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National Energy Services is buying SAPESCO
Posted on Friday, 14 February 2020 14:35
National Energy Services Reunited has reached an agreement to acquire the largest indigenous oilfield group in Egypt Sahara Petroleum Services Company (SAPESCO) for around USD 58.00 million.

Under the terms of the transaction, the payment comprises cash and shares, with the buyer offering USD 27.00 million in cash and issuing its own stock via two earnout tranches.

The initial consideration, as well as USD 22.00 million long term debt repayment, will be funded with cash from National Energy Services’ balance sheet and the existing revolving credit facility.

In addition, the business will assume USD 8.00 million of short-term debt from an existing local facility.

The earnout will represent a minimum price of USD 10.00 per share based on 2019 earnings before interest, taxes, depreciation and amortisation of USD 20.00 million and performance metrics, using a multiple of 4.35x.

National Energy Services believes the addition of SAPESCO will create a significant player in the Egyptian oil and gas industry, where the acquiror does not currently operate.

It will also add industrial and chemical services within the mainstream and downstream sectors to its portfolio, while expanding well operations in Saudi Arabia, the United Arab Emirates, Libya and Kuwait.

Founded in 2017, National Energy Services is one of the largest providers of oilfield capabilities in the Middle East and North Africa and Asia Pacific regions.

It has over 4,000 employees across 15 countries and offers support in cementing, coiled tubing, filtration, pumping and nitrogen.

Zephyr, the M&A database published by Bureau van Dijk, shows there were 1,179 deals worth USD 163.44 billion targeting the oil and gas extraction industry announced worldwide in 2019.

Of these, only five valued at an aggregate USD 882.00 million featured businesses based in the Middle East.

The largest such deal involves the Oman Oil Company issuing new shares via a private placing worth OMR 302.31 million (USD 782.98 million).

© Zephus Ltd