Blank-check company National Energy Services Reunited Corp. (NESR) (NASDAQ: NESR) has entered definitive agreements to combine with Gulf Energy SAOC (GES) and National Petroleum Services (NPS) for an aggregate purchase price of about $1.1 billion, the company said Nov. 12.
The purchase price is about 5.4x the company’s estimated 2018 EBITDA. GES and NPS are leading regional oilfield services companies offering a mix of drilling, completion and production services and equipment in the Middle East and North Africa (MENA) and Asia Pacific regions. The deal will create the only NASDAQ listed oilfield services company in the region.
Following closing, the company’s primary operating locations will be in Dammam, Saudi Arabia, Muscat, Oman and Dubai, UAE, with local headquarters in Houston. NESR is led by Sherif Foda.
More than 3,000 people will be employed in more than a dozen countries across the region. Upon closing, the company plans to retain the leadership of both GES and NPS in management, senior advisory roles or board positions.
NESR is funding the transaction with $229 million of cash it received in its May IPO and equity contributions from SCF Partners and other notable regional and international investors.
The majority of the existing stakeholders in GES and NPS plan to maintain their position in the company and receive a significant portion of their consideration in NESR shares.
NESR has also secured a backstop of up to $100 million to help fund any potential redemptions requested by NESR shareholders in connection with the business combination. The transaction was structured to balance the interests of management, employees and stockholders.