KLX Energy Services Announces the Acquisitions of Two Premier Oilfield Services Companies; Raises 2019 Guidance
March 20 2019 - 3:20PM
KLX Energy Services Holdings, Inc. (“KLX Energy Services” or the
“Company”) (NASDAQ:KLXE) announced today that it has completed the
acquisitions of Red Bone Services (“Red Bone”), a premier provider
of oilfield services primarily in the Mid-Con, providing, non-frac
high pressure pumping, thru-tubing, fishing and certain other
services, and Tecton Energy Services (“Tecton”), a leading provider
of flowback, drill-out and production testing services, operating
primarily in the greater Rocky Mountains.
The aggregate acquisition price of the Red Bone and
Tecton acquisitions was approximately $82 million, comprised of
approximately 2.1 million shares of the Company’s common stock and
$14.5 million in cash to the sellers, plus approximately $14.5
million for the retirement of debt, representing a multiple of
approximately 4.8 times the companies’ combined full year 2018
EBITDA. The Company expects to realize annualized EBITDA synergies
of approximately $12 million representing a proforma synergized
EBITDA multiple of approximately 3 times EBITDA. The shares are
subject to restrictions on public re-sale from a minimum of 6
months to a maximum of 24 months, subject to acceleration upon the
occurrence of certain events. Both companies have very low capital
intensity.
Amin J. Khoury, Chairman and Chief Executive
Officer of KLX Energy Services stated, “The acquisitions of Red
Bone and Tecton are value-creating transactions for our
shareholders and further advance our strategic priorities to grow
our customer base and to enhance and broaden out the services we
provide to our customers. The Red Bone acquisition provides KLX
Energy Services with a substantially stronger geographical presence
in the Mid-Con, along with important potential market synergies as
we roll out our broad portfolio of services to Red Bone’s
customers. Both Red Bone and Tecton have strong relationships with
quality customers, which provides significant cross-selling
opportunities.”
Mr. Khoury continued, “The addition of the Red Bone
team, which has deep roots and an excellent reputation in the
Mid-Con, is expected to facilitate the roll out of our broad range
of product service lines to an expanded, high quality customer
base. The addition of the Tecton business and its highly competent
operating team creates the opportunity to roll out Tecton’s
flowback, filtration and testing services to our other geographic
regions.”
The Company is today raising its fiscal year 2019
revenue and Adjusted EBITDA guidance to approximately $800 million
in revenues and $200 million in Adjusted EBITDA to reflect a
portion of the contribution of the acquisitions over the balance of
the year.
About KLX Energy Services
KLX Energy Services is a leading U.S. onshore
provider of mission critical oilfield services focused on
completion, intervention and production activities for the most
technically demanding wells. KLX Energy Services’ experienced and
technically skilled personnel are supported by a broad portfolio of
specialized tools and equipment, including innovative proprietary
tools developed by the Company’s in-house R&D team. KLX Energy
Services supports its customers on a 24/7 basis from over 35
service facilities located in the major onshore oil and gas
producing regions of the United States.
Forward-Looking Statements
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Exchange Act. Such forward-looking
statements involve risks and uncertainties. The Company’s actual
experience and results may differ materially from the experience
and results anticipated in such statements. Factors that might
cause such a difference include those discussed in the Company’s
filings with the SEC, which include its Annual Report on Form 10-K,
Quarterly reports on Form 10-Q and Current Reports on Form 8-K. For
more information, see the section entitled “Forward-Looking
Statements” contained in the Company’s Annual Report on Form 10-K
and in other filings. The forward-looking statements included in
this news release are made only as of the date of this news release
and, except as required by federal securities laws and rules and
regulations of the SEC, the Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
KLX ENERGY SERVICES HOLDINGS,
INC. |
RECONCILIATION OF 2019 GUIDANCE; OPERATING
EARNINGS |
TO ADJUSTED EBITDA |
(In Millions) |
|
|
|
2019 Guidance |
|
(Approximate Amounts) |
Operating earnings |
$ |
120 |
Depreciation and
amortization |
|
61 |
Non-cash
compensation |
|
19 |
Adjusted EBITDA |
$ |
200 |
|
|
CONTACT:Michael PerlmanTreasurer
and Senior Director, Investor RelationsKLX Energy Services
Holdings, Inc.(561) 273-7148
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