KLXE will own approximately 59% stake in the combined company, while QES shareholders will hold about 41%
US-based onshore oilfield services provider, KLX Energy Services (KLXE) has signed an agreement to merge with Quintana Energy Services (QES) in an all-stock merger transaction.
As per the terms of the merger transaction, QES shareholders will receive 0.4844 shares of KLXE common stock for each share of QES common stock.
Upon completion of the transaction, KLXE will own approximately 59% stake in the combined entity, while QES shareholders will hold about 41%.
KLXE president and CEO Tom McCaffrey said: “QES will add directional drilling, snubbing and well control services to KLXE’s already broad range of product and service lines (“PSLs”).
“We will be rationalizing two of the largest fleets of coiled tubing and wireline assets, which will dramatically reduce future capital spending requirements and which will facilitate the pull-through of KLXE’s asset-light products and services.
“Additionally, we will repurpose some of the pressure pumping equipment to support the wireline fleet, which will also be one of the largest in the US, and one of the largest independent providers of directional drilling services.”
The combined company will retain the KLX Energy Services corporate name
The combined company is expected to have an asset-light product and service offering present in all major US onshore oil and gas basins.
It is expected to operate one of the largest US wireline fleets with more than 130 wireline units.
The entity will retain the KLX Energy Services corporate name and the corporate headquarters will be shifted to Houston, Texas.
Subject to KLXE and QES shareholder approval and satisfaction of other customary closing conditions, the transaction is estimated to be completed in the second half of the year.
For the deal, Goldman Sachs has acted as exclusive financial advisor while Freshfields Bruckhaus Deringer has served as legal counsel to KLXE.