"This acquisition is a sizeable opportunity to accelerate growth for Forbes," said John Crisp, President and Chief Executive Officer of Forbes. "The Cretic team has built a company that is best in class, and dovetails directly with our current offering of completion and production-related services. We share a common goal in continuing to build out an operation based on safe, reliable, consistent and efficient execution."
Cretic was co-founded by Joe Michetti, its President and Chief Executive Officer. Prior to founding Cretic, Michetti co-founded Infinistar Energy Services, which he sold to Weatherford International in 2009, maintaining a managerial position within Weatherford's Global Coiled Tubing product line. He also has held various managerial and engineering positions for El Paso Production, Burlington Resources and Pan Canadian Petroleum.
Michetti will become President and Co-Chief Operating Officer of Forbes, and brings with him an experienced and professional team of managers, technical support staff, and operators, each of whom will continue in their current roles under Cretic.
"Our operation at Cretic has proven to the market that we can deliver results faster, safer, and more efficiently than before," said Michetti. "We are eager to become a part of Forbes, which will expand our infrastructure, enable us to reach more markets with our quality approach, and diversify our product offerings to include well servicing and fluid logistics services."
"We are pleased to have partnered with and supported the Cretic team in introducing large-diameter, extended reach coiled tubing to the market," said Gregory Laake, Managing Partner of Catapult Energy Services Group. "Joe and his team have established Cretic as a specialised, innovative completions business with a solid blue-chip customer base. We wish them continued success under Forbes."
In order to fund the Cretic acquisition, Forbes (i) entered into a new US$35 million ABL facility with Regions Bank and (ii) amended and upsized its existing first lien term loan to receive an additional US$60 million of term loan proceeds. Following the Cretic acquisition, the short-term portion of Forbes' term loan, in the amount of US$50 million, is expected to be repaid with proceeds from a planned offering of rights to purchase unsecured subordinated convertible debt securities to its existing shareholders on a pro rata basis. Forbes' two largest shareholders have committed to purchase the debt securities underlying any rights that are not exercised by other shareholders. In the event Forbes does not consummate the planned rights offering within twelve months following the Cretic transaction, the short-term portion of the term loan will automatically convert to unsecured subordinated convertible debt securities.
Forbes was advised by Fried, Frank, Harris, Shriver & Jacobson LLP, and Houlihan Lokey Capital, Inc., in connection with the acquisition. Catapult was advised by Simmons Energy | A Division of Piper Jaffray.
Read the article online at: https://www.oilfieldtechnology.com/special-reports/19112018/forbes-energy-services-acquires-cretic-energy-services/