Frank's International (FI) Enters Agreement to Acquire Blackhawk Group from Bain Capital

October 7, 2016 7:52 AM EDT

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Frank's International (NYSE: FI) announced that it has entered into a definitive merger agreement to acquire Blackhawk Group Holdings, Inc., the ultimate parent company of Blackhawk Specialty Tools LLC (“Blackhawk”), a leading provider of well construction and well intervention services and products. Blackhawk is being purchased from Bain Capital Private Equity, a leading global private investment firm which acquired the business together with management in 2013.

Frank’s expects that Blackhawk’s specialty cementation tools will augment its tubular running services business by providing Frank’s the opportunity to diversify its offerings and emerge as a leader in a new business line and a significantly larger addressable market. In addition to what Frank’s believes is a line of well-regarded, market leading, technically differentiated specialty cementation tools, Blackhawk also provides well intervention products through its line of brute packers and related products, and is continuing its development of products for onshore and offshore applications.

Gary Luquette, Frank’s President and Chief Executive Officer, commented, “Similar to Frank’s, Blackhawk has a reputation for combining exceptional service with an innovative portfolio of technology that delivers consistent value to customers. Together we will continue to offer the same reliable service customers expect, while furthering customer relationships with new products and services across the Frank’s global footprint. Joining Blackhawk’s cementing tool expertise with Frank’s global tubular running services franchise will allow us to offer customers worldwide a more integrated suite of best-in-class products and services to address their well construction needs across all environments from land to shelf to deepwater.”

Billy Brown, Blackhawk’s Chief Executive Officer and a founder of the company, stated, “Joining the Frank’s global family is the next step in continuing the expansion of Blackhawk’s industry leading specialty products and equipment. Our team is proud of the progress we have made in developing innovative products and strong customer relationships through quality and reliable service, and we appreciate the support we have enjoyed from our partners at Bain Capital. Combining Frank’s and Blackhawk is the right strategic move at the right time, providing customers the same exceptional service with a broader platform to accelerate future growth.”

Todd Cook, a Managing Director at Bain Capital Private Equity, said, “We have been pleased to work with and support the experienced team at Blackhawk in executing a focused and durable strategy in a demanding, sophisticated market. We look forward to participating in the significant growth we believe will flow from combining these two best in class service providers.”

The merger consideration comprises a combination of approximately $150 million of cash on hand and approximately 12.8 million shares of Frank’s common stock, on a cash-free, debt-free basis (with approximately $80 million of Blackhawk debt being repaid at closing with proceeds from the transaction), subject to adjustment. Based on the Frank’s closing price on Thursday, October 6, 2016 the transaction is valued at approximately $321 million.

Frank’s is focused on driving revenue synergies, and expects the acquired products and services to benefit from Frank’s global presence, operating excellence and strong balance sheet, significantly enhancing the growth potential of the business. Additionally, over time, Frank’s expects to realize the benefits of increased cost efficiency by providing a broader set of product offerings through its combined global infrastructure and optimizing supply chain operations to take advantage of the expanded business.

The transaction is subject to regulatory approvals and other customary closing conditions. It is anticipated that the closing of the transaction will occur during the fourth quarter of 2016.

Morgan Stanley & Co. LLC served as Frank’s exclusive financial advisor on the transaction, and legal advice was provided by Baker & McKenzie LLP. Blackhawk was advised by Simmons & Company International, the energy specialist unit of Piper Jaffray, and legal advice was provided by Ropes & Gray LLP.

Frank’s will host a conference call to discuss the merger on Friday, October 7, 2016 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time). Participants may join the conference call by dialing (888) 771-4371 or (847) 585-4405. The conference access code is 43569843. The webcast and presentation materials will be accessible on the Investor Relations section of the Company’s website,

An audio replay of the conference call will be available approximately two hours after the conclusion of the call and will remain available for seven days. It can be accessed by dialing (888) 843-7419 or (630) 652-3042. The conference call replay access code is 43569843. The replay will also be available in the Investor Relations section of the Frank’s website approximately two hours after the conclusion of the call and will remain available for approximately 90 days.

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