Forum Energy (FET) Announces Stake Sale In Ashtead Technology
Zacks Investment Research | Aug 21, 2019 11:59PM ET
Of late, Forum Energy Technology (NYSE:FET) announced that it will sell its 40% stake in Ashtead (LON:AHT) Technology, a subsea technology service company. Per the agreement, Forum Energy will be offloading the interest to Buckthorn Partners and other shareholders, who are holding majority of Ashtead’s equity interests, for a consideration of $47.8 million, which comprises $39 million of cash proceeds plus a loan worth $8.5 million with three-year maturity period.
Last January, Forum acquired Ashtead Technology’s 40% interest in exchange of the company’s subsea rental wing. Meanwhile, Ashtead contributed its engineered measurement solutions and asset management services to Forum Energy’s portfolio, thus creating a joint venture (JV). This combined entity with 19,000 rental fleets worth $139 million and 120 employees became one of the biggest subsea hubs and a rental provider of remotely-operated underwater vehicles (ROV).
In the second quarter, Forum Energy’s revenues sequentially dropped $26 million due to a significant fall in their short-cycle product sales in their completion segment. However, this oilfield services company managed to cut its net debt by $30 million in the first half of 2019, backed by the company’s improvement in free cash flow generation. Notably, Forum Energy generated free cash flow of $18 million, a $3-million increase from the previous reported quarter. The company expects to create more free cash flows in the third quarter.
With Forum Energy’s sale of its Ashtead’s stake, which is expected to be completed by Sep 30, 2019, the company’s net debt will be reduced by a substantial amount.
Forum Energy Technologies, Inc. Price
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