Expro (NYSE: XPRO), a leading provider of energy services, today
announced it had entered into a definitive agreement (subject to
customary closing conditions and working capital adjustments) to
acquire Coretrax, a technology leader in performance drilling tools
and wellbore cleanup, well integrity and production optimization
solutions, from an investment group led by Buckthorn Partners.
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Total consideration to be paid at closing is approximately $210
million, including at least $75 million of cash and up to 6.75
million newly issued Expro common shares. The cash component of the
proposed transaction may be increased at Expro’s election, and the
notional value of any equity consideration will be unitized based
on Expro’s thirty trading day volume weighted average price
(“VWAP”) prior to closing, which is expected to occur in the second
quarter of 2024. Excluding possible cost and revenue synergies,
total consideration is approximately 4.7x Coretrax’s estimated 2024
Adjusted EBITDA. Expro is targeting up to $10 million of annual
run-rate cost synergies to be achieved in the first 18 months.
The acquisition of Coretrax will enable Expro to expand its
portfolio of cost-effective, technology-enabled Well Construction
and Well Intervention & Integrity solutions, particularly
across the North and Latin America (NLA), Europe and Sub-Saharan
Africa (ESSA) and Middle East and North Africa (MENA) regions.
Building on Coretrax’s successful 15-year history, the acquisition
will accelerate the availability of the company’s innovative, high
value-adding tools by leveraging Expro’s global operating
footprint.
Within Well Construction, the combination of Coretrax’s field
proven technology offering with Expro’s existing drilling
optimization portfolio provides a comprehensive solutions toolbox.
These solutions include the DAV-MX downhole circulation tool, the
HyPR Holesaver hydraulic pipe recovery system, and the Activated
Drilling Scrapper (ADS) debris recovery system. Within Well
Intervention & Integrity, Coretrax’s brings its best-in-class
expandables business, which includes the only expandables solution
that can be deployed on any of three conveyance systems (coil
tubing, wireline or drill pipe).
Michael Jardon, Expro Chief Executive Officer, said: “We are
thrilled to announce our proposed acquisition of Coretrax, and look
forward to welcoming John Fraser and his teammates to the Expro
family. Coretrax has a complementary offering to Expro with little
overlap and will bolster the portfolio of technology-enabled
services and solutions offered through our Well Construction and
Well Intervention & Integrity product lines, adding significant
value to our clients from innovative technologies that reduce risk
and cost, optimize drilling efficiency, extend the life of existing
well stock, and optimize production.
“The integration of Coretrax’s leading technologies will
strengthen our foothold in ESSA and MENA where both companies have
strong, established positions, and is expected to open new avenues
for growth in NLA and Asia-Pacific. We look forward to leveraging
the complementary capabilities and customer relationships of Expro
and Coretrax to deliver additional value to our customers and other
stakeholders."
John Fraser, CEO at Coretrax said: “I’m excited about the
opportunities the acquisition brings for Coretrax and our team. The
synergies between our respective technology portfolios will enable
us to grow our market share while significantly increasing our
capabilities to tackle the most complex well challenges. We are
proud of the innovation-led approach, strong customer base and
performance history that we developed over the last 15 years, and
we look forward to joining forces with Expro to create greater
value for our customers globally.”
Wells Fargo Securities, LLC is serving as financial advisor to
Expro and CMS Cameron McKenna Nabarro Olswang LLP is acting as
legal counsel on the transaction.
Evercore is serving as financial advisor, Blackwoods is acting
as legal counsel to Coretrax, and Sidley Austin is acting as legal
counsel to Buckthorn Partners on the transaction.
Notes to Editors:
Expro
Working for clients across the entire well life cycle, Expro is
a leading provider of energy services, offering cost-effective,
innovative solutions and what the Company considers to be
best-in-class safety and service quality. The Company’s extensive
portfolio of capabilities spans well construction, well flow
management, subsea well access, and well intervention and integrity
solutions.
With roots dating to 1938, Expro has approximately 8,000
employees and provides services and solutions to leading
exploration and production companies in both onshore and offshore
environments in approximately 60 countries.
For more information, please visit expro.com and connect with
Expro on X (formerly Twitter) @ExproGroup and LinkedIn @Expro.
Coretrax
Headquartered in Aberdeen, UK, Coretrax operates globally with
over 50 technologies and an intellectual property portfolio of 280+
patents across the full lifecycle of the well. These
technology-enabled services provide cost-effective, high impact,
safe solutions to the customer. Coretrax employs approximately 320
people across 11 global locations.
For more information visit coretrax.com
Buckthorn
Buckthorn Partners is a UK investment company focused on
acquiring and growing energy products and services businesses
involved in the energy transition. Since 2014 Buckthorn has made 18
investments across six platforms, providing portfolio companies
with industry experience, a broad industry network, primary
capital, M&A expertise and strategic advice. Working in
partnership with experienced management teams, Buckthorn helps
build successful companies both organically and through
M&A.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release, and oral statements made from time to time
by representatives of Expro Group Holdings N.V. (“the Company”),
may contain certain "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements regarding, among
other things, the estimates and projections regarding the outcome
and benefits of the proposed Coretrax acquisition, Coretrax’s
estimated Adjusted EBITDA for 2024, the Company’s ability to
achieve the anticipated synergies as a result of the proposed
Coretrax acquisition, the timing of the closing of the proposed
Coretrax acquisition and the Company’s future business strategy and
prospects for growth, and are indicated by words or phrases such as
“anticipate,” “outlook,” “estimate,” “expect,” “project,”
“believe,” “envision,” “goal,” “target,” “can,” “will,” and similar
words or phrases. These forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause
actual results, performance or achievements to be materially
different from the future results, performance or achievements
expressed in or implied by such forward-looking statements.
Forward-looking statements are based largely on the Company’s
expectations and judgments and are subject to certain risks and
uncertainties, many of which are unforeseeable and beyond our
control. The factors that could cause actual results, performance
or achievements to materially differ include, among others the risk
factors identified in the Company’s Annual Report on Form 10-K,
Form 10-Q and Form 8-K reports filed with the Securities and
Exchange Commission. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events, historical practice,
or otherwise.
The Company is not able to provide a reconciliation of
Coretrax’s forward-looking Adjusted EBITDA to the most directly
comparable measure in accordance with U.S. generally accepted
accounting principles without unreasonable effort because of the
inherent difficulty in forecasting and quantifying certain amounts
necessary for such a reconciliation, including net income
(loss).
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Expro Group Holdings NV (NYSE:XPRO)
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