TriWest Capital-backed Source Energy prices IPO to raise $300 mln

Source Energy Services, a proppant-sourcing and oilfield-logistics company, is seeking to raise $300 million from its recently filed initial public offering, according to the company’s updated prospectus.

Source, backed by Canadian private equity firm TriWest Capital Partners, said it will price as many as 17.6 million common shares at $17 to $20 per unit. If the IPO’s greenshoe option is exercised, it could raise as much as $345 million.

The public sale implies a valuation of the Calgary fracturing-sand producer of more than $900 million, Bloomberg reported.

The lion’s share of the offering’s proceeds will go to Source. They will be used to pay for the company’s acquisition of a new facility near Blair, Wisconsin, reduce debt, and support other capital expenditures.

The IPO will include a secondary sale by TriWest, which invested in Source in 2013, and other shareholders. Upon its completion, TriWest will remain a minority investor, the updated prospectus shows.

Source will list on the Toronto Stock Exchange under the symbol SHLE. The lead underwriters are Scotia Capital, Morgan Stanley Canada and BMO Nesbitt Burns.

Source is the third Canadian private equity-backed company to price an IPO this week. Another Calgary oilfield service provider, STEP Energy Services, backed by ARC Financial Corp, said it is looking to raise up to $230 million from its public sale.

Additionally, Toronto outerwear apparel brand Canada Goose, owned by Bain Capital, unveiled plans to raise as much as $320 million.

In all, four Canadian PE-backed companies have either announced or completed IPOs since January.The fourth is Freshii, a health-food restaurant chain backed by Klass Capital.

TriWest raised $500 million for its fifth mid-market fund in 2015. Since then, TriWest Capital Partners Fund V has made five platform investments, including Trimlite, a maker of doors and other building materials, acquired in late 2016.

Photo courtesy of Reuters/Todd Korol