~ Force’s Proprietary Rental Tools Used By Blue Chip Oil and Gas Operators ~
~ Force Grew Revenues by 87% in 2022 to
~ Transaction Provides Force Capital to Expand Presence in Additional Basins ~
~ Closing of the Transaction Requires No Minimum Cash Condition ~
~ Stratim Management to Join Newly Combined Company’s Board of Directors ~
Investment and Company Highlights
- Force designs and assembles proprietary equipment which provides superior solutions for Force’s clients and yields high margins, free cash flows and returns on invested capital
- Multiple revenue streams with strong EBITDA margins derived from Force’s rental tools used during frac and flowback operations for newly drilled and mature wellbores
- Loyal blue chip customer base, including Conoco Phillips, Devon Energy, BPX, Pioneer Natural Resources, Marathon Oil and many others driven by Force’s full service offering
- Patented continuous frac solution and innovative new product offering positions Force to further expand its competitive advantages
- Force delivered its first geothermal well solution in 2022
- Force is a critical link for ESG in well completions through its ability to deliver a safer, cleaner and faster well completion process
- Newly combined Company to be led by Force management with SCAC management joining the board of directors
Transaction Overview
The transaction values Force at an enterprise value of
The proposed transaction, assuming no SCAC stockholders exercise their redemption rights and PIPE financing of
Under the scenario outlined above, current Force equity holders are expected to own at least 32.9% of the combined company. SCAC’s public stockholders will own approximately 17.1% and SCAC’s sponsor and related parties will collectively own approximately 17.1%. The remaining shares of the company will be owned by third party financing parties and any existing Force selling stockholders that elect to receive additional equity instead of cash.
The proposed transaction has been structured as an “Up-C” where former Force equity holders will retain their equity interests in Force and will receive non-economic voting shares of the combined company at closing. The combined company will also enter into a customary tax receivables arrangement with the current equity holders of Force, which will provide for the sharing of certain tax benefits as realized by the combined company.
The Board of Directors of SCAC and all of the members and managers of Force have unanimously approved the proposed transaction. The proposed transaction will require the approval of SCAC’s stockholders, and is subject to other customary closing conditions, including the receipt of certain regulatory approvals. The proposed transaction is expected to close in the second half of 2023.
Advisors
EF Hutton, a division of
About Stratim
About
Force Pressure Control is a vertically integrated provider of pressure control related rental tools and services to the energy industry. The Company, formed in 2019 and originally servicing the Eagle Ford basin in
Forward Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks, uncertainties, and assumptions that are difficult to predict. All statements other than statements of historical fact contained in this release, including statements regarding future events, our future financial performance, business strategy, and plans and objectives of management for future operations, are forward-looking statements. SCAC has attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” or “should,” or the negative of these terms or other comparable terminology. The forward-looking statements made herein are based on SCAC’s and Force’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Actual results could differ materially from those described or implied by such forward-looking statements as a result of various important factors, including, without limitation, its limited operating history, competitive factors in Force’s industry and market, and other general economic conditions. The forward-looking statements made herein are based on SCAC’s and Force’s current expectations, assumptions, and projections, which could be incorrect. The forward-looking statements made herein speak only as of the date of this release and SCAC undertakes no obligation to update publicly such forward-looking statements to reflect subsequent events or circumstances, except as otherwise required by law. SCAC cautions you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of SCAC, incident to the development, production, gathering and sale of oil, natural gas and natural gas liquids. In addition, SCAC cautions you that the forward-looking statements contained in this press release are subject to the following factors: (i) the occurrence of any event, change or other circumstances that could delay the business combination or give rise to the termination of the agreements related thereto; (ii) the outcome of any legal proceedings that may be instituted against SCAC following announcement of the transactions; (iii) the inability to complete the business combination due to the failure to obtain approval of the stockholders of SCAC, or other conditions to closing in the transaction agreement; (iv) the inability of SCAC and Force to complete a PIPE offering in connection with the proposed business combination; (v) the risk that the proposed business combination disrupts Force’s current plans and operations as a result of the announcement of the transactions; (vi) Force’s ability to realize the anticipated benefits of the business combination, which may be affected by, among other things, competition and the ability of Force to grow and manage growth profitably following the business combination; (vii) costs related to the business combination; (viii) changes in applicable laws or regulations; and (viii) the possibility that Force may be adversely affected by other economic, business, and/or competitive factors. Should one or more of the risks or uncertainties described in this press release, or should underlying assumptions prove incorrect, actual results and plans could different materially from those expressed in any forward-looking statements. Additional information concerning these and other factors that may impact the operations and projections discussed herein can be found in SCAC’s periodic filings with the
No Offer or Solicitation
This press release shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of any business combination. This release shall also not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of section 10 of the Securities Act of 1933, as amended.
Additional Information and Where to Find It
In connection with the proposed transaction, SCAC will prepare a proxy statement (the “Proxy Statement”) to be filed with the
Participants in the Solicitation
SCAC, Force and their respective directors, managers and executive officers, under
Contact
Chief Executive Officer
Telephone: (775) 318-3629
Email: sreekanth@stratimcloud.com
Source:
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