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ProFrac Holding Corp. (PFHC)
Acquisition of U.S. Well Services, Inc. by ProFrac Holding Corp. Call |
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Corrected Transcript |
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22-Jun-2022 |
from those expressed in managements forward-looking statements. The listener or reader is encouraged to
read ProFracs prospectus, which can be found at sec.gov or on the companys Investor Relations section in the SEC filing tab to understand certain of those risks and uncertainties and contingencies.
And now, I would like to turn the call over to ProFracs CEO, Ladd Wilks. Ladd?
Ladd Wilks
Chief Executive Officer, ProFrac Holding
Corp.
Hi. Thanks, Rick. Good morning, everyone. Were pleased to have announced that we reached an agreement to acquire U.S. Well Services in a stock-for-stock transaction with an exchange ratio of 0.0561 shares of ProFrac Class A common stock for each share of U.S. Well Class A common stock. The acquisition
is expected to be completed in the fourth quarter of 2022 subject to the satisfaction of customary closing conditions, including the approval of U.S. Well stockholders.
As we said last week in our first quarter earnings call, we recognized the current environment is advantageous for our sector and we want to use this
opportunity to improve ours through cycle positioning. The acquisition of U.S. Well Services solidifies ProFracs position as the undisputed leader in electric hydraulic fracturing, which we believe represents the future of our industry.
In todays environment, we believe electric frac fleets provide improved efficiency, lower O&M cost, greater value and lower overall cost of
completion to our customers. It is a true win-win scenario for us, our customers, the environment and the communities in which we operate. We look forward to welcoming the U.S. Well Services team to the
ProFrac family. We recognized the hard work of everyone to get to this point and Im excited to join forces and build upon the foundation that this team has established. By leveraging, our scale and capabilities along with U.S. Well Services
Clean Fleet technology, we intend to make ProFrac, the electric frac provider in the US.
U.S. Well has been a pioneer in the electric frac space. As a
combined company, we believe we can optimize the cost structure and further increase our scale to enhance the benefits of our vertical integration, driving greater free cash flow through the cycle.
Now Im going to hand the call over to Matt and he can talk more about this acquisition and our strategy.
Matthew D. Wilks
President & Executive Chairman,
ProFrac Holding Corp.
Thank you, Ladd. Our pending acquisition of U.S. Well Services would create the preeminent leader in NextGen frac solutions in
a combined company with 44 active fleets by the end of 2022. Im going to start with the obvious merits of the deal. ProFracs 31 fleets combined with U.S. Wells six fleets for a total of 37 active fleets.
By the end of this year, when our three electric fleets that are currently under construction combined with U.S. Wells four electric fleets that are
also under construction, we expect to have 44 active fleets. Geographically, this will bring our fleet count in the Northeast, up four fleets to a total of eight active fleets, while also adding a fleet to the Permian Basin and a fleet to the
Rockies. 28 of those fleets or 63% of the combined company will be NextGen pumping technology, which we considered to be a Tier 4 or electric. 12 of those fleets or over a quarter will be electric, which will make us the largest electric fleet
provider. We expect that this is approximately doubled in the next largest electric fleet provider.
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