Forum Energy Technologies Inc. completed the sale of assets associated with its ABZ and Quadrant valve brands on Jan. 4 for $105 million in cash.
The divestiture, according to Forum Chairman and CEO Cris Gaut, helps position the Houston-based oilfield service company “to thrive in this opportunity-rich market environment.”
“This important transaction significantly improves our liquidity and financial flexibility, and continues the improvements made to Forum’s capital structure during 2020,” Gaut said in a statement on Jan. 4.
Anvil and Smith-Cooper International agreed to acquire the ABZ and Quadrant product families, which, in 2020, generated revenues of approximately $42 million and made an EBITDA contribution of approximately $12 million. As part of the transaction, Anvil and Smith-Cooper will employ the ABZ and Quadrant employees primarily located at the operations located in Kansas and Louisiana.
Forum Energy Technologies is a global oilfield products company, serving the drilling, downhole, subsea, completions and production sectors of the oil and natural gas industry. In each of 2018 and 2019, ABZ and Quadrant represented approximately 15% of the adjusted EBITDA contribution from all Forum product lines, before corporate costs.
Gaut said the sale of the ABZ and Quadrant assets increases Forum’s focus on the growing level of drilling and completion activity, with the U.S. drilling rig count up by over 40% since August 2020.
Pro-forma for the sale proceeds, he added he expects Forum’s net debt to be reduced by over one-third from the $308 million level at Sept. 30, 2020.
“In 2021, we will remain focused on further improving our financial position and continuing quarterly positive free cash flow,” he said.
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