- Creates one of the first publicly traded oilfield service
companies with all-electric hydraulic fracturing capabilities using
its proprietary technology, Clean Fleet®
- Enables U.S. Well Services to expand its fleet size to 17
spreads with approximately 800,000 hydraulic horsepower
- Secures a $135 million PIPE
commitment at $10.00 per share from
leading institutional investors led by Crestview
Partners
- Total enterprise value of $588
million or 2.6x 2019 projected adjusted EBITDA
- U.S. Well Services to be led by a strong existing and expanded
management team
- Conference call scheduled for July 16,
2018 at 11:00 a.m. Eastern
Time to discuss the business combination
HOUSTON and NEW YORK,
July 15, 2018 /PRNewswire/ -- Matlin
& Partners Acquisition Corporation (NASDAQ: MPAC, MPACU, MPACW)
("MPAC") a publicly traded special purpose acquisition company, and
U.S. Well Services, LLC ("USWS"') a high-quality provider of
hydraulic fracturing services and market leader in electric-powered
fracturing, today announced entry into a merger and contribution
agreement whereby USWS will combine with MPAC to become a publicly
listed company with an anticipated initial total enterprise value
of approximately $588 million. Funds
managed by Crestview Partners ("Crestview") are leading a
$135 million committed PIPE
investment in the combined company for $10.00 per share to provide incremental equity
capital to accelerate the rollout of USWS' electric Clean Fleet®
technology. Upon the completion of the business combination, MPAC
will be renamed U.S. Well Services, Inc. and is expected to trade
on the Nasdaq Capital Market.
USWS is a technology-oriented oilfield service company focused
exclusively on hydraulic fracturing services for the oil and gas
industry. USWS is one of the first companies to develop and
commercially deploy electric-powered hydraulic fracturing
equipment. USWS' patented Clean Fleet® technology combines natural
gas turbine generators with electric motors and existing industry
equipment for hydraulic fracturing, offering numerous advantages
over conventional, diesel-powered fracturing fleets.
The business combination takes public a next-generation pressure
pumping company, with unique Clean Fleet® technology, a
customer-centric culture and a commitment to driving safety and
efficiency. The transformative growth capital provided by the
transaction will advance USWS' ability to deliver economic benefits
to its customers and a path to creating significant value for its
investors. The combination creates a company that is
well-positioned to capitalize on market opportunities created by
increasing development of shale plays, a shift to multi-well pads
and rising completion intensity that is creating a need for
innovative solutions that address cost, safety, environmental
impact and regulatory considerations.
The business combination values USWS at 2.6x 2019 projected
adjusted EBITDA, implying a discount of 32% to publicly traded
peers1. Proceeds from the business combination are
expected to allow USWS to build five additional Clean Fleets® and
one additional conventional fleet, expanding its fleet size to 17
spreads with approximately 800,000 hydraulic horsepower. Once the
business combination is completed, USWS projects a strong balance
sheet with approximately $250 million
of liquidity to support future growth.
"This combination with USWS represents a significant opportunity
in a provider of electric-powered hydraulic fracturing services
with disruptive technology and significant growth potential," said
David Matlin, Chairman and Chief
Executive Officer of MPAC. "The capital being provided through this
business combination will support USWS' efforts to build on the
advantages of its Clean Fleet® technology to drive growth through
increased fleet deployments, while strengthening the company's
balance sheet and positioning the company for long-term success.
Our confidence in the business is shared by existing stockholders
and USWS management, who are rolling 100% of their equity to
participate in the potential upside of the combination. We look
forward to working closely with USWS' experienced management team
to drive significant value for our stockholders."
"This transformational business combination enhances our capital
position and will allow USWS to rapidly expand the number of
fracturing spreads powered by Clean Fleet® technology in operation
to meet customer demand and drive growth," said Joel Broussard, Chief Executive Officer of USWS.
