Wilcox Swartzwelder & Co have released the most recent data on notable merger and acquisition trends, deals and valuation in the energy and industrial sector.
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Mergers & Acquisitions Trends For The Energy and Industrial Sectors (March 2014)
1. Sector Update | March 2014
phone 972.831.1300 | web WS-iBank.com
-
1,000
2,000
3,000
4,000
5,000
6,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Historical M&A Volume
(Completed Deals < $500 Million)
10 Year Avg. = 3,763
7.0x
7.9x
9.4x
8.4x
9.2x
8.4x
7.1x
7.4x
8.5x
7.4x
8.2x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Transaction Valuations
(EBITDA Multiple; Completed Deals<$500 Million)
Energy & Industrial Sector Observations
Oilfield Service Industry’s Outlook in 2014. Higher GDP will help to spur on oil
demand with North America generating oil production growth, resulting in a balanced
supply and demand scenario and continued support for crude prices at ~$100/bbl.
Total upstream capital expenditure levels are forecasted to grow in the upper single
digits in 2014, with North American growth somewhat lower, offset by international
growth expected to be somewhat higher. Overall, 2014 looks like it will be a year of
growth for the oilfield services industry. (Market Realist – February 7, 2014)
U.S. Moving Toward Oil Independence. U.S. oil imports fell sharply again in 2013
while petroleum exports rose, leading some analysts to proclaim that a new era of
energy independence is just a few years away. "We're at the beginning of a long
upswing," says Citigroup analyst Eric Lee. Exports, mostly of refined gasoline and
diesel, rose about 11%, narrowing the country's petroleum deficit by about $59
billion, or 20%, to $233 billion. (USA Today – February 9, 2014)
Eagle Ford Boom Could Produce $30 billion in Spending. The unrelenting pace of
drilling and development will continue in South Texas this year, with oil and gas
companies expected to spend between $23 billion and $30 billion in the Eagle Ford
Shale. A new report from research and consulting company GlobalData calls the Eagle
Ford “an even larger resource than initially thought” and says the industry remains
enamored of the field, which has emerged as one of the country's hot spots for crude
oil production. The report pegs 2014 spending at $30 billion as companies do
everything from drilling wells to building pipelines and processing plants. (San
Antonio Express News – March 18, 2014)
102 Decker Court
Suite 204
Irving, Texas 75062
972.831.1300
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Broader Middle Market M&A Trends
2. 2
Sector Update | March 2014
phone 972.831.1300 | web WS-iBank.com
Energy Stock Price Performance
Red – New York Stock Exchange Composite
Blue – Oilfield Services Index
Green – Exploration & Production
U.S. Rig Count
(As of February 28, 2014)
Industrial Stock Price Performance
Red – New York Stock Exchange Composite
Blue – Industrial and Infrastructure
U.S. Industrial Manufacturing (ISM)
(As of March 1, 2014)
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
0
250
500
750
1,000
1,250
1,500
1,750
2,000
2,250
Jan-07Jul-07Jan-08Jul-08Jan-09Jul-09Jan-10Jul-10Jan-11Jul-11Jan-12Jul-12Jan-13Jul-13Jan-14
Oil Gas % Oil
Basin
Rig
Count
YoY Rig
Change
%
Change
Permian 493 15 3%
Eagle Ford 221 -7 -3%
Williston 176 -13 -7%
25.0
30.0
35.0
40.0
45.0
50.0
55.0
60.0
65.0
70.0
75.0
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14
PMI
Dec-13 Jan-14 Feb-14
PMI 56.5 51.3 53.2
3. 3
Sector Update | March 2014
phone 972.831.1300 | web WS-iBank.com
Notable Energy & Industrial Transactions
Announce-
ment Date
Acquiror Target Target/Transaction Description
Transaction
Value ($M)
Energy & Industrial Manufacturing and Services
2/28/14 National Automation
Services, Inc.
