Enerflex and Exterran to create leading energy infrastructure company

Exterran Enerflex

Enerflex, a leading natural gas, compression, oil and gas processing, and other services provider announced this Monday it will merge its business with Exterran Corporation, a global systems and process company offering solutions in the oil, gas, water, and power markets.

Firstly, the combination will be an all-stock transition that will create a premier integrated global provider of energy infrastructure. The new company will operate as Enerflex Ltd., and will also keep its headquarters in Calgary, Alberta, Canada.

Moreover, the transaction will strengthen Enerflex’s ability to serve customers in key natural gas, water, and energy transition markets; while enhancing shareholder value through sustainable improvements in profitability and cash flow generation.

In addition, as outlined above, the combination will be stock-based. Enerflex will acquire all of the outstanding common stock of Exterran. The transaction will result in approximately 124 million Enerflex common shares outstanding upon closing; representing an implied combined enterprise value of approximately US$1.5 billion.

Furthermore, the transaction value of Exterran will be around $735 million, which represents an 18% premium to Exterran’s enterprise value. Also, the transaction value paid for Exterran implies an EV/2022E Adjusted EBITDA of 3.6x and Price/2022E Cash Flow of 1.9x, including synergies, respectively.

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Enerflex to scale efficiencies

As a result, upon closing of the transaction Enerflex and Exterran shareholders will respectively own approximately 72.5% and 27.5% of the total. Also, the new company will continue to trade on the Toronto Stock Exchange. The company intends to apply to either the New York Stock Exchange or the NASDAQ exchange as well.

Marc Rossiter, Enerflex’s CEO, said. “This is an exciting day in the history of our companies. The Transaction is immediately accretive to shareholders; enhances our presence, offerings, and scale across our regions; and importantly, executes upon our years-long strategic goal of increasing recurring revenues to improve the profitability and resiliency of our platform.”

He also remarked. “Enerflex and Exterran each have a long history of global expertise in the delivery of modular energy solutions. Together, we are more efficient and better positioned in global capital markets. The Transaction will improve our ability to partner with an expanded set of customers to solve their growing energy infrastructure challenges with integrity, creativity, commitment, and success.”

Finally, Andrew Way, CEO of Exterran, said. “The scale and efficiencies this combination brings is the right path for Exterran and brings significant opportunities for accelerated growth in produced water treatment and energy transition products and services.” Click here to know the full details of the transaction.

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