NexTier Enters Agreement to Acquire Alamo Pressure Pumping for $268 Million
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NexTier Oilfield Solutions has reached an agreement to acquire 100 percent of the ownership interests of Alamo Pressure Pumping for a transaction valuation of approximately $268 million, as further described below. The transaction is expected to be completed by August 31, 2021, subject to customary closing conditions and approvals.
“The acquisition of Alamo accelerates and magnifies the impact of our next generation technology strategy, providing NexTier with significant opportunities for deploying gas-powered equipment and complimentary integrated solutions into a market with high and increasing demand. Combined, we will operate the third largest base of active hydraulic horsepower across the U.S. and the largest base of next generation equipment in the Permian, improving our scale with highly-utilized fleets for an efficient customer base,” said Robert Drummond, president and chief executive officer of NexTier.
“We are impressed with Alamo’s performance and their successful track record in the Midland basin. Therefore, other than enhancement by our last-mile logistics, NexHub and digital tools, operational integration will be minimal. Joe McKie, the Alamo president and CEO, will continue to lead the Alamo division of NexTier and report directly to me,” added Drummond.
“NexTier remains focused on maintaining a strong financial position with attractive cash, liquidity, and leverage positions. Today’s acquisition accelerates our path to free cash flow generation in early 2022. With no near-term debt maturities, we expect to drive cash flow back onto the balance sheet through expanded Tier IV Dual Fuel capacity and anticipated higher utilization,” said Kenny Pucheu, executive vice president and chief financial officer of NexTier.
“This transaction is a win-win, as it immediately expands our gas-powered equipment capacity, accelerating speed to market by avoiding the significant time lag associated with organically growing our low carbon fleet, with added benefit of not increasing market capacity. In sum, we are acquiring a highly utilized base of next generation equipment at an attractive relative valuation, upholding our commitment to delivering value to shareholders,” added Pucheu.
Alamo Pressure Pumping, founded in 2017 and headquartered in Midland, Texas, is a leading Permian pressure pumper based on next generation horsepower and active fleets. Acquired assets include nine hydraulic fracturing fleets comprised of 460,000 horsepower, approximately 92 percent of which is Tier IV DGB capable. Alamo operates exclusively in the Permian Basin and primarily out of Midland. Alamo achieved $68 million of EBITDA in 2020.
About NexTier Oilfield Solutions
Headquartered in Houston, Texas, NexTier is an industry-leading U.S. land oilfield service company, with a diverse set of well completion and production services across the most active and demanding basins. Its integrated solutions approach delivers efficiency today, and their ongoing commitment to innovation helps customers better address what is coming next. NexTier is differentiated through four points of distinction, including safety performance, efficiency, partnership, and innovation.
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