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 [Update 4-1-22 – Actually he got $3.6 million according to the proxy] but his restricted stock awards will vest fully ($8.6 million). Ms. Cougle will be eligible for a cash severance of $1.6 million (2 time base plus target bonus) [Update – she got $2 million]. Her restricted stock will also vest ($1.6 million).
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.