Basic Energy Services Closes G&L Tool Asset Purchase
Basic Energy Services, Inc. has closed on the purchase of substantially all of the operating assets of G&L Tool, Ltd., an oilfield services fishing and rental tool business headquartered in Abilene, Texas, for a total consideration of $58 million in cash. The final purchase price was lower than the previously reported estimated purchase price of approximately $80 million as Basic did not acquire approximately $15 million of G&L's working capital and substituted an earn-out that resulted in the remainder of the reduction of the initial purchase price. This earn-out is based on meeting an annual EBITDA (earnings before interest, taxes, depreciation and amortization) threshold and is payable over a five-year period up to an aggregate amount of $21 million. The assets being acquired from G&L generated approximately $39 million in revenue during 2005.
Ken Huseman, Basic's President and CEO stated, "We are excited that the G&L deal is now completed. During the due diligence process following the signing of the letter of intent, I had the opportunity to visit several of G&L's stores and meet many of their people at all levels of the organization. My visits confirmed G&L's reputation as a great organization which I think will fit well with our company. We look forward to G&L continuing to operate under the same management and operating systems that brought the company to this point while we provide them the capital and infrastructure to move into some of our other markets."
Basic Energy Services, with a fleet of more than 300 well servicing rigs, provides a range of well site services to oil and gas drilling and producing companies throughout the major oil and gas regions in Texas, Louisiana, Oklahoma, New Mexico and the Rocky Mountain States.
G&L was one of the largest independently owned fishing and rental tool
companies in the United States with 16 locations in Texas, Oklahoma, New
Mexico and Colorado.