STEP Energy Services Ltd, a Calgary coiled tubing and fracturing solutions provider, has launched a secondary offering of common shares on behalf of ARC Financial Corp, a Canadian energy private equity firm. The offering will sell about 5.3 million shares at $12.25 per unit, generating more than $65 million in gross proceeds. The offering’s greenshoe option, if fully exercised, will increase the proceeds to about $75 million. ARC, which invested in STEP in 2011, will as a result see its interest reduced to about 67.9 percent of issued and outstanding shares, not including the greenshoe option. STEP went public earlier this year, raising $100 million.
STEP Energy Services Ltd. Announces $65 Million Secondary Offering of Common Shares
CALGARY, ALBERTA–(Marketwired – Nov. 13, 2017) –
STEP Energy Services Ltd. (the “Company” or “STEP”) announced today that the limited partnerships comprising ARC Energy Fund 6 and ARC Energy Fund 8 (collectively, the “Selling Shareholders”) have entered into an agreement with a syndicate of underwriters led by CIBC Capital Markets as sole bookrunner and Peters & Co. as co-lead underwriter (the “Underwriters”), pursuant to which the Underwriters have agreed to purchase on a bought deal basis an aggregate of 5,307,000 common shares held by the Selling Shareholders at an offering price of $12.25 per share (the “Offering Price”) for total gross proceeds to the Selling Shareholders of $65,010,750 (the “Offering”). STEP will not receive any proceeds from the Offering.
The Selling Shareholders have granted to the Underwriters an over-allotment option (the “Over- Allotment Option”), exercisable in whole or in part, at any time for a period of 30 days following the closing of the Offering, to purchase up to an aggregate of an additional 796,050 common shares of the Company from the Selling Shareholders at the Offering Price. The Company will not receive any proceeds in connection with the exercise of the Over-Allotment Option.
The Offering is expected to close on or about December 1, 2017, subject to customary closing conditions.
Upon completion of the Offering and assuming no exercise of the Over-Allotment Option, the Selling Shareholders will, directly or indirectly, own or control in aggregate approximately 67.9% of the issued and outstanding common shares.
A preliminary short form prospectus relating to the Offering will be filed by no later than November 17, 2017 with the securities commissions of each of the provinces of Canada.
No securities regulatory authority has either approved or disapproved of the contents of this press release. This press release is not for distribution, directly or indirectly, in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia) or any other jurisdiction outside Canada. This press release does not constitute or form a part of any offer or solicitation to buy or sell any securities in the United States or any other jurisdiction outside of Canada. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or the securities laws of any state of the United States and may not be offered or sold within the United States or to or for the benefit of a U.S. person absent registration or pursuant to an available exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. There will be no public offering of securities in the United States.
STEP Energy Services is an oilfield service company founded in 2011 that provides fully integrated coiled tubing and fracturing solutions. The Company’s combination of modern, fit-for-purpose fracturing and coiled tubing equipment has differentiated STEP in plays where wells are deeper, have longer laterals, and higher pressure.
Initially operating only in Canada as a specialized, deep capacity coiled tubing company, in 2015 STEP expanded into the U.S. and also began offering fracturing services to our Canadian clients. Currently, STEP is a fully integrated, deep capacity coiled tubing and fracturing solutions provider focused primarily in the Montney and Duvernay in Canada, and as coiled tubing services provider in the U.S. with operations in the Permian and Eagle Ford in Texas and the Haynesville in Louisiana. The Company’s U.S. business is a key differentiator for STEP, as the rate of expansion and profitability from that segment is expected to contribute meaningfully to the Company’s growth. The Company’s continuing track record of safety, efficiency and execution drives repeat business from blue-chip exploration and production clients.
STEP Energy Services Ltd.
President & Chief Executive Officer
Photo courtesy of STEP Energy Services Ltd