Oil States to acquire GEODynamics for $525 million
HOUSTON -- Oil States International, Inc., announced today that it has entered into a definitive agreement to acquire GEODynamics, Inc., a provider of oil and gas perforation systems and downhole tools in support of completion, intervention, wireline and well abandonment operations. GEODynamics is being acquired from funds managed by Lime Rock Partners, members of its management team and other investors.
Oil States anticipates that GEODynamics' product innovation and collaborative relationships with E&P operators will further augment its research and development efforts and lead to enhancements in its consumable product offerings in the growing markets for technology-backed products used in complex well completions. Furthermore, Oil States believes GEODynamics is a market leading, technically differentiated specialty completion solutions provider with strong brand recognition. GEODynamics provides a robust growth pipeline with initiatives to expand their existing product offerings and geographic footprint.
Total transaction consideration of $525 million consists of a combination of $300 million of cash at closing (expected to be funded by borrowings under Oil States' amended revolving credit facility, with permanent financing options to be considered in 2018), the issuance of 8.66 million shares of Oil States common stock (valued at $200 million, based on a twenty day volume weighted average price) and a $25 million unsecured promissory note payable to the sellers, bearing interest at 2.5% per annum with a maturity date 18 months after the closing of the transaction. The acquisition is on a cash-free, debt-free basis with approximately $24 million of GEODynamics' debt being repaid by the sellers at closing with proceeds from the transaction.
Oil States expects the acquired products and technology to benefit from Oil States' global footprint and presence, history of operating excellence and strong balance sheet, thereby enhancing the growth potential of the combined businesses. Additionally, over time, Oil States expects to realize the benefits of increased cost efficiencies by providing a broader set of product offerings through its combined global infrastructure while optimizing supply chain operations.
The transaction is subject to regulatory approvals and other customary closing conditions. It is anticipated that the closing of the transaction will occur during the first quarter of 2018.
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