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Consortium Buys Majority Stake in Frac Tech Services

A group of investors including Maju Investments and RRJ Capital has agreed to buy about 70% of Cisco, Texas-based Frac Tech Services Inc., Reuters reported. Financial terms of the deal were not released. Chesapeake Energy Corp. currently owns about 26 percent of Frac Tech. After the deal, Chesapeak will own about 30%.

(Reuters) – Frac Tech Services Inc said a consortium of investors have agreed to buy the majority shareholder of the company, amidst the oilfield services provider’s plans to list its shares.

The company, which had said in December that it will raise up to $690 million in an initial public offering, said the investors will buy Frac Tech Holdings, LLC, which owns about 70 percent of the Cisco, Texas-based company.

The investors include Maju Investments (Mauritius) Pte Ltd, a wholly-owned investment holding company of Temasek Holdings (Private) Limited (Temasek), and RRJ Capital.

Chesapeake Energy Corp currently owns about 26 percent of Frac Tech.

After the deal, Chesapeake’s ownership will increase to 30 percent, the company said.

Frac Tech said the investors have received $1.7 billion debt financing commitment from their financial advisors.

The company, whose customers include Petrohawk Energy Corporation , XTO Energy Inc, Chesapeake and Range Resources Corp , said it expects the transaction to close in the second quarter.

Bank of America Merrill Lynch and Citigroup are serving as the financial advisors to Chesapeake, Temasek and RRJ Capital, the company added.

(Reporting by Vaishnavi Bala in Bangalore and Saeed Azhar in Singapore)