"We are excited to partner with MPAC and Crestview, who share our
commitment to investing in people, disruptive innovation and a
culture of safety. I also want to thank our talented team of
employees whose dedication and focus on providing top tier service
quality for our customers helped to make this business combination
possible. As we begin the next chapter in our history as a publicly
traded company, we will remain focused on continuing to achieve
industry leading performance to deliver benefits to our customers,
employees, suppliers and the communities in which we operate."
Adam Klein, a Partner at
Crestview, said, "We are excited to partner with the senior
leadership team at USWS, the leader in 100% electric hydraulic
fracture stimulation. We believe the pressure pumping industry is
at an inflection point and the market will move toward
electric-powered frac fleets. USWS' patented Clean Fleet®
technology provides customers with substantial cost savings,
environmental benefits and improved safety. We look forward to
their expansion as we anticipate robust customer demand in the
years to come."
Strategic Benefits of USWS' Clean Fleet® Technology
USWS' Clean Fleet® is a proven technology with over 6,000 stages
completed since 2014, making USWS a leading provider of
electric-powered hydraulic fracturing services. Clean Fleet®
technology is supported by a robust intellectual property
portfolio. USWS has been granted or has received notice of
allowance for 15 patents and has 53 additional patents pending.
We believe Clean Fleet® provides USWS with a distinct
competitive advantage over traditional, conventional pressure
pumping fleets as a result of the following
characteristics:
- Enhanced safety features – Clean Fleet® eliminates
diesel fuel, reduces noise pressure and reduces heat emissions,
making the wellsite safer for USWS employees and all personnel at
the wellsite. By eliminating diesel truck deliveries, Clean Fleet®
also reduces traffic in the communities in which USWS operates and
limits wellsite crowding.
- Fuel cost savings – The use of natural gas directly from
the field allows Clean Fleet® to eliminate diesel fuel costs,
providing significant fuel cost savings as compared to conventional
diesel-powered equipment.
- Improved operational efficiency – Electric motors offer
superior stability and reliability, allowing Clean Fleet® to
maximize productive time at the wellsite. This efficiency results
in additional economic benefit to our customers in the form of
savings by reducing the number of days onsite.
- Reduced repair and maintenance cost – Clean Fleet®
eliminates the use of diesel engines and transmissions, which
require ongoing maintenance in the form of routine oil and filter
changes, component replacements and eventual rebuilds. Moreover,
Clean Fleet® has fewer mechanical parts that are susceptible to
breakage, wear and malfunction, which reduces the time and capital
that must be spent on maintaining equipment.
- Longer equipment useful life – Natural gas-powered
generators are proven, long-lived assets that have operated in
harsh environments for decades. In conjunction with the turbine
generators, Clean Fleet® uses electric motors, which have been in
use in other heavy-duty industrial applications for decades with a
demonstrated useful life in excess of conventional pressure pumping
equipment.
- Reduced noise pollution – Clean Fleet® offers a dramatic
reduction in sound pressure and low frequency noise as compared to
conventional fracturing fleets, which benefits the surrounding
communities and improves worksite conditions for USWS employees and
customers.
- Environmental benefits – Clean Fleet® reduces up to 99%
of NOx and CO emissions as compared to conventional fleets,
reducing the environmental impact of hydraulic fracturing
operations.
Management and Board
The combined company will be led by USWS' current Chief
Executive Officer, Joel
Broussard. In addition, upon completion of the
combination, the USWS management team, which will become the
combined company's management team, will be expanded with the
addition of Kyle O'Neill as Chief
Financial Officer. Mr. O'Neill will join USWS from TCW where he
serves as a Managing Director in the Direct Lending Group. Mr.
O'Neill brings more than 18 years of direct investing and capital
markets experience. Matt Bernard,
who currently serves as Chief Financial Officer of USWS, will
become Chief Administrative Officer, and Nathan Houston will continue to serve as Chief
Operating Officer.
Upon completion of the proposed business combination, the
combined company's board of directors will consist of seven
members, including Mr. Broussard, as well as two members from MPAC,
two members from USWS and two members from Crestview.
