KLX Energy Services Holdings entered into a definitive agreement to acquire Motley Services, a large diameter coiled tubing service provider, serving customers primarily in the Southwestern U.S.
Motley is primarily focused on providing high-quality large diameter coiled tubing services specializing in complex, longer lateral horizontal wells.
Amin J. Khoury, Chairman, CEO and President of KLX Energy Services said, “The acquisition of Motley represents an entry into the coiled tubing market for KLXE, and significantly strengthens the Company’s current portfolio of well completion services. Motley’s business will enhance our integrated platform by adding large diameter coiled tubing services initially into the Company’s Southwest region, and then rolling it out to the rest of our geographic regions.”
The acquisition price of $148 million represents a multiple of approximately 3.2x the mid-point of Motley’s third quarter 2018 EBITDA guidance, on an annualized basis. The acquisition is expected to close in late October or early November 2018 and to be strongly accretive to KLX Energy Services earnings in 2018 and 2019.
Under the terms of the agreement, KLX Energy Services will pay Motley total consideration of $148 million, consisting of $139 million in cash and $9 million of KLX Energy Services common stock. The company intends to fund the cash portion of the purchase price with the net proceeds of a debt financing. According to a related 8-K filing, JPMorgan amended the company’s $100 credit facility to support the acquisition
Freshfields Bruckhaus Deringer US is acting as legal counsel to KLX Energy Services. Simmons & Company International, Energy Specialists for Piper Jaffray, are acting as the exclusive financial advisor to Motley and Locke Lord is acting as legal advisor to Motley.
