Houston oilfield equipment manufacturer announces terms for IPO

AFG Holdings Inc, the parent company of Ameriforge, has announced terms for its Initial Public Offering (IPO). AFG has its headquarters in the Memorial City area of West Houston.

The company plans to raise $300 million by offering 18.2 million shares at a price range of $15 to $18. At the midpoint of the range, the company would have a market value of $1.3 billion.

The IPO is expected to price during the week of July 16, 2018. [UPDATE: The company pulled its IPO on July 18. No reason was given]

Most of the proceeds would go to the selling shareholders and not the company. At the midpoint, the company expects to receive $82 million (net of expenses), of which $73 million would be used to pay down a term loan that has a 10.7% interest rate.

Ameriforge manufactures highly-engineered equipment for the oil and gas market and industrial markets such as pressure pumping equipment, offshore drilling systems and connectors.

The company was formed in 1996 and in 2012 was acquired by First Reserve, a private equity firm. The company expanded rapidly, growing to 25 locations (including many internationally) but became over-stretched after the energy services downtown. In April 2017 the company entered into pre-packaged bankruptcy proceedings that converted $739 million of senior debt into equity in the new company.  As a result the company received new equity sponsors led by The Carlyle Group.

For the first quarter of 2018, the company had revenues of $171 million and adjusted EBITDA of $26 million (15.3%)


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