Forum Energy acquires Variperm Energy Services

Forum Energy has entered into a definitive agreement to acquire Variperm Energy Services for consideration of $150M of cash and 2 million shares of FET‘s common stock, reflecting a valuation of approximately 3.7x Variperm’s trailing twelve months EBITDA as of September 30. The transaction is expected to close in January 2024. Combined company financial highlights include: revenue of $873M, up 17%; adjusted EBITDA of $121M, up 77%; adjusted EBITDA margin of 14%, up 470 basis points. Founded in 1969 and headquartered in Calgary, Canada, Variperm has been a portfolio company of SCF Partners since 2014. Variperm has approximately 290 employees across eight locations in North America. The cash consideration for the transaction will be funded from $90M of cash on hand and borrowings under the ABL credit facility, and a $60M seller term loan. In conjunction with the acquisition, FET’s lenders agreed to amend the company’s ABL credit facility to permit the Variperm acquisition, increase the aggregate revolving commitments from $179M to $250M, extend the maturity date to September 2028, and allow the seller term loan. The amendment is conditioned upon the closing of the acquisition.