Sports Technology blank check company goes public

Sportsmap Tech Acquisition, a blank check company, has completed its $100 million Initial Public Offering (IPO). The company is based in the Galleria area of Houston.



The business aims to make an acquisition in sports technology such as wearables, data analytics, new methods of fan engagement, and new esports and gambling platforms.

The CEO of the company is David Gow. In 2007, Mr. Gow formed Gow Media, a multi-platform media company that included ESPN Radio Houston and digital content sites such as CultureMap. He was also the CFO and later CEO of Houston-based Ashford.com which went public in 1999. At one point, the company was the largest luxury retailer online. Prior to that, Mr. Gow was the Director of Corporate Strategy at Compaq.

A couple of names well known to Houston sports fans are also Directors;

  • Reid Ryan, former President of the Houston Astros. He is the son of Nolan Ryan.
  • Oliver Luck, former General Manager of the Houston Dynamo and former CEO of the Houston Sports Authority.  He is the father of Andrew Luck, the number one draft pick in 2012.

Jacob Swain serves as the CFO. Between March and November 2019, he was the CFO and Chief Technology Officer at Bellatorum Resources, a mineral rights investment firm that later shut down due to fraud. Prior to that, he worked at BBB Tank Services between 2009 and 2016, first as CFO, later as CEO.

S-1 filing – Sportsmap Tech Acquisition

https://www.businesswire.com/news/home/20211018006029/en/SportsMap-Tech-Acquisition-Corp.-Announces-Pricing-of-100000000-Initial-Public-Offering

LyondellBasel to spend $50 million to settle pollution allegations

LyondellBasel has agreed to spend $50 million to reduce air pollution at six petrochemical plants, including four in the Houston area.



This is part of a settlement with the Department of Justice and the Environmental Protection Agency (EPA) to resolve allegations that the company failed to operate and maintain flaring. The company also agreed to pay a civil penalty of $3.4 million.

Two of the plants are in Channelview (North and South Facilities) and two are in La Porte (Acetyls and Equistar facilities). The others are in Corpus Christi and Clinton, Iowa.

Flare Stack controls absent

Companies are allowed to vent gases in a flare stack as a control device in a petrochemical plant. Combustion of the gases must occur in the flare stack. For that reason, the flares must have monitoring equipment. Many flares use steam to assist in combustion by promoting turbulence in a flare’s flame. The steam-to-vent gas ratio must be calculated. Too much steam snuffs out the flame, and too little causing excessive smoke. In either case, air pollutants escape.

The EPA alleged that, since 2009, the company

  • made modifications to the stacks without getting the necessary permits
  • failed to install or properly operate flow monitors
  • failed to have sufficient controls to maintain the steam-to-vent gas ratios within specifications
  • operated the flares with excessively high steam content

The EPA singled out the Channelview facilities as subjecting the surrounding area to especially high particulate matter, ozone, toxic cancer risk and respiratory hazard.

One year to install controls

The company has agreed to install the monitoring and control systems within one year. This includes a fenceline monitoring system at each of the plants.

It has also agreed to minimize the amount of waste gas that it sends to the flares. It must submit its initial waste gas minimization plan to the EPA within one year. This includes a root cause analysis of what’s causing the waste gas. An updated plan, taking into account reductions identified as part of the root cause analysis is due within two years.

2007 consent decree

Back in 2007, the company settled other pollution allegations with the DOJ. That settlement covered seven plants in total, including four on the list today. The company paid a penalty of $2.5 million and spent $125 million to reduce air, water and hazardous waste violations.

The settlement comes two weeks after the company pledged net zero emissions by 2050.

In 2020, the company made an operating profit of $2 billion (before impairments). Between 2016-2019, the company had an operating profit of between $4 billion and $5.5 billion each year.

https://www.justice.gov/opa/pr/lyondellbasell-companies-agree-reduce-harmful-air-pollution-six-us-chemical-plants

 

Sugar Land refiner appoints new CFO

Dane Neumann has been promoted to CFO at Sugar Land-based CVR Energy. He was the VP of Finance and Treasury until he was appointed interim CFO in August following the departure of Tracy Jackson.

