Fort Worth oil services firm announces IPO terms

Fort Worth-based FTS International Inc. announced terms for its IPO on Tuesday through a filing with the U.S. Securities and Exchange Commission (SEC).

The company said in a filing with the SEC that it plans to raise $250 million by offering 15.2 million shares at a price range of $15 to $18. At the midpoint of the proposed range, FTS International would have a market value of $1.8 billion.

The shares have been authorized for listing on the New York Stock Exchange under the ticker symbol “FTSI,” subject to official notice of issuance.

The company said in the filing that it has seen increased demand for its service: “We have 1.6 million total hydraulic horsepower across 32 fleets, with 27 fleets active as of January 8, 2018. We are experiencing a surge in demand for our services, which has led us to reactivate 10 fleets since the beginning of 2017. Based on continued requests from customers for additional fleets, we are in the process of reactivating additional equipment at our in-house manufacturing facility. We believe we can reactivate all of our idle equipment for approximately $34 million, allowing us to further increase our operating fleets by five fleets, or approximately 19%, over the next nine months.”

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In the filing, the company reported $1.2 billion in sales for the 12 months ended Sept. 30, 2017.

FTS International is one of the largest providers of hydraulic fracturing services in North America. The company’s services enhance hydrocarbon flow from oil and natural gas wells drilled by exploration and production, or E&P, companies in shale and other unconventional resource formations. According to the filing, customers include Chesapeake Energy, ConocoPhillips, Devon Energy, EOG Resources, Diamondback Energy, EQT, Range Resources and other companies that specialize in unconventional oil and natural gas resources in North America. In the filing, FTS said fourth quarter 2017 revenues are expected to be approximately $459 million.

FTS is active in five of the most active major unconventional basins in the United States: the Permian Basin, the SCOOP/STACK Formation, the Marcellus/Utica Shale, the Eagle Ford Shale and the Haynesville Shale.

The company intends to use the net proceeds from this offering for general corporate purposes, which will include repaying indebtedness. Along with its headquarters at 777 Main in Fort Worth, the company has a manufacturing plant on the city’s west side.

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Credit Suisse and Morgan Stanley are acting as the book-running managers. Wells Fargo Securities; Barclays; Citigroup; and Evercore ISI are also acting as book-runners. Guggenheim Securities; Simmons & Company International, Energy Specialists of Piper Jaffray; Tudor, Pickering, Holt & Co.; and Cowen are acting as co-managers.

FTS was originally founded as Frac-Tech in Cisco by Dan and Farris Wilks in 2002 just as the fracking and horizontal drilling was growing in Texas and eventually around the country.

In 2011, the company was acquired by a group of investors led by Temasek Holdings, a Singapore-based sovereign wealth fund. Chesapeake Energy also has a stake in the company. Upon the recapitalization of the company’s convertible preferred stock into common stock and the completion of this offering, Maju, Chesapeake and Senja will beneficially own approximately 39.1%, 24.8% and 11.2%, respectively, Maju is an indirect wholly owned subsidiary of Temasek Holdings..

Maju Investments Pte Ltd, CHK Energy Holdings Inc., or Chesapeake, and Senja Capital Ltd, will continue to exercise significant influence over the company and matters requiring stockholder approval, according to the filing.

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The registration statement may be obtained free of charge at the SEC’s website at www.sec.gov under “FTS International, Inc.”

The underwriters for the offering are Credit Suisse, Morgan Stanley, Barclays, Citigroup, Wells Fargo Securities, Evercore ISI, Cowen, Guggenheim, Simmons, as well as Tudor, Pickering, Holt.