Forum Energy Technologies has entered into a definitive agreement to acquire Variperm Energy Services for consideration of $150 million 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, 2023. The transaction is expected to close in January 2024 and is subject to customary closing conditions and Canadian regulatory approval.

“We are excited to have Variperm join the FET family. Variperm is a leading manufacturer of customized downhole technology solutions, providing sand and flow control products for heavy oil applications. The company’s suite of differentiated technology is designed, engineered, and custom-manufactured to meet the stringent requirements of producers,” said Neal Lux, President and CEO of FET. “This highly accretive acquisition is expected to transform FET’s profitability and margin profile while adding meaningful scale to our business.”

Mr. Lux continued, “Importantly, our balance sheet remains strong following this transaction. At closing, we expect our net leverage ratio to be 1.9x with liquidity of $142 million. We expect this to provide ample capital to fund and grow the combined business. Consolidated 2024 free cash flow and EBITDA growth is expected to reduce net leverage to between 1.0x and 1.3x by the end of 2024.”

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. We expect Variperm’s employees to continue their tradition of excellent customer service and innovation as part of the FET family.