After merger, US Well Service set for the Nasdaq

By US Well Service | July 24, 2018

Matlin & Partners Acquisition Corp., a publicly traded special purpose acquisition company, and U.S. Well Services LLC, a high-quality provider of hydraulic fracturing services and market leader in electric-powered fracturing, has 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 are leading a $135 million committed PIPE investment in the combined company for $10 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 percent 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 CEO 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 percent 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 percent 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.”