Forum Energy Technologies, Inc. (NYSE:FET) entered into a definitive agreement to acquire Variperm (Canada) Limited from SCF Partners, Inc. for approximately $190 million on November 1, 2023. Under the consideration terms, Forum Energy will pay $150 million in cash and 2 million shares of FET?s common stock, reflecting a valuation of approximately 3.7x Variperm?s trailing twelve months EBITDA as of September 30, 2023. The cash consideration for the transaction will be funded from $90 million of cash on hand and borrowings under our ABL credit facility, and a $60 million seller term loan. The seller term loan, if utilized, would mature in three years and provide for an initial interest rate of 11% that is subject to escalation after the first anniversary of the loan. The seller term loan is payable at any time without penalty. Prior to closing the Variperm acquisition, FET will explore an alternative financing arrangement to the seller term loan. Approximately 290 employees of Veriperm across eight locations in North America will continue as part of the FET family. The transaction is subject to Canadian regulatory approval and is expected to close in January 2024. As of December 21, 2023, Forum Energy Technologies, Inc. has received approval from the Canadian Competition Bureau to proceed with its planned acquisition of Variperm Energy Services. The acquisition is expected to be immediately accretive to FET?s margins and cash flow. At closing, FET?s net leverage ratio is expected to be 1.9x with liquidity of $142 million.
Goldman Sachs & Co. LLC acted as financial advisor and Gibson, Dunn & Crutcher LLP and Goodmans LLP acted as legal counsel to FET. Tudor, Pickering, Holt & Co. Securities Canada, ULC acted as financial advisor and Mike Marek, Jackson O'Maley, Matt Strock, Zach Rider, Lina Dimachkieh, Sarah Mitchell, Shane Tucker, Alex Bluebond, Rajesh Patel, Matt Dobbins, Kelly Rondinelli, Brian Howard, Elizabeth Krabill McIntyre and Hill Wellford of Vinson & Elkins LLP and Bennett Jones LLP acted as legal counsels to Variperm.

Forum Energy Technologies, Inc. (NYSE:FET) completed the acquisition of Variperm (Canada) Limited from SCF Partners, Inc. on January 5, 2024. 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. We expect the combined global footprint of FET and Variperm to benefit both legacy FET and Variperm products