NESR Agrees to Acquire Action Energy Company Businesses in Kuwait
01 Apr 2021
HOUSTON, TX / ACCESSWIRE / April 1, 2021 / National Energy Services Reunited Corp. ("NESR" or the "Company") (NASDAQ:NESR) (NASDAQ:NESRW), a national, industry-leading provider of integrated energy services in the Middle East and North Africa ("MENA") region, today announced a preliminary agreement pursuant to which NESR will acquire specific oilfield service lines (the "Businesses") of Action Energy Company W.L.L. ("Action"), one of the leading indigenous oilfield services companies in Kuwait with multiple oilfield services contracts across both drilling and production operations. The transaction, comprising oil services contracts in certain services lines worth more than $200 million, is planned to be operationally effective from April 1, 2021. Combining with NESR's existing portfolio, the transaction will position NESR to become a top-tier provider in Kuwait, with operations across the Production and Drilling and Evaluation segments. In addition, by the acquisition of the Businesses, NESR will enter a new service line offering across the region.
Under the terms of the agreement, NESR will acquire the Businesses with cash consideration of approximately $36 million paid at closing and an additional cash payment of approximately $13 million paid six months following the initial closing, subject to certain conditions, for total cash consideration of around $50 million. The agreement also includes additional earnouts of approximately $2 million to be paid over the contracts' terms. The transaction implies a multiple of less than 4 times EBITDA and is expected to close during the second quarter of 2021.
Sheikh Mubarak A. M. Al Sabah, Vice Chairman, Action Group Holdings (KSCC) and Chairman, Action Real Estate Company (KSCC), commented, "we have been an innovative industry leader and blazed a new path in every business we have undertaken, the latest is that of Oil Services. I am very pleased to see the culmination of these discussions and for NESR to take over these businesses which we have seeded and grown in such a short period." Sheikh Mubarak A. M. Al Sabah added, "I believe with NESR's expertise, regional scale, and technology portfolio, in conjunction with the team and business we have built-in Action, the oil services space in Kuwait will tremendously benefit from this partnership, and I wish them the best of luck for the future."
"I would like to first thank Sheikh Mubarak on his visionary leadership and guidance to make this possible," said Sherif Foda, Chairman, and CEO of NESR. "Over the last couple of years, NESR, both organically and inorganically, went from a standing start to now being one of the major service providers in the country covering the Production and Drilling and Evaluation segments. I am very pleased with the richness of the contracts Action has managed to secure, spanning the coming 4 to 5 years, that will enable us to build on with our technology and equipment in the region. In addition, our entry into the drilling fluids service line in a significant way will support the expansion to neighboring countries. I strongly believe that with our shared vision and the support of our esteemed customer, we will be able to transform the oilfield services landscape in Kuwait as we have done in other countries."
About National Energy Services Reunited Corp.
Founded in 2017, NESR is one of the largest national oilfield services providers in the MENA and Asia Pacific regions. With over 5,000 employees representing more than 60 nationalities in over 15 countries, the Company helps its customers unlock the full potential of their reservoirs by providing Production Services such as Hydraulic Fracturing, Cementing, Coiled Tubing, Filtration, Completions, Stimulation, Pumping, and Nitrogen Services. The Company also helps its customers to access their reservoirs in a smarter, more efficient manner by providing Drilling and Evaluation Services such as Drilling Downhole Tools, Directional Drilling, Fishing Tools, Testing Services, Wireline, Slickline, Fluids, and Rig Services.
About Action Energy Company W.L.L.
Action Energy Company W.L.L. is a leading oilfield services provider with contracts in Kuwait and is a subsidiary of Action Real Estate Company KSCC, which is part of Action Group Holdings, KSCC, a flagship holding company in the MENA Region, and which also operates in Australia and Europe in Real Estate, Hospitality, Information Technology, and Oil Services.
Established in Kuwait in 2014, Action employs an expanding fleet of oil services units in Kuwait. Strategically positioned, Action management and operational team of highly experienced industry professionals strives to provide safe, efficient drilling and work-over services to our clients in Kuwait and MENA region.
Freshfields Bruckhaus Deringer LLP and Meysan Partners served as legal advisors to NESR. International Counsel Bureau - Lawyers and Legal Consultants served as legal advisors to Action.
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The forward-looking statements are not meant to predict or guarantee actual results, performance, events, or circumstances and may not be realized because they are based upon the Company's current projections, plans, objectives, beliefs, expectations, estimates, and assumptions and are subject to a number of risks and uncertainties and other influences, many of which the Company has no control over. Actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of these risks and uncertainties. Factors that may influence or contribute to the accuracy of the forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation: the ability to recognize the anticipated benefits of the Company's recent business combination transaction, which may be affected by, among other things, the price of oil, natural gas, natural gas liquids, competition, the Company's ability to integrate the businesses acquired and the ability of the combined business to grow and manage growth profitably; integration costs related to the Company's recent business combination; estimates of the Company's future revenue, expenses, capital requirements and the Company's need for financing; the risk of legal complaints and proceedings and government investigations; the Company's financial performance; success in retaining or recruiting, or changes required in, the Company's officers, key employees or directors; current and future government regulations; developments relating to the Company's competitors; changes in applicable laws or regulations; the possibility that the Company may be adversely affected by other economic and market conditions, political disturbances, war, terrorist acts, international currency fluctuations, business and/or competitive factors; risks stemming from COVID-19; and other risks and uncertainties set forth in the Company's most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission (the "SEC").
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For inquiries regarding NESR, please contact:
Christopher Boone or Dhiraj Dudeja
National Energy Services Reunited Corp.
SOURCE: National Energy Services Reunited Corp
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