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Sale of a Private Equity-Backed Energy Services Company

Client Description

Simmons & Company International's client was a private equity firm that owned a North American land-focused energy services company. The company provided pressure pumping, coiled tubing, workover rigs and auxiliary services, such as fluid handling and wellsite construction.

Objective

Our client had owned the company for three years and had grown the business both organically and through acquisitions to a point where it was a meaningful player in each of its core markets. Not only did our client want to gain some liquidity for their investment, but they wanted to structure a transaction that could capture some upside from a market that they believed was ramping up. We suggested taking stock in a larger public company, providing a more liquid currency while retaining upside market potential.

Transaction Process

We performed extensive diligence on our client's business and discussed multiple, potential transaction partners. Our discussions resulted in Simmons & Company targeting five strategic groups where the stock of the potential acquirer was seen as having better risk/reward characteristics than the portfolio company as a stand-alone entity. We prepared detailed marketing materials and organized face-to-face meetings with each party, assessed each party's proposal, assisted in negotiations and closing the transaction.

Outcome

A publicly traded energy services company issued stock and cash to purchase the portfolio company from the private equity firm. Our client became a significant minority shareholder of the acquiring company, gained a seat on the company's board, and was able to realize considerable upside through taking stock in the transaction.