National Energy Services Reunited Corp. (“NESR”) (NASDAQ:NESR)
announced today that it has entered into definitive agreements to
combine with Gulf Energy SAOC (“GES”) and National Petroleum
Services (“NPS”) for an aggregate purchase price of approximately
$1.1 billion, or 5.4x the Company’s estimated 2018 EBITDA. GES and
NPS (collectively the “business combination” or the “Company”) are
leading regional oilfield services companies offering a mix of
drilling, completion and production services and equipment in the
MENA and Asia Pacific regions. Following closing, the Company’s
primary operating locations will be in Dammam, Saudi Arabia,
Muscat, Oman and Dubai, UAE, with local headquarters in Houston,
Texas. More than 3,000 people will be employed in more than a dozen
countries across the region. Upon closing, the Company plans to
retain the leadership of both GES and NPS in management, senior
advisory roles or board positions.
NESR is funding the transaction with $229
million of cash and equity contributions from SCF Partners and
other notable regional and international investors. The majority of
the existing stakeholders in GES and NPS plan to maintain their
position in the Company, and receive a significant portion of their
consideration in NESR shares. NESR has also secured a backstop of
up to $100 million to help fund any potential redemptions requested
by NESR shareholders in connection with the business combination.
The transaction was structured to balance the interests of
management, employees and stockholders.
NPS is one of the leading providers of
integrated energy services in the MENA region, having established
long-term relationships with leading international and national oil
companies and built a strong market presence in GCC (Gulf
Cooperation Council) countries. Led by CEO Adnan Ghabris since
2008, NPS shareholders are among the most significant investors in
the region.
Founded in 2005 by Hilal Al-Busaidy and Yasser
Al Barami, GES is a provider of high-quality, integrated oilfield
service solutions in the MENA region. It has cultivated key
relationships with the major upstream operators in Oman and in
other international markets.
The business combination creates a leading
regional player in a market which is expected to grow
substantially. NESR is well positioned to benefit from revenue and
cost synergies and significant in-country value creation through
the delivery of superior service and technology. The combined
Company presents a more attractive partner for incremental M&A
in the area, and provides a platform for global oilfield technology
firms to gain exposure to the region.
Sherif Foda, Chairman of the Board and CEO of
NESR, commented, “We formed NESR to invest in the global oilfield
services sector, and this transaction is an important first step.
The combination of NPS and GES provides an ideal platform to create
a leader in oilfield services in the MENA region. With the support
of our esteemed customers, we are creating a truly national
services company which has its roots in the region. Our goals are
to create employment opportunities, significantly expand local
manufacturing and be recognized as one of the best service
providers in the area. We are at the beginning of a very exciting
journey and we intend to aggressively grow our portfolio and
businesses. I am confident that this transaction will provide
market-leading returns to our investors. I am honored to have the
support of prominent GCC leaders and to have such a global and
diverse group of investors such as SCF Partners and others who
believe in this vision and are partnering with us in this endeavor.
I am also looking forward to working with Hilal, Yasser, Adnan and
the entire GES and NPS teams to realize this vision.”
Hussain Al-Nowais, Chairman of the Board of NPS
and Waha Capital, commented, “I am very pleased with this
combination and am confident that NESR will be able to build on the
excellent work that the NPS team has delivered. Given the
importance of this sector to the region and its potential for
in-country value creation, I believe that we are on the right path
to create a Middle East bellwether for the oilfield services
sector. I look forward to seeing NESR achieve its goals in the
future.”
Hilal Al Busaidy, CEO and Co-Founder of Gulf
Energy SAOC, stated, “We see this business combination as an
excellent way to integrate two complementary businesses with
highly-experienced operators, allowing the combined entity to
further strengthen our footprint across key markets.” Yasser Al
Barami, Chairman and Co-Founder of Gulf Energy SAOC, added, “We are
extremely proud of all the successes of GES and the growth it has
demonstrated since its inception. We look forward to joining with
NPS. We strongly believe that with our entrepreneurial experience
and Sherif’s experience in the region and globally, we will be
uniquely positioned to deliver the best services to our customers
and advance in-country economic development. The sky is the
limit.”
Adnan Ghabris, CEO of National Petroleum
Services highlighted, “The combination of GES and NPS will provide
clients with more than a dozen services across more than 10
countries in Middle East and North Africa. The combined company
will be a comprehensive provider of services with a scalable
platform in the region. This will create the largest indigenous
MENA-focused oilfield services player.”
Andy Waite, Co-President of SCF Partners
highlighted, “SCF Partners’ strategy has been to identify and
invest in sub-sectors in the energy services industry that have
significant long-term growth potential, and partner with
exceptional management teams to build market-leading companies. In
NESR we saw an opportunity to do the same and are very pleased with
NESR’s acquisitions, as well as the team Sherif has assembled along
with the NPS and GES teams.”
The transaction is expected to be completed by
the end of the year, pending stockholder approval and other
customary closing conditions.
Advisors
J.P. Morgan acted as the sole financial advisor
to NESR on its acquisitions of NPS and GES. Citigroup and
Freshfields Bruckhaus Deringer acted as the sell-side advisers to
NPS. Maxim Group LLC and National Bank of Canada Financial Inc.
acted as underwriters.
