Flint Energy Services Ltd. has entered into a definitive agreement to Carson Energy Services Ltd, a privately held energy services company based in Saskatchewan, Canada.
The purchase price to be paid at closing is comprised of $112 million in cash and 2,121,212 Flint common shares, plus up to an additional $30 million earn-out spread over the next three years, subject to closing adjustments. Payment of the earn-out portion of the purchase price is dependent upon Carson meeting EBITDA targets of $40 million per year.
Carson, established in 1974 and based in Lampman, Saskatchewan, is one of Saskatchewan's largest private companies in the energy services sector with operations in 14 locations in Saskatchewan, Manitoba and eastern Alberta.
Carson offers pipeline construction, fabrication, civil and facility construction, oilfield maintenance, pipeline integrity, horizontal directional drilling, trucking and tubular management, environmental and safety sales and services.
Carson's well respected safety performance, outstanding employees, strategic services and operations, and strong customer service will provide a platform for Flint to expand its energy services reach in Saskatchewan and Manitoba.
As Flint's Saskatchewan operations are based in three locations offering a limited suite of services, there will be little overlap or duplication in operations.
In addition to the oil and gas industry, Flint's experience with large and complex projects in the oil sands, combined with Carson's local customer relationships, presents a new opportunity for Flint to expand its major projects construction and maintenance capabilities in the largest potash production region in the world.
Flint anticipates that the acquisition will add over $220 million in annual revenues and $40 million of EBITDA going forward. There are numerous incremental opportunities for both Flint and Carson to offer their existing services across the expanded operational footprint.
Flint's fluid haul, large construction projects, rig moving, and maintenance services are some examples of services that can grow across the Carson operations, while Carson's horizontal directional drilling and fabricating capacity can be offered through Flint's existing operations.
"I am pleased that we have found the right strategic partner for Carson to accelerate its growth plans and provide for smooth succession in the future,” said Ron Carson, President of Carson Energy Services. The combination of Flint and Carson will allow our employees to continue to succeed and offer expanding services to all of our customers in the energy market.”
WJ (Bill) Lingard, President and CEO of Flint said, "Flint sees this combination with Carson as a strategic opportunity for growth, tied to the increasing oil drilling and production activities we are seeing in Saskatchewan. Flint and Carson share similar cultures of safety, business ethics, and support for its people, communities and customers. Our combined strengths and resources will make us the largest energy services provider in Saskatchewan, providing a strong service platform for our customers in this region, increasing the service lines available to the producers of southeast Saskatchewan and Manitoba.”
