as financial advisor and Vinson & Elkins LLP is serving as
legal counsel to Frank's.
Conference Call and Webcast
Expro and Frank's will host a conference call today at
1:30 PM GMT / 7:30 AM CT to discuss this morning's
announcement. To access the call, please dial 1-(877) 883-0383
or 1-(412) 902-6506 outside the U.S. and enter passcode
1813872. Due to the anticipated high number of callers, the
companies encourage listeners to join via webcast unless they
intend to participate in the Q&A portion of the call. Those
joining by phone should dial in 10-15 minutes prior to the
scheduled start time. The conference call will also be
broadcast live via the Internet and can be accessed on each
company's website at www.exprogroup.com and
www.franksinternational.com.
A webcast replay of the conference call will be available at
each company's website shortly after the call.
ABOUT EXPRO GROUP
For clients working across the entire well life cycle, Expro is
the well flow optimization expert. With nearly 50 years of market
leadership, Expro employs approximately 4,000 people across 50
countries worldwide. The company combines innovative technologies
with high quality data to deliver cost-effective solutions across
three main capabilities: well testing and appraisal services;
subsea, completion and intervention services; and production
services. Expro delivers a service that's not just state of the
art, but highly accurate. www.exprogroup.com
ABOUT FRANK'S INTERNATIONAL
Frank's International N.V. is a global oil services
company that provides a broad and comprehensive range of highly
engineered tubular running services, tubular fabrication, and
specialty well construction and well intervention solutions with a
focus on complex and technically demanding wells. Founded in 1938,
Frank's has approximately 2,400 employees and provides services to
leading exploration and production companies in both onshore and
offshore environments in approximately 40 countries on six
continents. The Company's common stock is traded on the NYSE under
the symbol "FI." Additional information is available on the
Company's website, www.franksinternational.com.
No Offer or Solicitation
This communication relates to a proposed merger and related
transactions (the "Transactions") between Frank's International
N.V. ("Frank's") and Expro Group Holdings International Limited
("Expro"). This communication is for informational purposes only
and does not constitute an offer to sell or the solicitation of an
offer to buy any securities or a solicitation of any vote or
approval, in any jurisdiction, pursuant to the Transactions or
otherwise, nor shall there be any sale, issuance, exchange or
transfer of the securities referred to in this document in any
jurisdiction in contravention of applicable law. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended.
Important Additional Information
In connection with the Transactions, Frank's intends to file
relevant materials with the U.S. Securities and Exchange Commission
(the "SEC"), including a registration statement on Form S-4 (the
"Registration Statement"), which will include a proxy
statement/prospectus of Frank's. After the Registration Statement
has been declared effective by the SEC, a definitive proxy
statement/prospectus will be mailed to the shareholders of the
Frank's and Expro. SHAREHOLDERS OF FRANK'S AND EXPRO ARE URGED TO
READ THE PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND
SUPPLEMENTS THERETO) AND OTHER DOCUMENTS RELATING TO THE
TRANSACTIONS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE TRANSACTIONS. Such shareholders
will be able to obtain free copies of the proxy
statement/prospectus and other documents containing important
information about Frank's and Expro once such documents are filed
with the SEC through the website maintained by the SEC at
http://www.sec.gov. Additional information is available on the
Frank's website, www.franksinternational.com.
Participants in the Solicitation
Frank's and its directors and executive officers may be deemed
to be participants in the solicitation of proxies from the
shareholders of Frank's in connection with the Transactions. Expro
and its officers and directors may also be deemed participants in
such solicitation.
Information regarding Frank's directors and executive officers
is contained in the proxy statement for Frank's 2020 Annual Meeting
of Shareholders, which was filed with the SEC on April 28, 2020, Frank's Annual Report on Form
10-K for the year ended December 31,
2020, which was filed with the SEC on March 1, 2021, and certain of its Current Reports
on Form 8-K. You can obtain a free copy of these documents at the
SEC's website at http://www.sec.gov or by accessing Frank's website
at http://www.franksinternational.com.
Other information regarding persons who may be deemed
participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the proxy statement/prospectus and other
relevant materials to be filed with the SEC when they become
available.
