Nine Buys Magnum Oil Tools for About $500MM
Nine Energy Service, Inc., an oilfield services company based in Houston, is buying Magnum Oil Tools International, Ltd, the company announced Oct. 15.
The deal is worth $493 million, which includes $334 million cash and Nine common stock (worth $159 million).
The acquisition of Magnum, a downhole technology provider, solidifies Nine as a top provider of completion-focused technology for the oil and gas industry.
“Magnum will propel Nine to a more balanced profile of completion tools, creating excellent barriers to entry while simultaneously building a business that is less labor and less capital intensive and more free cash flow generative,” Nine’s CEO Ann G. Fox said in a release. “This will allow us to navigate a very difficult labor market and supports our approach of blending capital intensity … We believe the combination of capabilities within Nine and Magnum creates a unique and differentiated oilfield service platform…”
Magnum’s CEO Lynn Frazier echoed that sentiment, adding the combination of the two companies “made sense.”
Nine has operating facilities in the Permian, Eagle Ford, SCOOP/STACK, Niobrara, Barnett, Bakken, Marcellus, Utica and Canada.
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