Ranger Energy Services announced that its controlled subsidiary Ranger Energy Acquisition was selected as the successful bidder at an auction to acquire certain assets of Basic Energy Services and its subsidiaries.

The buyer’s winning bid at a competitive auction conducted by Basic under section 363 of the U.S. Bankruptcy Code was for a cash purchase price of $36.65 million. The company currently expects to pay the cash purchase price with proceeds from the private placement described below.

RNGR Energy Services received a debt commitment letter from Eclipse Business Capital and Eclipse Business Capital SPV with regard to a new $77.5 million credit facility consisting of a $50 million revolving credit facility, a $12.5 million M&E term loan facility and a $15 million term loan B facility.

The closing of the credit facility is subject to various conditions including entry into definitive documents and, with respect to the term loan B facility, the simultaneous close of the basic asset acquisition. Ranger currently expects to use a portion of the proceeds received from the revolving credit facility to pay off existing indebtedness. The credit facility is available at the company’s option and would be pledged against certain asset sales.

The company entered into a definitive agreement on Sept. 10, 2021, with several purchasers to issue an aggregate amount of $42 million of shares of its newly issued series a convertible preferred stock.

The closing of the private placement is subject to various conditions, including the simultaneous close of the Basic asset acquisition. The company is expected to contribute a portion of the proceeds received from the private placement to the buyer to fund the Basic asset acquisition.

The purchase includes Basic’s business lines outside the State of California (excluding the water logistic business), specifically all assets within the well servicing service line, all assets within the fishing and rental tool service lines, all assets within the coiled tubing service line, all rolling stock assets required to support the operating assets being purchased and real property locations inclusive of, but not limited to, real property owned in New Mexico, Oklahoma and Texas.

“We are very pleased to continue the expansion of our scale and scope with this latest acquisition,” Stuart Bodden, president and CEO of Ranger, said. “Combined with the Patriot and PerfX transactions earlier this year, the Basic assets strengthen our ability serve clients in our markets and to drive ongoing growth in both revenue and free cash flow.”

The closing of the transaction is subject to various conditions, including approval by the bankruptcy court. A hearing to seek court approval is scheduled for Sept. 23, 2021, and the transaction is expected to be concluded by the end of September 2021. The company expects to hold an investor call and provide additional information regarding the transactions described herein in connection with the closing.

Piper Sandler is serving as exclusive financial advisor to the company with respect to the Basic asset acquisition and sole placement agent with respect to the debt financing and private placement of preferred stock. Winston & Strawn is serving as legal counsel to the company.