JD Field Services Provider of roustabout, water services, rig haul and
trucking services to the oil and gas industry with
operations in the Bakken and Rocky Mountain regions
--
2/24/14 ALS Oil & Gas BMP Enterprises, LLC Texas-based provider of turnkey monitoring solutions
including the design, planning and installation of
monitoring solutions using memory tools, permanent tools
and fiber optic based acoustic and temperature monitoring
--
2/18/24 Intervale Capital Energes Oilfield
Solutions
Capitalization of new platform company that provides
flowback and well-testing, H2S monitoring and safety
services, and water transfer
--
2/13/14 AMEC Foster Wheeler Global conglomerate that provides engineering,
construction services and supplies power equipment to the
oil & gas, power and other industries
$3,300.0
2/13/14 SCF Partners Variperm Texas-based provider of sand control solutions, including
downhole completion and production maintenance
services
--
2/11/14 TETRA Technologies,
Inc.
WIT Water Transfer,
LLC
Texas-based provider of water management services for
the Eagle Ford, Permian and Bakken --
2/11/14 Ecoserv/Lariat
Partners
Newpark Resources Acquisition of New Park Resources’ Environmental Services
division which provides low-pressure deep well injection
methodology and waste receiving facilities
$100.0
2/11/14 Phoenix
Services/Quantum
Energy Partners
Super Heaters/
Heat-On-The-Fly
Provider of technology for continuous heating of water
during pressure pumping operations and water heating
services
--
2/10/14 Trinity Industries Platinum Energy
Services
Manufactures and resells oil and gas process and storage
equipment, including separators & treaters, used at
wellsites and midstream locations
--
2/7/14 RBC, Inc. Hy-Bon Engineering/
Pfingsten Partners
Texas-based designer and fabricator of vapor recovery
units --
2/7/14 Engineered Controls,
LLC/Windjammer
Capital
Superior Holding, LLC Ohio-based manufacturer of flow control products used in
the transportation, delivery and storage of LNG --
2/3/14 Sable Environmental
Group
GreenHunter Water Acquisition of saltwater disposal well located in the Eagle
Ford $3.8
4. 4
Sector Update | March 2014
phone 972.831.1300 | web WS-iBank.com
Notable Exploration & Production and Midstream/Downstream Transactions
Announce-
ment Date
Acquiror Target Target/Transaction Description
Transaction
Value ($M)
Exploration & Production and Midstream/Downstream
2/20/14 Breitling Energy
Corp.
Stellar
Energy/Clayton,
Williams Energy
Acquisition of 3,680 acres located in the Permian Basin
that were originally assigned to Stellar Energy from
Clayton, Williams but have been transferred to Breitling
Energy instead
--
2/19/14 Canadian Natural
Resources, Ltd.
Devon Energy Corp. Divestiture of assets for Devon which are located in
Canada and consist of 170 million barrels proved reserves $2,800.0
2/18/14 Diamondback
Energy, Inc.
Undisclosed seller Acquisition of assets located in the Permian Basin that
includes 6,450 gross acres, net production of 1,600 Boe/d,
75% of which is oil, from 145 vertical wells and 4,185
MMBoe of proved reserves
$174.0
2/13/14 STV, Inc. GWD Colorado-based energy services firm that provides design,
engineering, procurement and construction/field services
to the midstream natural gas processing market
--
2/13/14 Rice Energy, Inc. M3 Appalachia
Gathering, LLC
Acquisition of gathering assets located in eastern
Washington and Pennsylvania that consist of a 28-mile
gathering system with rights to construct an addition 18-
mile system with an aggregate capacity of over 1 Bcf/d
$110.0
2/7/14 Baytex Energy Corp. Aurora Oil and Gas,
Ltd.
Acquisition of Aurora Oil and Gas, which has 22,000 net
acres in the Eagle Ford with 2013 production of 24.6
MBoe/d
$2,600.0
2/6/14 New Source Energy
Partners, LP
CEU Paradigm, LLC Acquisition of properties located Oklahoma that consist of
490 Boep/d, 34% of which is oil $18.8