This Wednesday, Calgary-based Cathedral Energy Services Ltd. announced it closed the acquisition of the operating assets of Valiant Energy Services. Indeed, the transaction proceeded for a purchase price of $1,500,000 through the issuance of 3,464,204 Cathedral’s common shares to Valiant; the company shared in a media release.
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Moreover, the Consideration Shares will be subject to a 4-month statutory hold period.
About the transaction between Cathedral Energy and Valiant Energy
According to what the parties disclosed in a media release, post-closing, Cathedral’s Canadian business could operate over 30 jobs in Q3-2021; specifically in the Western Canadian Sedimentary Basin. In fact, this basin equates to an estimated market share of current active jobs in Canada of more than 20%.
On the other hand, Valiant shared it currently has a 5-job capability. Besides, it has been consistently operating at high levels of utilization since inception.
This transaction also represents an opportunity for further margin expansion, the companies shared. Particularly “as Cathedral’s complimentary motor fleet replaces motor rentals on existing Valiant jobs.”
Notably, the principal owner of Valiant, Vaugn Spengler, entered into a long-term performance-based agreement. Accordingly, this deal could help Mr. Spengler remain with Cathedral; besides of letting him continue focusing on opportunities to support and expand the existing customer base.
Tom Connors, Cathedral President & CEO, commented on the acquisition announcement; “Valiant has constantly outperformed the market on a utilization basis.”
Comments on the transaction
Besides, Connors noted that the company has a strong performance in delivering above-average margin performance. He also mentioned the positive record of financial results Valiant has achieved over several years. According to Connors, this resulted from the company’s high reliability and efficient operations.
On the other hand, regarding Spengler’s addition to Cathedral, Connors noted; “We are pleased to have Mr. Spengler join our organization and are excited about his contribution to our growth into the future.”
Cathedral’s CEO also said that this deal represents another step on its strategic consolidation path. Additionally, he mentioned it solidifies the company’s position. Particularly, as one of the top three directional drilling contractors in Canada by job count.
Lastly, Cathedral Energy’s CEO commented they “will continue to explore opportunities to expand (their) business in both Canada and the USA.” Accordingly, the companies will achieve it “through organic growth, further accretive acquisitions, and leading-edge technology.”
Cathedral Energy is a company that operates in the U.S. under Cathedral Energy Services Inc. Besides, it publicly trades on the Toronto Stock Exchange under the symbol “CET.” Indeed, the Company is a trusted partner; particularly to North American energy companies requiring high-performance directional drilling services.
