Enerflex sinks amid US$735M all-stock Exterran takeover
BNN Bloomberg
Enerflex Ltd. announced on Monday that it’s buying Houston-based Exterran Corp. in a US$735-million cross-border deal that will combine a pair of midstream service providers in the energy industry.
Enerflex Ltd. announced on Monday that it’s buying Houston-based Exterran Corp. in a US$735-million cross-border deal that will combine a pair of midstream service providers in the energy industry.
Under the terms of the deal, Calgary-based Enerflex will swap 1.021 of its shares for each common share of Exterran. Including assumed debt, the transaction is worth US$1.5 billion.
Enerflex also announced new financing on Monday, including a US$600-million revolving credit facility as well as a US$925-million bridge loan.
The amount of debt that Enerflex is taking on caught some analysts by surprise.
“The acquisition will significantly increase Enerflex's size, scale, international focus and gross margin from recurring revenue, however it will also notably increase the company's leverage metrics in the near term which is likely to make investors weigh the transaction accordingly,” wrote Stifel Analyst Cole Pereira in a note to clients.
After the deal closes, Exterran shareholders will own 27.5 per cent of Enerflex, which will remain headquartered in Calgary, the companies said. Enerflex said it will maintain its listing on the Toronto Stock Exchange and will also apply for a U.S. listing either on the Nasdaq or New York Stock Exchange.
