Forum Energy Technologies, Inc. · NYSE:FET
Forum Energy Technologies — Merger or Acquisition (November 2023)
18 slides from Forum Energy Technologies's merger presentation, Nov 3, 2023
Slide 1: Acquisition of Variperm Energy Services
ACQUISITION OF VARIPERM ENERGY SERVICES
Slide 2: Forward Looking Statements and Non-GAAP Reconciliation
Forward Looking Statements and Non-GAAP Reconciliation The statements made during this presentation, including the answers to your questions, may include information that Forum Energy Technologies, Inc. (the “Company” or “FET”) believes to be forward-looking statements within the meaning of the Priv
Slide 3: FET to Acquire Variperm Energy Services
FET to Acquire Variperm Energy Services 2 FET to acquire Variperm Energy Services for $150 million cash and 2 million shares of FET common stock, subject to customary purchase price adjustments Accretive to financial metrics Maintains strong balance sheet Adds differentiated technology in niche mark
Slide 4: Variperm at a Glance
Variperm at a Glance $43 million Free Cash Flow 8 Service & Manufacturing Facilities 16 Patents 292 Employees $53 million Adjusted EBITDA $129 million Revenue Founded in 1969, Variperm is a leading manufacturer and provider of sand and flow control products for Canadian oil production 3 81% EBITDA t
Slide 5: Meaningful Impact to Scale and Profitability
9% 11% 11% 11% 13% 14% 15% 17% 19% 36% Meaningful Impact to Scale and Profitability 4 ~500 basis point improvement Adjusted EBITDA ($MM) Adjusted EBITDA Margin (%) ** Peers include Cactus, ChampionX, Core Laboratories, DMC Global, Dril-Quip, Expro Group, National Oilwell Varco, and Oil States Intern
Slide 6: Highly Accretive Acquisition
Highly Accretive Acquisition 5* FET + Variperm figures represent the sum of FET plus Variperm for the trailing twelve months as of September 30, 2023. Indicated changes reflect the difference between FET on a standalone basis and the sum of FET and Variperm on a combined basis. Please see “Forward L
Slide 7: Transaction and Financing Overview
Transaction and Financing Overview 6 Consideration Common Stock: 2 million shares Cash: $150 million Note: Transaction value is as of the closing stock FET stock price of $21.74 on November 1, 2023 Acquisition for ~$195 million at 3.7x TTM as of 3Q23 EBITDA Sources of cash include ABL, seller term l
Slide 8: Extensive Acquisition and Integration Experience
CANNON SERVICES, LTD Key Acquisitions In the Last 12 Years Drive EBITDA Today B+V Oil Tools Extensive Acquisition and Integration Experience 7 2011 2011 2013 2017 2021 20182017 2013
Slide 9: Variperm Enhances FET's Financial Profile
Variperm Enhances FET’s Financial Profile 8 Increases profitability and margins Meaningful scale improves FET’s investibility Capital-light business model yields strong free cash flow Cash and stock acquisition with highly accretive multiple Acquisition financing maintains conservative net leverage
Slide 10: Variperm Premium Downhole Production Solutions
Variperm Premium Downhole Production Solutions 9 Producer Well Injector Well Illustrative Application: Thermal Oil Well Pair Artificial Lift Steam Chamber Tubing Wellbore Flow Control Sand Control Customized sand control solutions optimize production and injection by preventing unconsolidated reserv
Slide 11: FET's Global Footprint Enables Expansion
FET’s Global Footprint Enables Expansion Ability to utilize FET’s global sales and distribution network Outside of Canada, Variperm services the United States and Mexico Expands FET’s footprint and customer base in Canada Variperm pursues non-Canadian markets with opportunistic and targeted approach
Slide 12: Expands FET's Total Addressable Market
Expands FET’s Total Addressable Market 11MultiLift Artificial Lift Solutions Davis-Lynch™ Casing Hardware OptiCon™ Flow Control Solutions proSERIES™ Sand Control Solutions Enhances FET’s existing artificial lift product and solutions portfolio Revenue synergies from sales pull-through
Slide 13: Canadian Oil Critical to Global Energy Security
Canadian Oil Critical to Global Energy Security Source: Sell-side research; Canada Energy Regulator; bp Statistical Review of World Energy 2022 – 71st Edition Oil Production by Country (MMbbl/day)* * Production as of 2021; Western Canadian Sedimentary Basin (WCSB) production current WCSB is one of t
Slide 14: Canadian Energy an ESG Leader
Canadian Energy an ESG Leader 13 Source: Pathways Alliance Canadian energy is highly ranked compared to the world’s largest producers 100 75 50 25 0 R u ss ia Sa u d i A ra b ia Ir aq C h in a U A E B ra zi l K u w ai t K az ak h st an A lg e ri a V e n e zu e la N ig e ri a Q at ar U n it e d S ta
Slide 15: Appendix
Appendix
Slide 16: GAAP to Non-GAAP Reconciliation: Adjusted EBITDA
GAAP to Non-GAAP Reconciliation 15 Adjusted EBITDA * Reflects The Company believes that the presentation of EBITDA is useful to the Company's investors because EBITDA is an appropriate measure for evaluating the Company's operating performance and liquidity that reflects the resources available for
Slide 17: GAAP to Non-GAAP Reconciliation (continued): Free Cash Flow
GAAP to Non-GAAP Reconciliation (continued) 16 Free Cash Flow FET Variperm Transaction Combined ($ in millions) TTM 9/30/23 TTM 9/30/23 Adjustments* TTM 9/30/23** Free cash f low reconciliat ion*** Net cash provided by (used in) operations 12$ 45$ (10)$ 47$ Capital expenditures (8) (2) - (10) Procee
Slide 18: Transaction Sources and Uses and Capitalization
Transaction Sources and Uses and Capitalization 17 Sources Combined Capitalization Table * Reflects 2 million share issuance as part of the transaction’s equity consideration based on the closing share price of $21.74 on November 1, 2023. Uses Combined Liquidity ($ in millions) FET Equity* 43$ Selle
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