Key Energy Services, an oilfield services company based in downtown Houston, has offered to merge with Fort Worth-based rival, Basic Energy Services. The deal would be an all-stock transaction with Key shareholders owning 51% of the combined company.
The combined company would have estimated 2019 revenues of $1.8 billion and EBITDA of $275 million. This is after estimated synergies of $65 million annualized.
The offer values Basic Energy at $9.80 per share. Its shares closed at $9.43 before details of the offer became public.
Key has sent two letters to Basic, one on September 20 and another on September 23. In between those two letters, Basic announced a $300 million senior secured loan notes offering. In the second letter, Key urged Basic to delay or cancel the offering.
The first letter notes that the two companies have had extensive dialogue. Basic has stated it will formally respond within the next 24 to 48 hours.
UPDATE 09-25 Basic has rejected the proposal, stating it prefers to remain independent. Its share price is currently $10.50, so the market thinks it is in play.
Key has a new CEO, Rob Saltiel, who was just appointed on August 20, 2018. He was previously the CEO of Atwood Oceanics until its sale to Ensco a year ago.
Last month Basic appointed David Schorlemer as its new CFO, who moved from another Houston public company, Gulf Island Fabrication.