Expro and Frank's to Merge
The privately held international energy services company Expro Group and the global oil services company Frank’s International (NYSE: FI) reported Thursday that they have struck a definitive agreement to combine in an all-stock transaction.
“This transaction unites two established industry players to create a leading service provider with an extensive portfolio across the well lifecycle,” remarked Mike Jardon, CEO 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.”
In a joint statement emailed to Rigzone, Expro and Frank’s stated they bring “highly complementary capabilities” to the combined company. They noted the merged firm will boast a global presence in well construction, well flow management, subsea well access, well intervention, and production services.
“We expect the company’s scale, debt-free balance sheet, and cash flow outlook will allow us to accelerate growth,” continued Jardon. “This will be achieved through an enhanced ability to deliver integrated customer solutions and increased investments in digitalization, autonomous operations, and other technologies.”
The companies pointed out their respective boards of directors have unanimously approved terms of the transaction, which will provide Expro shareholders 7.272 shares of Frank’s for each Expro share owned. Expro shareholders will own approximately 65% of the combined firm, with Frank’s shareholders owning the remaining 35%. The merged company will keep the Expro Group name and trade on the NYSE exchange under the “XPRO” ticker symbol, Expro and Frank’s noted. In addition, they stated the Frank’s brand name will live on in well construction offerings.
Jardon will become CEO of the combined company and will be a member of the board of directors. Frank’s Chairman, President, and CEO Mike Kearney will serve as the combined firm’s chairman and Expro CFO Quinn Fanning will retain his role at the new company. Representatives of both companies will make up the remainder of the new management team. Jardon and Kearney will sit on the combined company’s board, along with five Expro-appointed and two Frank’s-appointed directors.
“Expro and Franks’ share complementary cultures, values, and competencies – all of which support a smooth integration for our customers and employees,” commented Kearney. “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 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.”
Expro and Frank’s expect the transaction to close during the third quarter of this year. They noted the combined company’s operational headquarters will be in Houston, with an operational presence in Lafayette, La., Aberdeen, U.K., and other key locations worldwide. The firm’s principal executive office will be in the Netherlands.
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Senior Editor | Rigzone