CVR operates two refineries in Kansas and Oklahoma as well as related pipelines and infrastructure. The company has a market capitalization of $1.9 billion, up $600 million since  Ms. Jackson resigned. That’s because, in September, the Environmental Protection Agency (EPA) proposed big cuts to US biofuel blending requirements. This benefits oil refiners at the expense of farmers. Analysts speculate that CVR will re-instate regular dividends once the change is finalized.

Mr. Neumann joined CVR in June 2018 and also worked for Andeavor and its affiliates from March 2011 until June 2018. He will receive a base salary of $400,000.

The predecessor to Ms. Jackson was Susan Ball. She resigned last week from her position as the CFO of Team Inc.

SEC filing – CVR Energy – new CFO

CFO resigns at marine construction company

Luca Paciolo – circa 1500 – “The Father of Accounting”

Robert Tabb, the CFO at Orion Group Holdings, has resigned to take a position with an unnamed private company. The company is conducting a formal CFO search. In the interim, senior management and the finance department will share his duties.



Orion is a specialty construction company involved in marine construction management including dredging and turnkey concrete construction services. The company is based in SE Houston near Ellington Field and has a market capitalization of $157 million.

Mr. Tabb joined the company in 2014 and became the interim CFO in November 2018. The company removed the interim tag the following March.

At the time he was appointed, the company was in a big hole. In 2018, the company wrote off $69 million in goodwill impairment and a further $23 million in cost overruns on two marine projects. The company had $80 million of debt.

Fast forward to the present time and the company debt was down to $6 million at the end of June. This is the result of increased revenues, especially from Gulf Coast port projects, improved discipline on contract bidding and sale of surplus assets. The company completed a sale-and-leaseback transaction in 2019 that raised $18 million.

Last week, Scott Kornblau was appointed the CFO at Great Lakes Dredge & Dock, another Houston company in a similar business to Orion.

https://www.oriongroupholdingsinc.com/orion-holdings-press-news/

 

 

 

CFO resigns at Houston biotech company

Tony Tontat has resigned as the CFO of Kiromic BioPharma. Dan Clark, VP of Finance, has been appointed interim CFO.



Kiromic is a gene-editing company that is focused on solid cancers. It was formed in 2006 but doesn’t have any revenues yet. The company is based in the Texas Medical Center.

It went public via an Initial Public Offering in October 2020. The IPO raised $15 million at $12 per share.

The company raised a further $40 million at $5 per share in July. The company planned to use the second raise for clinical trials for two drugs that were expected to be approved by the FDA (Food and Drug Administration). Instead, the FDA responded two weeks later with further questions on the initial applications, causing a delay in the trials.  The share price plunged and is now $1.94.

Mr. Tontat, who is based in Florida, had served as the CFO since October 2019 and also served as the Chief Operating Officer from August 2019 to April 2021. He was paid $300,000.

Mr. Clark joined the company in February 2020 as its Corporate Controller. Prior to that, he worked for consulting firms The Siegfried Group and FTI Consulting. He started his career at KPMG.

SEC filing – Tontat resignation

 

CFO resigns at Sugar Land industrial company

Luca Paciolo – circa 1500 – “The Father of Accounting”

Susan Ball has resigned as CFO of Sugar Land-based Team Inc, effective November 12, 2021. The company has retained an executive search firm to find a replacement. It is expected that Ms. Ball will enter into a consulting agreement to assist in the transition.



Team provides testing, inspection and repair services to industries such as refining and power. It has a market capitalization of $100 million.

