Fort Worth-based FTS International Inc. (NYSE American: FTSI), a hydraulic fracturing service company, on Oct. 22 announced that it has entered into a definitive agreement to be acquired by ProFrac Holdings LLC, a leading oilfield services company, in an all-cash transaction that valued at $407.5 million, including payments to outstanding warrants.
Under the terms of the agreement, which has been unanimously approved by FTSI’s Board of Directors, FTSI stockholders will receive $26.52 per share of FTSI common stock in cash. This represents approximately a 14% premium over the company’s 60-day volume-weighted average closing share price through Oct. 21, 2021.
The transaction will create one of the largest completions focused service companies in the U.S. oil and gas industry, according to a news release.
“The Board and executive leadership team have carefully evaluated a range of strategic alternatives focused on maximizing value and determined that this cash offer from ProFrac, which provides immediate and certain value at an attractive price, is in the best interest of all stockholders,” said Eugene Davis, Chairman of the Board of FTSI. “This transaction is the result of a thoughtful analysis of FTSI’s best long-term position for stockholders. At the same time, our Board recognizes industry dynamics remain fluid and believes that the 45-day ‘go-shop’ provides us the optimal structure to execute this transaction. I’m confident this combination will create a stronger organization to successfully compete in our rapidly evolving industry.”
Michael Doss, CEO of FTSI, added, “The combination of these two companies creates a leading completions focused company that will be in a better position to succeed through cycles, deliver the best level of service to our customers and retain the industry’s best talent.”
“We have long respected FTSI and the people that have guided them through the past few years to the position of strength they are in today,” said Ladd Wilks, CEO of Willow Park-based ProFrac. “Together, these two organizations, which share an employee-centric vision and approach to operating in a dynamic industry, will create the scale needed to deliver the reliable, efficient and technology-led service our customers need.”
The transaction with ProFrac is expected to close in the first quarter of 2022, subject to customary closing conditions, including approval by FTSI stockholders and receipt of regulatory approvals. The company’s obligation to close the transaction is also conditioned upon approval by a majority of the company’s stockholders, excluding its largest stockholder THRC Holdings, which is an affiliate of ProFrac. Upon closing of the transaction, the company’s common stock will no longer be listed on any public market.
Ducera Partners LLC is serving as financial advisor to FTSI and Davis Polk & Wardwell LLP is serving as its legal counsel. Piper Sandler & Co. is serving as financial advisor to ProFrac and Vinson & Elkins LLP is serving as its legal counsel.
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