STEP Energy Services Ltd. said Feb. 22 it reached an agreement to acquire Tucker Energy Services Holdings Inc., a Houston-based fracturing and completion solutions company, for $275 million cash.
STEP, based in Calgary, Alberta, said the acquisition gives it an "efficient and strategic entry" into the U.S. fracking market in key high-growth basins. The deal also complements the company’s existing coiled tubing presence in the Permian Basin and Eagle Ford Shale.
Tucker is a privately owned and geographically focused provider of fracking and completion solutions operating primarily in the Scoop/Stack and Woodford shale plays in Oklahoma. Additionally, the company has historical operating experience in the Haynesville play, according to STEP’s press release.
"The acquisition represents an incredibly exciting and unique opportunity for STEP and its shareholders. Expansion into the U.S. fracturing and completion solutions business has been a strategic goal and part of the company’s growth plan," said Regan Davis, STEP’s president and CEO, said in a statement. "The acquisition of Tucker provides STEP with a launching pad into the U.S. fracturing market with established exposure to high-growth plays such as the Scoop/Stack and Woodford and a loyal, high-quality client base."
Tucker’s assets include four fracturing spreads representing 192,500 horsepower (hp), two coiled tubing spreads and 15 wireline units.
Pro forma the acquisition, STEP will have total fracturing capacity of 490,000 hp (an increase of 65%), a total of 22 coiled tubing spreads (an increase of 10%) and 15 wireline units.
Tucker owns a field service center in McAlester, Okla., that is the base for its fracturing spreads, coiled tubing units and cased-hole wireline logging services. The company has an additional facility in Abilene, Texas, and operates a research and development facility in Tulsa, Okla., that also provides a base for openhole wireline and other related services. Tucker currently employs about 400 professionals.
The members of the senior leadership team of Tucker, who have been instrumental in building the U.S. business from the company’s inception, have agreed to join STEP and will continue to operate the business, the release said.
STEP’s acquisition of Tucker is not subject to any financing condition. STEP expects to fund the transaction with cash on hand and the net proceeds of a $50 million offering of subscription receipts. The balance will be funded from borrowings under the company’s new credit facilities.
CIBC Capital Markets and Peters & Co. Ltd. are joint book-runners for STEP’s equity offering.
In addition, CIBC Capital Markets was exclusive financial adviser to STEP for the acquisition. Simmons & Co. International, energy specialists of Piper Jaffray, were Tucker’s exclusive financial adviser.