National Energy Services Reunited Corp · NASDAQ:NESR
National Energy Services Reunited — SPAC Merger (November 2017)
28 slides from National Energy Services Reunited's SPAC merger presentation, Nov 16, 2017
Slide 1: Investor presentation National Energy Services Reunited Corp. November 2017
Investor presentation National Energy Services Reunited Corp. NASDAQ -NESR November 2017
Slide 2: Disclaimer and Forward Looking Statement
Disclaimer and Forward Looking Statement Thispresentation(the“Presentation”)isforinformationpurposesonlyandisbeingdeliveredtoyouforthe olepurposeofyour onsiderationandevaluationofapotentialinvestmentinequity ecuritiesofNationalEnergy solicitationofanoffertobuy,or recommendationtopurchaseanyotherequi
Slide 3: Proven Senior Leadership and Sponsors
Proven Senior Leadership and Sponsors 3
Slide 4: Transaction highlights
Transaction highlights National Energy Services Reunited Corp. (“NESR”) has agreed to acquire Gulf Energy SAOC (“GES”) and NPS Holdings Ltd (“NPS” or “National Petroleum Services”) to be collectively named as National Energy Services Reunited Corp. (“NESR”) at the closing ofthe contemplated transact
Slide 5: Transaction structure
Transaction structure Illustrative source and uses (with no redemption) Sources $ Million Uses $ Million IPO proceeds @ $10 per share 229.2 Cashto GES 85.0 SCF Partners @ $10 per share 68.3 Cash to NPS 442.8 Private Investors @ $10 per share 29.2 NBO Private Investors 12.5 Majorinvestor @ $11.244 pe
Slide 6: Transaction milestones
Transaction milestones Key processmilestones Board Approval 11/11/2017 Transaction Announcement 11/12/2017 Obtain required regulatory approvals End 2017 -Q1 2018 Target closing End 2017 -Q1 2018 6
Slide 7: Transaction overview / Equity story / Targets detailed overview
Transaction overview Equity story Targets detailed overview 7
Slide 8: The combination will create the largest regionally focused OFS player
The combination will create the largest regionally focused OFS player NPS Leading regional provider of integrated energy services in the MENA and Asia Pacific regions Long-standing relationships with leading IOC and NOC clients 33% 34% 34% 34% 180 199 204 224 59 67 68 77 2013 2014 2015 2016 13% 8% O
Slide 9: NESR is expected to compare favourably to its listed peers
NESR is expected to compare favourably to its listed peers Revenue CAGR 13-16 EBITDA Margin 2017E Leverage (2017E) 1 (32%) Positioning vs. Key Peers Growth track record Leverage capacity Resiliency through downturn Cash flow generation Better margin profile Low tax rate Source: FactSet as of Novembe
Slide 10: NESR is expected to compare favourably to its listed peers (cont'd)
NESR is expected to compare favourably to its listed peers (cont’d) FV/EBITDA 2017E 20.6x 19.1x 15.9x Average: 16.1x 15.3x 15.1x 13.9x 12.7x Significant valuation upside potential Acquisition 6.9x 1 multiple Source: FactSet as of November 7, 2017 1 Based on acquisition firm value (excluding potentia
Slide 11: NESR is expected to compare favourably to its listed peers (cont'd)
NESR is expected to compare favourably to its listed peers (cont’d) FV/EBITDA 2018E Acquisition multiple Source: FactSet as of November 7, 2017 1 Based on acquisition firm value (excluding potential earn-outs) and on estimated EBITDA 2018 of $200mm 11
Slide 12: Transactions compare favourably to precedent transactions in the sector
Transactions compare favourably to precedent transactions in the sector Select recent transactions -FV/LTM EBITDA Source: MergerMarket, press releases, company filings Note: Average and median exclude NESR acquisition of GES and NPS Metrics reflect the implied value and EBITDA of the combined entiti
Slide 13: Transaction overview / Equity story / Targets detailed overview
Transaction overview Equity story Targets detailed overview 13
Slide 14: The combination will accelerate EBITDA growth through synergies and broad services
The combination will accelerate EBITDA growth through synergies, increased market share and a broad portfolio of services 1 Unique exposure to high growth MENA region 6 Proven and tested management Comprehensive provider of team who have grown the business services with scalable platform Demonstrabl
Slide 15: The Middle East remains amongst the most profitable regions globally