A poisoned chalice

Ms. Ball was appointed CFO in December 2018. Prior to that, she was CFO at CVR Energy, another company based in Sugar Land, though Ms. Ball got a relocation package when she joined Team (presumably from Kansas City where CVR used to be based). When she was appointed, the market capitalization of Team was $500 million. I noted in my blog post at the time that she had her hands full, namely;

  • The company had made two big acquisitions in 2015-2016 for $538 million that turned out to be a disaster (especially Houston-based Furmanite). $325 million of this was paid in cash.
  • The company botched an ERP implementation. Spent $47 million on Microsoft Dynamics AX before going live in March 2017!
  • Hired Alvarez & Marsal in late 2017 to assist in identifying cost saving opportunities.

Some of these issues still plague the company. In 2020, the company wrote off another $192 million in goodwill impairment from those big acquisitions. That’s on top of the $75 million taken in 2017.

Alvarez & Marsal are still engaged by the company, though their role is winding down. To date, the company has spent about $30 million in professional fees associated with their ‘ONETEAM’ program. I presume most of this went to A&M.

The company has had internal control issues as well. In 2019, it disclosed that an employee in the Netherlands (a Furmanite subsidiary) had overridden controls that resulted in misappropriation of assets over a number of years.

Debt refinanced

Team currently has shareholders’ equity of $167 million, though its balance sheet still has goodwill and intangible assets valued at $187 million.

Long-term debt amounts to $351 million. Under Ms. Ball’s watch, the business was refinanced in late 2020. The first tranche ($93 million) is not due to be repaid until 2023. $250 million is due in 2026. That’s given the company some breathing room as it tries to sort out its business.

SEC filing – Team CFO resignation

 

 

Expro completes merger with Frank’s International

Frank’s International and Expro have completed their all-stock merger. The deal was originally announced in March. The business has a combined enterprise value of $3 billion.



Expro is a leading provider of well flow optimization solutions, while Frank’s is a leader in tubular running and other services related to well construction. The combined business had revenues of about $1.1 billion in 2020.

Although, it was billed as a merger, effectively it is Expro who have taken over. The publicly-traded entity is now called ‘Expro Group Holdings’. Frank’s is being kept as a brand name.

Expro shareholders ended up owning 65% of the combined business. Expro CEO Mike Jardon and CFO Quinn Fanning (ex CFO of Tidewater) took over the same roles in the combined business.

In October 2019, the Board of Directors at Frank’s decided that they needed to merge with a large scale partner in order to diversify and achieve scale. In May 2020, they first approached Expro, another unnamed privately-held oilfield services company, and two publicly-traded oilfield services companies.

Frank’s Executive Management

Frank’s CEO Michael Kearney has been appointed Chairman of the Board. Melissa Cougle has stepped down as CFO, though she remains with the company as an employee.

CEO Kearney won’t receive any severance but his restricted stock awards will vest fully ($8.6 million). Ms Cougle will be eligible for a cash severance of $1.6million (2 time base plus target bonus). Her restricted stock will also vest ($1.6 million).

Deal negotiations

The deal with Expro took a long time to reach agreement because of the complicated nature in which Frank’s went public in 2013. As part of that IPO, Mosing Holdings, on behalf of the family that controlled Frank’s at the time, entered into a Tax Receivable Agreement (TRA) whereby most of the future benefits from changes in taxable basis would go to Mosing Holdings and not the company.

Initially, as calculated in the TRA, Mosing Holdings would have received a cash payment of $68 million as a result of the deal. That was a major sticking point with Expro. They ended up settling the TRA for $15 million.

SEC filing – Expro Franks merger completion

 

Kirby Corporation appoints new CFO

Last week, Raj Kumar announced his resignation as CFO of Dril-Quip. Today, it was announced that he will become the CFO at Houston-based Kirby Corporation.



Not only does Kirby have a bigger market capitalization ($2.9 billion versus $925 million for Dril-Quip), it has $1.5 billion of debt, whereas Dril-Quip has a large net cash position. That should appeal to Mr. Kumar, who has a treasury background.

Kirby operates domestic barges and other marine transportation services. It traditionally also had a small business that providing service and parts for engines, transmissions and gears.

