HOUSTON, March 8, 2023
KLX Energy Services Holdings, Inc. (NASDAQ: KLXE), (“KLX” or the “Company”) announced today it has acquired all of the equity interests of Greene’s Energy Group, LLC (“Greene’s”), including $1.7 million in cash remaining with Greene’s, in an all-stock transaction. The total consideration for the acquisition consisted of the issuance of approximately 2.4 million shares of KLX common stock, par value $0.01 per share, subject to customary post-closing adjustments, with an implied enterprise value of approximately $30.3 million based on a 30-day volume weighted average price (“VWAP”) as of March 7, 2023 and less acquired cash. Following the closing of the transaction, former shareholders of Greene’s hold approximately 14.7% of the fully diluted common stock of the Company.
Greene’s is a leading provider of wellhead protection, flowback and well testing services. The acquisition of Greene’s, which is expected to be accretive to KLX in 2023, augments the KLX frac rental and flowback offering, providing KLX with a broader presence in the Permian and Eagle Ford basins.
Commenting on the acquisition, Chris Baker, KLX President and Chief Executive Officer, stated, “We are pleased to welcome Greene’s exceptional management team and talented employees to KLX. Greene’s has an excellent industry reputation and fits naturally within KLX’s Southwest segment supporting both Permian and Eagle Ford operators. Greene’s has a strong unlevered balance sheet, reporting unaudited $68.0 million in revenue, $5.3 million in net income and $14.7 million in Adjusted EBITDA in 2022. Going forward, we expect the legacy Greene’s platform to generate 2023 revenue and Adjusted EBITDA of $70.0 million to $75.0 million and $18.0 million to $20.0 million (inclusive of synergies), respectively.
“Additionally, this transaction is deleveraging for KLX and is expected to be accretive to KLX on all financial metrics,” added Baker. “We expect $2.0 million to $3.0 million in annualized cost synergies within twelve months and believe this further enhances KLX’s ability to effect industry consolidation as we continue to focus on increasing returns and enhancing shareholder value.”
Adam Doyle, President of Greene’s, said, “We believe KLX and Greene’s will form a strong partnership based on a common culture focused on safety, execution, customer service and returns. We believe the combined company is better positioned to serve the Greene’s customer base and support the team members with the addition of KLX’s best in-class diversified offerings.”
KLX’s legal advisor was Vinson & Elkins LLP. Greene’s legal advisor was Sidley Austin LLP. Simmons Energy, a Division of Piper Sandler, acted as Greene’s financial advisors for the transaction.