Secure Energy Services Inc. Announces Closing of Strategic Acquisition of
Frontline Integrated Services Ltd.
CALGARY, ALBERTA -- (Marketwire) -- 04/01/13 -- Secure Energy
Services Inc. ("Secure" or the "Corporation") (TSX:SES) is pleased to
announce that today it completed the acquisition of Frontline
Integrated Services Ltd. ("Frontline") for an aggregate purchase
price of approximately $23.1 million including the issuance of $16.3
million in common shares of Secure (being 1,394,616 common shares)
(the "Acquisition"). Frontline generated approximately $27.0 million
in revenue and $4.8 million of normalized EBITDA for the trailing
twelve month period ended December 31, 2012.
Summary of the Acquisition
Frontline is an integrated service provider servicing the energy,
resource, and civil construction industries in Western Canada. Their
core services include pipeline integrity (including inspection,
excavation, repair, replacement and rehabilitation); remediation and
reclamation; demolition and decommissioning. Since formation in 2011,
Frontline has realized significant growth and market penetration by
consistently providing high quality, innovative, and cost effective
integrated solutions with a focus on safety and customer service.
Frontline's leadership team has combined experience of over 100 years
in the energy and environmental services field. Frontline's
management team is led by David Mattinson as President; Mr. Mattinson
is a professional engineer with over 30 years of industry experience.
He is a former shareholder of a very successful Calgary-based
environmental contracting business which offered services such as
industrial landfills, waste management and disposal, demolition and
The management team of Frontline will continue to operate the
day-to-day business as a wholly-owned subsidiary of Secure. All
members of the management team and select employees of Frontline will
enter into non-competition agreements. In addition, the common shares
of Secure issued to the five majority owners as consideration will be
held in escrow for five years with 20% to be released on each
anniversary of the closing date.
The Frontline acquisition is a continuation of Secure's strategy to
add complementary services along
the energy services value chain; it
will support and expand the existing environmental and project
management services of the Corporation's drilling services ("DS")
division, which operates under the trade name of Marquis Alliance
Energy Group Inc. ("Marquis Alliance"). Going forward, all of
Frontline's customers will now have the ability to receive an
integrated service solution.
Frontline's business has experienced impressive and rapid growth to
date. Future growth potential will be enhanced with financial,
administrative, operational, and infrastructural support provided by
Secure. The Acquisition is expected to be accretive to Secure on an
earnings and cash flow per share basis.
"The acquisition of Frontline is another exciting addition to Secure
and Marquis Alliance's service and product offerings," states Rene
Amirault, Chairman, President and Chief Executive Officer of Secure.
"We are now able to offer customers an expanded suite of services to
manage environmental liabilities, waste collection, pipeline
protection and maintenance, emergency response support, equipment and
specialty tool rental, and project management. We are pleased to have
a talented, experienced and highly motivated team join Secure and
play a key role in the continued development and execution of
Secure's growth strategy."
David Mattinson, President of Frontline, adds "Frontline has always
set out to be an industry leader by providing high quality,
innovative and cost effective integrated solutions with a focus on
safety and customer service. Secure and Marquis Alliance have
similarly built a strong reputation of being customer focused and
providing innovative solutions in the waste disposal and drilling
fluids businesses. Frontline is excited about pursuing new growth
opportunities and leveraging our combined strengths to meet our
About Secure Energy Services Inc.
Secure is a TSX publicly traded energy services company that focuses
on providing specialized services to upstream oil and natural gas
The Corporation operates two divisions:
Processing, Recovery and Disposal Division: Operating under the trade
name Secure Energy Services, the processing, recovery and disposal
services division focuses on clean oil terminalling, custom treating
of crude oil, crude oil marketing, produced and waste water disposal,
oilfield waste processing, landfill disposal and oil purchase/resale
Drilling Services Division: Operating under the trade name Marquis
Alliance Energy Group Inc. and its wholly owned subsidiaries and
operating under the trade name XL Fluids Systems Inc. ("XL Fluids")
and under the trade name Imperial Drilling Fluids Engineering Inc.
("IDF"), the drilling services division focuses on drilling fluid
systems, solids control, equipment rental service, drilling waste
management and environmental services. The drilling fluids service
line includes the design and implementation of drilling fluid systems
for producers drilling for oil, bitumen and natural gas.
Non GAAP Measures
This press release contains references to normalized EBITDA. This
financial measure is not a measure that has any standardized meaning
prescribed by Generally Accepted Accounting Principles ("GAAP") in
Canada and is therefore referred to as non-GAAP measure. The non-GAAP
measure used by the Corporation may not be comparable to a similar
measure used by other companies. Management believes that in addition
to net income, EBITDA is a useful supplemental measure as it provides
an indication of the financial results generated by the principal
business activities of the relevant company prior to consideration of
how those activities are financed or how the results are taxed.
Normalized EBITDA, as it is used in relation to Frontline, is defined
as earnings before interest expense, income taxes, depreciation,
amortization, management fees and adjustments that are considered
both non-recurring and market based in nature.
Forward Looking Statements
Statements expressed in, or implied by this press release contain
forward-looking statements, including statements regarding the
anticipated synergies arising from completion of the Acquisition.
Readers are cautioned that assumptions used in the preparation of
such information may prove to be incorrect. Events or circumstances
may cause actual results to differ materially from those predicted,
as a result of numerous unknown risks, uncertainties, and other
factors, many of which are beyond the control of Secure. These risks
include, but are not limited to the risks identified in Secure's
Annual Information Form for the year ended December 31, 2012 under
the heading "Risk Factors" and in Secure's Management Discussion and
Analysis for the year ended December 31, 2012 under the heading
"Business Risks" and also includes the risks associated with the
possible failure to realize the anticipated synergies in integrating
the operations of Frontline with the operations of Secure; the risks
associated with the oil and gas industry; commodity prices and
exchange rate changes, regulatory changes, changes in drilling
activity and general global economic, political and business
conditions. Industry related risks could include, but are not lim
to: operational risks, delays or changes in plans, health and safety
risks and the uncertainty of estimates and projections of costs and
expenses and access to capital. The risks outlined above should not
be construed as exhaustive. The reader is cautioned not to place
undue reliance on this forward-looking information. These
forward-looking statements are made as of the date of this press
release and Secure disclaims any intent or obligation to update
publicly any forward-looking information, whether as a result of new
information, future events or results or otherwise, other than as
required by applicable securities law.
The Toronto Stock Exchange has not reviewed, nor does it accept
responsibility for the adequacy or accuracy of this release.
Secure Energy Services Inc.
Chairman, President and Chief Executive Officer
(403) 984-6101 (FAX)
Secure Energy Services Inc.
Chief Financial Officer
(403) 984-6101 (FAX)
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