Houston oilfield service companies agree to merge in $1.8 billion deal

Keane Energy Group and C&J Services have agreed to merge in an all-stock merger that has a pro-forma Enterprise value of $1.8 billion.

Keane is a pure-play hydraulic fracturing company while C&J is primarily involved in completion and production services. The combined group will be the fourth largest oilfield services company after Halliburton, Schlumberger and Baker Hughes with proforma revenues of $4.2 billion.

Prior to the deal being announced, Keane had a share price of $6.99 (market cap $732 million). C&J had a share price of $10.72 (market cap $708 million).

Keane was bought by Cerberus, a PE firm, who took the business public in January 2017 in an Initial Public Offering at a share price of $19. Cerberus still owns 49% of the pre-merger Keane. At the same time as Keane completed its IPO, C&J emerged from Chapter 11 bankruptcy after converting $1.4 billion of debt to equity.

Management team

Proforma ownership will be 50% Keane and 50% C&J. The management team will be led by;

  • Patrick Murray (C&J) will be Chairman of the Board
  • Robert Drummond (Keane) will be CEO
  • JK van Gaalen (C&J) will be CFO
  • Greg Powell (Keane) will be Chief Integration Officer.

The combined head office will be run out of C&J’s office in Westchase area, rather than Keane’s office in the Galleria area. It will have a new name and ticker symbol.


The combined company expects to generate $100 million of annualized synergies – approx $45 million from SG&A, $45 million from Supply chain (proppants etc) and $10 million from operations – with a one-off cost of $60 million to achieve such synergies.

Each party must pay the other $30 termination fee if the deal is not approved by its shareholders.

The transaction is expected to close in Q4 2019.

Over the past few years there have been tremendous improvements made in reducing the cost and time it takes to drill and complete a well. However most of the benefits have accrued to the E&P companies, not the oilfield service sector. As a whole, the sector is not generating enough returns and more mergers seem inevitable.




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