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C&J Energy, Keane Merge in $1.8bln Deal

June 18, 2019

Oilfield services firms C&J Energy Services and Keane Group, said  that they will merge in an all-stock deal valued at about $1.8 billion.

C&J Energy, which offers a suite of oil and gas production services, and Keane, which specializes in well completions would combine in what the companies described as a merger of equals. The deal would create a company with more than $4 billion in annual revenues.

Under the terms of the merger agreement, which has been unanimously approved by the Boards of Directors of both companies and the Special Committee of the Keane Board, C&J shareholders will receive 1.6149 shares of Keane common stock for each share of C&J common stock owned. The merger agreement permits C&J to pay its shareholders a cash dividend of $1.00 per share prior to closing. Upon closing, Keane and C&J shareholders will, in the aggregate, each own 50% of the equity of the combined company on a fully diluted basis. The share exchange is expected to be tax-free.

The merger of equals will create a leading well completion and production services company in the U.S., with increased scale and density across services and geographies with a prominent presence in the most active U.S. basins.

Both C&J and Keane share a commitment to safety and integrity, employee development, partnerships with blue-chip customers, technological innovation, and strong community relationships, all of which will be reflected in the operations of the combined company. On a pro-forma basis, the combined company would have approximately $4.2 billion in net revenue and approximately $636 million in adjusted EBITDA for the 12 months ended March 31, 2019.

In addition, the two companies anticipate to achieve annualized run-rate cost synergies of $100 million within 12 months after closing. With approximately $173 million in cash, or $106 million after the $1.00 per share cash dividend is paid to C&J shareholders, the combined company will have flexibility to invest in growth and technology and return capital to shareholders.

"The merger of equals unites two great companies, resulting in a broader portfolio of well completion services across an even greater footprint in the U.S., benefiting our combined employees, shareholders, customers, suppliers, and the communities in which we operate," said Robert Drummond, Chief Executive Officer of Keane.



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