Frank’s International entered into a definitive US$321 million merger agreement to acquire Blackhawk Group Holdings, Inc., the ultimate parent company of Blackhawk Specialty Tools, a provider of well construction and well intervention services and products.
The merger consideration comprises a combination of approximately US$150 million of cash on hand and approximately 12.8 million shares of Frank’s common stock, on a cash-free, debt-free basis (with approximately $80 million of Blackhawk debt being repaid at closing with proceeds from the transaction), subject to adjustment. Based on the Frank’s closing price on 6 October 2016, the transaction is valued at approximately $321 million.
Blackhawk is being purchased from Bain Capital Private Equity, a global private investment firm, which acquired the business together with management in 2013.
Frank’s expects that Blackhawk’s specialty cementation tools will augment its tubular running services business by providing Frank’s the opportunity to diversify its offerings and emerge as a leader in a new business line and a significantly larger addressable market. Blackhawk also provides well intervention products through its line of brute packers and related products, and is continuing its development of products for onshore and offshore applications.
Gary Luquette, Frank’s president and CEO said, “Together we will continue to offer the same reliable service customers expect, while furthering customer relationships with new products and services across the Frank’s global footprint. Joining Blackhawk’s cementing tool expertise with Frank’s global tubular running services franchise will allow us to offer customers worldwide a more integrated suite of best-in-class products and services to address their well construction needs across all environments from land to shelf to deepwater.”
Frank’s is focused on driving revenue synergies, and expects the acquired products and services to benefit from Frank’s global presence, operating excellence and strong balance sheet, significantly enhancing the growth potential of the business. Additionally, over time, Frank’s expects to realize the benefits of increased cost efficiency by providing a broader set of product offerings through its combined global infrastructure and optimizing supply chain operations to take advantage of the expanded business, the company said.
The transaction is subject to regulatory approvals and other customary closing conditions. It is anticipated that the closing of the transaction will occur during Q4 2016.
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