Business Combination Details
The proposed business combination is subject to customary
closing conditions, including regulatory approvals and the approval
of MPAC stockholders. The combination is expected to be completed
in the fourth quarter of 2018.
Additional information about the proposed business combination
and related financing transactions will be described in MPAC's
preliminary proxy statement relating to the merger, which MPAC will
file with the U.S. Securities and Exchange Commission (the "SEC").
The description of the proposed business combination is only a
summary and is qualified in its entirety by reference to the merger
and contribution agreement, a copy of which will be filed by MPAC
with the SEC as an exhibit to a Current Report on Form 8‐K.
Advisors
MPAC was advised on the business combination by Cantor
Fitzgerald & Co. with Bracewell LLP as legal counsel.
Piper Jaffray & Co., through its
Simmons & Company International division, acted as financial
advisor, and Winston & Strawn LLP acted as legal advisors to
USWS. Vinson & Elkins L.L.P. acted as legal counsel to
Crestview.
Conference Call
On Monday, July 16, 2018 at
11:00 a.m. Eastern time, the
management of MPAC and USWS will host an investor conference call
to discuss the proposed business combination. Interested
investors may participate in the call by dialing (866) 610-1072 and
refer to audience passcode 6498027. In addition, a webcast of the
conference call can be accessed at http://uswellservices.com. There
will not be a question-and-answer session on this call.
A telephonic replay of the conference call will be available
through Monday, July 30, 2018. To
access the replay, please dial (800) 585-8367 and reference
audience passcode 6498027. Interested parties may also access the
archived webcast of the conference call through the company's
website approximately two hours after the end of the call.
About MPAC
Matlin & Partners Acquisition Corporation is a special
purpose acquisition company incorporated in March 2016 for the purpose of effecting a merger,
capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with one or more
businesses.
MPAC's strategy is to identify and acquire a business that is
misvalued in an industry impacted by market dislocation or
regulatory uncertainty, and whose market value and operating
results can be positively affected by its management team.
Additional information regarding MPAC can be found at
http://www.matlinpatterson.com/matlin-partners/.
About USWS
U.S. Well Services, provides high-pressure, hydraulic fracturing
services in unconventional oil and natural gas basins. Both our
conventional (diesel) and Clean Fleet® (electric) hydraulic
fracturing fleets are among the most reliable and highest
performing fleets in the industry, with the capability to meet the
most demanding pressure and pump rate requirements in the
industry.
USWS operates in many of the active shale and unconventional oil
and natural gas basins of the United
States and its clients benefit from the performance and
reliability of equipment and personnel. Specifically, all of USWS'
fleets operate on a 24 hour basis and have the ability to withstand
the high utilization rates that result in more efficient
operations.
USWS' senior management team has extensive industry experience
providing pressure pumping services to exploration and production
companies across North America.
Additional information regarding USWS can be found at
http://uswellservices.com/.
About Crestview Partners
Founded in 2004, Crestview Partners is a value-oriented private
equity firm. The firm is based in New
York and manages funds with over $7
billion of aggregate capital commitments. Crestview
primarily focuses on specialty areas including energy, media,
industrials and financial services. Within energy, Crestview is an
active investor in the oilfield services space, in addition to the
E&P and midstream sectors. www.crestview.com
Additional Information About The Business
Combination And Where To Find It
MPAC intends to file with the SEC preliminary and definitive
proxy statements in connection with the proposed business
combination and other matters and will mail a definitive proxy
statement and other relevant documents to its stockholders as of
the record date established for voting on the proposed business
combination. MPAC's stockholders and other interested persons are
advised to read, once available, the preliminary proxy statement
and any amendments thereto and, once available, the definitive
proxy statement, in connection with MPAC's solicitation of proxies
for its special meeting of stockholders to be held to approve,
among other things, the proposed business combination, because
these documents will contain important information about MPAC, USWS
and the proposed business combination. MPAC's stockholders may also
obtain a copy of the preliminary or definitive proxy statement,
once available, as well as other documents filed with the SEC by
MPAC, without charge, at the SEC's website located at www.sec.gov
or by directing a request to 520 Madison Avenue, 35th
Floor, New York, NY Attention:
General Counsel, or by telephone at (212) 651-9500.
