TETRA grows water business with SwiftWater buy
TETRA has expanded operations in the Permian Basin, Texas, US, by acquiring SwiftWater Energy Services, a provider of water management and solutions to oil and gas (fracking) operators.
TETRA will pay $40 million in cash, and 7.8 million common stock shares at $0.01 per share; and the sellers have rights to earnout payments of up to $15 million. “This earnout structure reflects the consolidation of the combined businesses of TETRA and SwiftWater in the Permian Basin, and will help drive synergies and cross-selling opportunities,” the company said.
The deal grows TETRA’s share of the Permian Basin market with “significant capacity,” and brings new products and services to its roster, it added.
“We see excellent synergies with nominal customer overlap between our, and SwiftWater’s, operations in the Permian Basin, and both companies continue to see strong demand for water management solutions,” said TETRA chief executive Stuart Brightman.
“The agreement to acquire SwiftWater Energy Services shows further implementation of our strategic plans, growing our water management businesses. Our focus will continue to be identifying additional growth opportunities in our current business lines,” Brightman added.
SwiftWater’s adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be between $16 million and $20 million for the 12 months up until the takeover.
TETRA anticipates that the deal will immediately add to earnings per share, cash flow per share, and free cash flow, during 2018.