Forward-Looking Statements and Cautionary Statements
The foregoing 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 fact, included in this communication
that address activities, events or developments that Expro or
Frank's expects, believes or anticipates will or may occur in the
future are forward-looking statements. Words such as "estimate,"
"project," "predict," "believe," "expect," "anticipate,"
"potential," "create," "intend," "could," "may," "foresee," "plan,"
"will," "guidance," "look," "outlook," "goal," "future," "assume,"
"forecast," "build," "focus," "work," "continue" or the negative of
such terms or other variations thereof and words and terms of
similar substance that convey the uncertainty of future events or
outcomes identify the forward-looking statements, although not all
forward-looking statements contain such identifying words. Without
limiting the generality of the foregoing, forward-looking
statements contained in this press release specifically include,
but are not limited to, statements, estimates and projections
regarding the Transactions, pro forma descriptions of the combined
company, anticipated or expected revenues, EBITDA, synergies or
cost-savings, operations, integration and transition plans,
opportunities and anticipated future performance. These statements
are based on certain assumptions made by Frank's and Expro based on
management's experience, expectations and perception of historical
trends, current conditions, anticipated future developments and
other factors believed to be appropriate. Forward-looking
statements are not guarantees of performance.
Although Frank's and Expro believe the expectations reflected in
these forward-looking statements are reasonable and are based on
reasonable assumptions, no assurance can be given that these
assumptions are accurate or that any of these expectations will be
achieved (in full or at all) or will prove to have been correct.
Moreover, such statements are subject to a number of assumptions,
risks and uncertainties, many of which are beyond the control of
Frank's, which may cause actual results to differ materially from
those implied or expressed by the forward-looking statements. Such
risks and uncertainties include the risk of the failure to obtain
the required votes of Frank's and Expro's shareholders; the timing
to consummate the Transactions; the risk that the conditions to
closing of the Transactions may not be satisfied or that the
closing of the Transactions otherwise does not occur; the failure
to close the Transactions on the anticipated terms, including the
anticipated tax treatment; the risk that a regulatory approval,
consent or authorization that may be required for the Transactions
is not obtained in a timely manner or at all, or is obtained
subject to conditions that are not anticipated; the occurrence of
any event, change or other circumstances that could give rise to
the termination of the merger agreement relating to the
Transactions; unanticipated difficulties or expenditures relating
to the Transactions; the diversion of management time on
Transactions-related matters; the ultimate timing, outcome and
results of integrating the operations of Frank's and Expro; the
effects of the business combination of Frank's and Expro following
the consummation of the Transactions, including the combined
company's future financial condition, results of operations,
strategy and plans; the risk that any announcements relating to the
Transactions could have adverse effects on the market price of
Frank's common stock; potential adverse reactions or changes to
business relationships resulting from the announcement or
completion of the Transactions; expected synergies and other
benefits from the Transactions; the potential for litigation
related to the Transactions; results of litigation, settlements and
investigations; actions by third parties, including governmental
agencies; volatility in customer spending and in oil and natural
gas prices, which could adversely affect demand for Frank's and
Expro's services and their associated effect on rates, utilization,
margins and planned capital expenditures; unique risks associated
with offshore operations; global economic conditions; liabilities
from operations; decline in, and ability to realize, backlog;
equipment specialization and new technologies; adverse industry
conditions; adverse credit and equity market conditions; difficulty
in building and deploying new equipment; difficulty in integrating
acquisitions; shortages, delays in delivery and interruptions of
supply of equipment, supplies and materials; weather; loss of, or
reduction in business with, key customers; legal proceedings;
ability to effectively identify and enter new markets; governmental
regulation, including legislative and regulatory initiatives
addressing global climate change or other environmental concerns;
investment in and development of competing or alternative energy
sources; ability to retain and hire key personnel, including
management and field personnel; the length of time it will take for
the United States and the rest of
the world to slow the spread of the COVID-19 virus to the point
where applicable authorities ease current restrictions on various
commercial and economic activities; and other important factors
that could cause actual results to differ materially from those
projected.
All such factors are difficult to predict and are beyond Expro's
or Frank's control, including those detailed in Frank's annual
reports on Form 10-K, quarterly reports on Form 10-Q and current
reports on Form 8-K that are available on Frank's website at
http://www.franksinternational.com and on the SEC's website at
http://www.sec.gov. Any forward-looking statement speaks only as of
the date on which such statement is made, and Expro and Frank's
undertake 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. Readers are
cautioned not to place undue reliance on these forward-looking
statements.
Frank's Contact:
Sydney Isaacs / Alan Oshiki
Abernathy MacGregor
713-817-9346
Expro Contact:
Quinn Fanning
Expro
281-994-1066
Andrew Siegel / Nick Lamplough
Joele Frank, Wilkinson Brimmer
Katcher
212-355-4449
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SOURCE Frank's International N.V.