The Middle East remains amongst the most profitable 1 regions globally due to development costs at the bottom end of the curve Cost of supply1 Global liquids cost curve Brent equivalent forward looking breakeven oil price, USD/bbl 80 70 Oil sands Russia 60 Extra heavy oil onshore 49 50 50 50 Shallow
Slide 16: NESR's future growth story is supported by robust growth profile
NESR’s future growth story is supported by robust 1 growth profile across its key services and countries of operations… 2016A pro forma rev% by country Resilient and growing onshore rig market Middle East OFS spend by country ($mm) GCC onshore rig count 280 21,188 21,390 6% 3% 260 7% 26% 3,578 3,624
Slide 17: Comprehensive provider of services with scalable platform
Comprehensive provider of services with scalable 2 platform Become best-in-class services provider across the MENA region Enhanced services portfolio Integration of complementary WL WL businesses Stim Coil Cem DM DTR SWT Fluids AL WS OH CH NPS Footprint across key markets GES NOCs-focused and local
Slide 18: NOC/IOC focused customer base long term contract structure
NOC/IOC focused customer base long term 3 contract structure Key NOC customers Diversifiedclient portfolio Longstanding relationships with key operators, including Saudi Aramco, PDO, QP and ADCO Key IOC customers Increasing client preference for high quality local operators Large and diversified cli
Slide 19: NPS and GES have demonstrated sector leading resiliency since 2013
NPS and GES have demonstrated sector leading 4 resiliency since 2013 given strong service delivery and cost management Revenue CAGR 13A 16A 1 EBITDA CAGR 13A 16A 1 2016 vs. 2013 EBITDA 13% 10% 7% 155% 141% 130% 15% 12% 9% Growth 20% (21%) (78%) 0% (106%) (29%) US Large US US Large US US Large US Cap
Slide 20: Demonstrable track record of organic and inorganic growth
Demonstrable track record of organic and inorganic 5 growth 2014: 2015: ~ 90% of NPS is acquired by 4 institutional investors NPS establishes 2017: and refinances existing NPS enters GES increases focus Oman and andoperations 2017 acquires an 428 437 Indonesia based 369 2013: wireline 328 2016 264 N
Slide 21: Highly experienced management teams combined with supportive shareholder base
Highly experienced management teams combined 6 with supportive pre-transaction shareholder base Bringing together substantial sector experience Supportive proforma shareholder base 1 Backstop Name Title Years of experience Commitment PIPE 7% 7% Major investor Other Sherif Foda CEO 22 3% 14% 26 SCF C
Slide 22: NESR Strategy and Ambition
NESR Strategy and Ambition NESR’s strategy to deliver superior returns and growth in shareholder value Growth Ambition Create the leading regional MENA Oilfield Services player Leverage cost synergies and savings for incremental margins Substantial organic revenue synergies through cross-selling of
Slide 23: Transaction overview / Equity story / Target detailed overview
Transaction overview Equity story Target detailed overview 23
Slide 24: GES at a glance
GES at a glance Overview GES geographic presence and key clients Gulf Energy SAOC (“GES”) is a provider of high quality integrated oilfield service solutions in the Middle East and North Africa region, with a task force of ~1,200 people Structured as a holding company with subsidiaries set up for ea
Slide 25: GES at a glance (cont'd)
GES at a glance (cont’d) Business highlights Key services and 2016 revenue contribution Coiled Tubing Stimulation Well intervention Cementing Fishing services 16% 41% Fishing and services Sand management Fracturing remedial Machining and repairs services Milling/cutting services Drilling Drilling eq
Slide 26: NPS at a glance
NPS at a glance Overview NPS geographic presence and key clients NPS Holdings Limited (“NPS”) is a leading regional provider of integrated energy services in the MENA and Asia Pacific regions Currently present in 12 countries across the MENASA region and through various regional subsidiaries Long-st
Slide 27: NPS at a glance (cont'd)
NPS at a glance (cont’d) Business highlights Key services and 2016 revenue contribution Coiled tubing services ~85% Cased hole logging <5% Well Services Cementing services Stimulation, pumping, nitrogen Wireline Logging and Intervention services Slickline services Filtration and pipeline services Su
Slide 28: NPS and GES EBITDA Reconciliation (Unaudited)
NPSandGESEBITDA Reconciliation (UNAUDITED) Source: Company/NPS/GES; Financial measures presented in accordance with IFRS/Local GAAP 28
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