Enterprise Group signs LOI to acquire oilfield site rental firm
Aug. 5, 2014 - Enterprise Group, Inc. has announced that the company has signed a letter of intent to acquire a privately-owned oilfield site services rental company based in Fort St. John, British Columbia. The purchase price will be based on the company's most recent financial statements which are in the process of being audited. The acquisition will be funded by a combination of Enterprise shares, cash, and vendor take-back financing.
Over the past ten years, the Acquisition Target has developed a
highly-regarded full-service oilfield site infrastructure company that
fulfills multiple equipment rental needs for a variety of oil and gas
customers. The company's equipment fleet currently consists of
approximately 350 owned pieces. This acquisition expedites Enterprise's
plans to be operating three of its subsidiaries in Fort St. John by the
fourth quarter of 2014. The owner of the Acquisition Target has agreed
to sign a five-year management agreement with the Company.
Enterprise expects to complete the transaction in the month of September
2014. This completion will be subject to negotiation of a definitive
share purchase agreement, the Company's finalization of satisfactory due
diligence, and customary closing conditions.
"This acquisition will further accelerate Enterprise's emergence as a
key player within the oilfield service industry," stated Leonard
Jaroszuk, the Company's President and Chief Executive Officer. "The
Acquisition Target is in many ways similar to Hart Oilfield Services,
which we acquired in January of this year. The two companies offer
similar services, and we anticipate that synergies between the two
businesses will result in the creation of multiple cost-saving
efficiencies. Furthermore, the Acquisition Target has relationships with
several customers that Hart does not service."
"We strongly believe that the equipment rental market offers significant
potential," concluded Mr. Jaroszuk. "Much of this potential centers
around the Fort St. John region, a critical area in the development of
Western Canada's LNG industry. Our acquisition of Hart has already
demonstrated its value, both in the company's contribution to
Enterprise's first quarter results and its recently announced major
contract with Canada's largest natural gas producer. We are confident
that this Acquisition Target offers similar potential, and will create
immediate and accretive benefits for our business."
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