About National Energy Services Reunited
Corp.www.nesrco.com
NESR is a Special Purpose Acquisition Company
(“SPAC”) formed in the British Virgin Islands and headquartered in
Houston, Texas. The company raised $229 million in its IPO to
acquire companies in the energy services sector globally. NESR is
led by CEO Sherif Foda, who is also one of the shareholders of the
company.
About National Petroleum
Services www.npsintl.com
NPS is a leading regional provider of integrated
energy services in the MENA and Asia Pacific regions, and currently
operates in 12 countries across the MENASA region and through
various regional subsidiaries. NPS’ service lines include wells
services, electric line logging, well testing, and integrated
drilling and workover operations. NPS has a highly skilled
workforce of more than 1,600 employees from 40 different
nationalities.
About Gulf Energy
SAOCwww.gulfenergy-int.com
GES is a provider of high-quality integrated
drilling and completions oilfield service solutions in the Middle
East and North Africa region, with a workforce of approximately
1,200 people. GES has established relationships with a majority of
the operators in Oman as well as with other international clients.
As a pioneer in many oilfield services technologies, GES has a
successful track record of servicing complex wells.
Forward Looking Statements
This communication includes certain statements
that may constitute "forward-looking statements" for purposes of
the federal securities laws. Forward-looking statements include,
but are not limited to, statements that refer to projections,
forecasts or other characterizations of future events or
circumstances, including any underlying assumptions. The words
"anticipate," "believe," "continue," "could," "estimate," "expect,"
"intends," "may," "might," "plan," "possible," "potential,"
"predict," "project," "should," "would" and similar expressions may
identify forward-looking statements, but the absence of these words
does not mean that a statement is not forward-looking.
Forward-looking statements may include, for example, statements
about: the parties' ability to effect the business combination; the
benefits of the business combination; the future financial
performance of NESR following the business combination; and changes
in GES and NPS strategy, future operations, financial position,
estimated revenues, and losses, projected costs, prospects, plans
and objectives of management. These forward-looking statements are
based on information available as of the date of this press
release, and current expectations, forecasts and assumptions, and
involve a number of judgments, risks and uncertainties.
Accordingly, forward-looking statements should not be relied upon
as representing NESR’s views as of any subsequent date, and NESR
does not undertake any obligation to update forward-looking
statements to reflect events or circumstances after the date they
were made, whether as a result of new information, future events or
otherwise, except as may be required under applicable securities
laws. You should not place undue reliance on these forward-looking
statements. As a result of a number of known and unknown risks and
uncertainties, NESR’s actual results or performance may be
materially different from those expressed or implied by these
forward-looking statements. Some factors that could cause actual
results to differ include: (i) the occurrence of any event,
change or other circumstances that could delay the business
combination or give rise to the termination of the definitive
agreements relating to the business combination; (ii) the
outcome of any legal proceedings that may be instituted against
NESR following announcement of the business combination;
(iii) the inability to complete the business combination due
to the failure to obtain approval of the stockholders of NESR, or
other conditions to closing in the definitive agreements relating
to the business combination; (iv) the risk that the proposed
business combination disrupts current plans and operations of NESR,
NPS or GES as a result of the announcement and consummation of
the business combination; (v) NESR's ability to realize the
anticipated benefits of the business combination, which may be
affected by, among other things, competition and the ability of
NESR to grow and manage growth profitably following the business
combination; (vi) costs related to the business combination;
(vii) changes in applicable laws or regulations; and
(viii) the possibility that NESR, NPS or GES may be adversely
affected by other economic, business, and/or competitive
factors.
No Offer or Solicitation
This communication is for informational purposes
only and shall not constitute an offer to sell or the solicitation
of an offer to buy any securities pursuant to the proposed business
combination and other transactions described herein or otherwise,
nor shall there be any sale of securities in any jurisdiction in
which the offer, solicitation or sale would be unlawful prior to
the registration or qualification under the securities laws of any
such jurisdiction. 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 Information for Investors and
Stockholders
In connection with the proposed business
combination, NESR intends to file a proxy statement with the SEC.
The definitive proxy statement and other relevant documents will be
sent or given to the stockholders of NESR and will contain
important information about the proposed business combination and
related matters. NESR stockholders and other interested persons are
advised to read, when available, the proxy statement in connection
with NESR's solicitation of proxies for the meeting of stockholders
to be held to approve the proposed business combination because the
proxy statement will contain important information about the
transaction. This is not a solicitation of any vote or approval.
When available, the definitive proxy statement will be mailed to
NESR stockholders as of a record date to be established for voting
on the proposed business combination. Stockholders will also be
able to obtain copies of the proxy statement, without charge, once
available, at the SEC's website at www.sec.gov.
Participants in the
Solicitation
NESR and its directors and officers may be
deemed participants in the solicitation of proxies of NESR
stockholders in connection with the proposed business combination.
NESR stockholders and other interested persons may obtain, without
charge, more detailed information regarding the directors and
officers of NESR in its final prospectus filed with the SEC on May
12, 2017. Additional information will be available in the
definitive proxy statement when it becomes available.
For inquiries regarding NESR, please contact:
Joseph Caminiti or Steve Calk
Alpha IR Group
312-445-2870
NESR@alpha-ir.com
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