- Cathedral Energy Services Ltd. (CET) is acquiring the drilling services business of Altitude Energy Partners LLC for approximately US$100 million
- the transaction can be paid through a combination of cash and its common shares
- The arms-length transaction is expected to close in the next couple of weeks
- Cathedral expects the cash flow generated by Altitude to pay back to in under three years
- Altitude will continue to operate under the same brand and keep a majority of employees
- Cathedral Energy Services Ltd. (CET) is up 36.00 per cent trading at $0.68 per share as of 12:58 p.m. ET.
Cathedral Energy Services (CET) has agreed to acquire the drilling services business of Altitude Energy Partners LLC for approximately US$100 million.
Cathedral stated the transaction can be paid through a combination of cash and its common shares. The terms of the acquisition were negotiated at arm’s length and is expected to close in the next couple of weeks.
Altitude is a privately held, U.S.-based directional drilling services business with significant Texas operations, specifically in the Permian Basin. Cathedral believes this acquisition is an important step forward in its strategic plan for building and scaling its presence.
“This transaction with Altitude represents a transformative step forward by Cathedral with a combined U.S. market share of approximately 7.00 per cent… placing us firmly on the road to becoming a leading independent directional drilling company in both the U.S. and Canada,” Tom Connors, President and CEO of Cathedral, said.
Cathedral is expecting the cash flow generated by Altitude to pay back to in under three years and is highly valuable to shareholders. Altitude will also help provide a wider distribution channel to grow Cathedral’s market share even faster in the U.S.
“We also see tremendous opportunity to grow the business and drive substantial incremental adjusted EBITDAS by replacing third-party provided technology over time with existing Cathedral MWD and drilling technologies,” Connors said.
Altitude will continue to operate under the same brand in the U.S. The Altitude management team and its people will lead and operate Cathedral’s existing U.S. directional drilling business.
Cathedral will also keep on key Altitude personnel under employment and consulting contracts to ensure a seamless customer service experience, successful integration, and long-term alignment.
Cathedral Energy Services Ltd. (CET) is up 36.00 per cent trading at $0.68 per share as of 12:58 p.m. ET.