In September 2017, it massively expanded the service business by paying $758 million to buy Stewart & Stephenson. That turned out to be a disaster. Last year it wrote off $553 million in goodwill and intangible assets. Though Kirby managed to bungle the writedown!

Current CFO Bill Harvey, who joined the company in May 2018, announced back in July that he will be retiring in early 2022.

Mr. Kumar will receive a base salary of $500,000. He also receive a one-time restricted stock grant worth $1 million that will vest over two years.

SEC filing – Kirby CFO Kumar

Former Diamond Offshore CFO lands new role

Scott Kornblau, who recently left his CFO role at Diamond Offshore, has been appointed CFO at Great Lakes Dredge & Dock Corporation (GLDD), which has its head office in the Memorial City area of Houston.



GLDD is the nation’s largest provider of dredging services. The company was founded in 1890. It changed its name in 1905 and performed marine construction and landfill projects along the Chicago lakefront and in the surrounding Great Lakes region. In recent years, it has been expanding into the East and Gulf Coasts of the US.

GLDD has revenues of $700 million and a market capitalization of $1 billion.

Lasse Petterson was appointed the new CEO in May 2017. He joined the company from Houston-based CB&I (now part of McDermott) where he was COO. Prior to that, he worked in Houston at AMEC Inc, Americas and Aker Maritime. GLDD moved its head office to Houston one year ago.

Current CFO Mark Marinko, who has been in that position since 2014, will remain in the Chicago area. He will receive a severance of 1.5 times base salary of $401,000 plus 1.5 times annual incentive. In addition his restricted stock will vest. In total, Mr. Marinko will receive a severance package worth $2.5 million.

Mr. Kornblau will receive a base salary of $435,000. He will also a one-time restricted stock award of 15,000 units (currently worth about $225,000) that will vest over three years.

SEC filing – GLDD CFO appointment

 

E&P companies merge to form Coterra Energy

Coterra Logo

Cabot Oil & Gas, based in Houston, and Cimarex Energy, based in Denver, have completed their $17 billion merger. The combined company has been renamed Coterra Energy and has its head office in Houston.



The deal was originally announced back in May. Cimarex shareholders ended up with 50.5% of the combined stock. When the deal was announced, Wall Street wasn’t impressed as Cabot mainly operates in the Marcellus Basin (primarily gas) while Cimarex is mainly in the Permian Basin. They wanted Cimarex to merge with another Permian Basin operator. The deal with Cabot limited the scope for synergies.

Natural gas prices have almost doubled since the deal was announced, so the deal looks better from Cimarex’s perspective now.

In terms of the new management, Cabot CEO Dan Dinges becomes Executive Chairman, Cimarex CEO Thomas Jorden becomes the CEO, while Cabot CFO Scott Schroeder is appointed CFO.

Severance

Cimarex CFO Mark Burford is not an Executive officer of the combined group. I am not sure if he has left the company, as there is no official confirmation of that from the company. If he has, he will be entitled to a cash severance of $2.2 million (2x average annual compensation for the past two years, plus a pro-rata bonus for 2021). Even if he has not been terminated, his equity will vest, worth $9.7 million.

Mr. Dingles will be Executive Chairman until no later than December 2022. When he steps down, he will receive a $10 million severance payment.

Background to the merger

Cabot started looking at the possibility of combining with another E&P company in late 2019. At one point, in mid-2020 Cabot was looking at a three-party business combination. That deal fell through because one of the parties demanded a premium. Around the same time, Cimarex started preliminary discussions with other Permian Basin parties about potential mergers.

In the last few months of 2020, a representative of Tudor Pickering Holt had several separate conversations with Mr. Jorden and Mr. Schroeder. In January 2021, the representative suggested that two companies had enough common ground to start direct conversations.

The combined company had $1 billion of proforma revenues for the first quarter. its debt is 0.7 times EBITDAX (earnings before interest, tax, depreciation, amortization and exploration expenses).

SEC filing – Coterra Energy