ARC Financial-backed STEP Energy seeks $200 mln from IPO

STEP Energy Services, a Calgary oilfield service company, has priced its recently filed initial public offering.

STEP, backed by Canadian energy private equity firm ARC Financial Corp, said in an updated prospectus it planned to sell common shares at $14 to $16 per unit, generating about $200 million in proceeds. That amount may increase to $230 million if a greenshoe option is exercised.

More than half the offering’s proceeds will go to selling shareholders, including ARC, which holds a controlling stake in the company.

STEP said it would use its share of the proceeds to reduce debt and fund an ongoing capital-expenditure program.

The IPO is co-led by CIBC World Markets and Raymond James.

STEP, a provider of coiled tubing and fracturing solutions, was founded in 2011 with a $75 million investment from ARC. Last year, the company bought the assets of Sanjel Corp, which was then under court protection from creditors.

STEP is one of two PE-backed Canadian energy-service companies currently pursuing a public sale. The other, Source Energy Services, a Calgary proppant-sourcing and oilfield-logistics company, filed earlier this month. Source is backed by TriWest Capital Partners.

Last year, ARC intensified its deal-making activity in Canada. In September, it invested in the launch of Sanjel Energy Services, a supplier of cementing and acidizing solutions formed out of assets acquired from Sanjel Corp.

Earlier in 2016, ARC invested $150 million in Longshore Resources, a junior oil producer, and an undisclosed amount in Wayfinder, a hydraulic-fracturing-treatments specialist.

Photo courtesy of STEP Energy Services Ltd