149 0 Kommentare Essential Energy Services to be Acquired by Element Technical Services

CALGARY, Alberta, Sept. 15, 2023 (GLOBE NEWSWIRE) -- Essential Energy Services Ltd. (TSX: ESN) (“Essential” or the “Company”) announces that it has entered into a definitive amalgamation agreement (the “Amalgamation Agreement”) with Element Technical Services Inc. (“Element”) under which Element, through a wholly-owned subsidiary, will acquire all of the issued and outstanding common shares of Essential (each, an “Essential Share”) for a purchase price of $0.40 per Essential Share, payable in cash (the “Consideration”). Element is a privately held entity that has fracturing and coiled tubing operations in western Canada and the United States.

Garnet Amundson, President and CEO of Essential commented, “We have successfully led Essential and its predecessor entities through almost two decades of turbulent oilfield service industry and capital markets dynamics. Throughout this long history, we have strived to maximize value for stakeholders of our business. As a part of our normal course of business, and in particular over the past seven years, Essential has actively evaluated and explored numerous opportunities, culminating in this transaction with Element. We believe this transaction provides compelling value for Essential’s shareholders and enhanced product offerings to Essential’s customers.”

Strategic Rationale - Attractive Value for Essential Shareholders

The Consideration implies an enterprise value for Essential of approximately $77.7 million, including all transaction-related expenses. The resulting transaction metric is estimated to be 4.1 times trailing twelve-month EBITDAS⁽¹⁾ as of June 30, 2023.

All Cash Premium to Market Trading Price

The Consideration represents a premium of approximately 12% to Essential’s 20-day volume weighted average trading price on the Toronto Stock Exchange (the “TSX”) and a premium of approximately 10% to Essential’s closing price as of close of markets on September 14, 2023.

The Amalgamation Agreement and Approvals

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Element will, among other things, through 2544592 Alberta Ltd., (“Subco”), a wholly-owned subsidiary of Element, acquire all of the Essential Shares by way of a statutory amalgamation (the “Amalgamation”). Pursuant to the terms of the Amalgamation Agreement, Essential will amalgamate with Subco, with the amalgamated entity (“Amalco”) becoming a wholly-owned subsidiary of Element. Subject to the terms of the Amalgamation Agreement, each holder (collectively, the “Essential Shareholders”) of Essential Shares (other than any Essential Shareholder who validly exercises dissent rights in relation to the Amalgamation) will, upon completion of the Amalgamation, receive one redeemable preferred share of Amalco (each, an "Amalco Redeemable Preferred Share") for each Essential Share held by such Essential Shareholder and the Amalco Redeemable Preferred Shares will each be immediately redeemed for $0.40 in cash.

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