Forum paid a total consideration of $150 million of cash and 2 million shares of FET’s common stock for a total of roughly $190 million. (Source: Shutterstock)
Forum Energy Technologies (FET) announced it completed the acquisition of Variperm Energy Services, a manufacturer of customized downhole technology solutions, providing sand and flow control products for heavy oil applications.
Forum paid a total consideration of $150 million of cash and 2 million shares of FET’s common stock for a total of roughly $190 million. The deal is subject to customary purchase price adjustments.
“This accretive acquisition enhances FET’s downhole and artificial lift product portfolio by adding a leading manufacturer of customized downhole technology solutions in sand and flow control for heavy oil applications,” said Neal Lux, president and CEO of FET. “We expect the combined global footprint of FET and Variperm to benefit both legacy FET and Variperm products. We are excited to welcome the Variperm employees to the FET team.”
Cash consideration for the transaction was funded from cash on hand, borrowings under FET’s asset-based lending (ABL) credit facility and a $60 million seller term loan. The seller term loan will mature in December 2026 and provides for an initial interest rate of 11% that is subject to escalation after the first anniversary of the loan. The seller loan is payable at any time without penalty.
As previously disclosed, FET completed an amendment to the company’s ABL credit facility in November 2023 to permit the Variperm acquisition; increase the aggregate revolving commitments from $179 million to $250 million; extend the maturity date to September 2028; and allow the seller term loan.
FET was represented in the transaction by Goldman Sachs & Co. LLC as financial adviser and Gibson, Dunn & Crutcher LLP and Goodmans LLP as legal counsel. Variperm was represented by TPH&Co., the energy business of Perella Weinberg Partners, as financial adviser and Vinson & Elkins LLP and Bennett Jones LLP as legal counsel.
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