Participants in the Solicitation
MPAC and its directors and executive officers, USWS and its
directors and executive officers, and other persons may be deemed
to be participants in the solicitations of proxies from MPAC's
stockholders in respect of the proposed business combination.
Information regarding MPAC's and USWS' directors' and executive
officers' participation in the proxy solicitation and a description
of their direct and indirect interests will be contained in the
proxy statement related to the proposed business combination when
it becomes available, and which can be obtained free of charge from
the sources indicated above.
Forward‐Looking Statements
This news release includes "forward-looking statements" within
the meaning of the "safe harbor" provisions of the United States
Private Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words such as
"estimate," "plan," "project," "forecast," "intend," "expect,"
"anticipate," "believe," "seek," "target" or other similar
expressions that predict or indicate future events or trends or
that are not statements of historical matters. Such forward-looking
statements with respect to the benefits of the proposed business
combination, the future financial performance of the combined
company following the proposed business combination, changes in the
market for USWS' services, and expansion plans and opportunities,
including future acquisition or additional business combinations
are based on current information and expectations, forecasts and
assumptions, and involve a number of judgments, risks and
uncertainties. Accordingly, forward-looking statements should not
be relied upon as representing MPAC's or USWS' views as of any
subsequent date, and neither MPAC nor USWS undertakes any
obligation to update forward-looking statements to reflect events
or circumstances after the date they were made, whether as a result
of new information, future events or otherwise, except as may be
required under applicable securities laws. You should not place
undue reliance on these forward-looking statements. As a result of
a number of known and unknown risks and uncertainties, actual
results or performance may be materially different from those
expressed or implied by these forward-looking statements. Some
factors that could cause actual results to differ include, but are
not limited to: (1) the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
and contribution agreement between USWS and MPAC; (2) the outcome
of any legal proceedings that may be instituted against USWS or
MPAC following announcement of the proposed business combination
and related transactions; (3) the inability to complete the
transactions contemplated by the merger and contribution agreement
between MPAC and USWS due to the failure to obtain approval of the
stockholders of MPAC or satisfy other conditions to the closing of
the proposed business combination; (4) the ability to obtain or
maintain the listing of MPAC's common stock on the Nasdaq Capital
Market following the proposed business combination; (5) the risk
that the proposed business combination disrupts the parties'
current plans and operations as a result of the announcement and
consummation of the transactions described herein; (6) the ability
to recognize the anticipated benefits of the proposed business
combination, which may be affected by, among other things,
competition and the ability of the combined business to grow and
manage growth profitably; (7) costs related to the proposed
business combination; (8) changes in applicable laws or
regulations; (9) the possibility that USWS or MPAC may be adversely
affected by other economic, business, and/or competitive factors;
and (10) other risks and uncertainties indicated from time to time
in the proxy statement to be filed by MPAC in connection with the
proposed business combination, including those under "Risk Factors"
therein, and other factors identified in MPAC's prior and future
filings with the SEC, available at www.sec.gov.
No Offer or Solicitation
This news release is for informational purposes only and does
not constitute an offer to sell or the solicitation of an offer to
buy any securities, or a solicitation of any vote or approval, nor
shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No portion of MPAC's or USWS' websites is
incorporated by reference into or otherwise deemed to be a part of
this news release.
Contacts
For MPAC and USWS
Meaghan Repko / Mahmoud Siddig / Aaron Palash
Joele Frank, Wilkinson Brimmer
Katcher
(212) 355-4449
For Crestview
Jeffrey Taufield/Daniel Yunger
Kekst and Company
212-521-4800
jeffrey.taufield@kekst.com / daniel.yunger@kekst.com
1 Pricing as of July 12,
2018; peer group includes C&J Energy Services, FTS
International, Keane Group Inc., Liberty Oilfield Services,
ProPetro Holding Corp. and RPC, Inc.
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SOURCE Matlin & Partners Acquistion Corporation