"An investment in knowledge pays the best interest."

SECURE ENERGY SERVICES INC. ENTERS INTO AGREEMENT TO ACQUIRE CEIBA ENERGY SERVICES INC.

 

Secure Energy Services Inc. and Ceiba Energy Services Inc. (CEB.V) have entered into an arrangement agreement dated May 14, 2017, pursuant to which Secure has agreed to acquire all of the issued and outstanding common shares of Ceiba, a service provider of stand-alone water disposal and oil treating facilities in the Canadian energy sector.

Under the terms of the arrangement agreement, Secure will pay approximately $26-million for all of the issued and outstanding Ceiba shares. Ceiba shareholders will receive 20.5 cents for each share, to be paid in cash or by the issuance of 0.02115 of a Secure common share, at their election, provided that a maximum of approximately 1.3 million Secure common shares will be issued (representing approximately 50 per cent of the consideration to be paid to Ceiba shareholders). The exchange ratio reflects a Secure share price of $9.6912, being Secure's trailing three-trading-day volume-weighted average trading price on the Toronto Stock Exchange. The 20.5-cent-per-share consideration represents a 64-per-cent premium over the closing price of Ceiba shares on the TSX Venture Exchange on May 12, 2017. The aggregate transaction value is approximately $37-million, which includes the assumption of approximately $11-million in Ceiba debt.

As part of the transaction, Secure will acquire approximately $1-million of net working capital excluding debt and approximately $30-million of fixed assets consisting of tanks, pumps, pipelines, treaters, disposal wells and various other equipment.

"Adding Ceiba's stand-alone water disposal and oil-treating facilities to Secure's expansive network of facilities provides our customers with more options for their water, waste and oil-handling needs," said Rene Amirault, Secure's chairman and chief executive officer. "This transaction will add 10 new locations to our existing footprint of 39 facilities in the Western Canadian sedimentary basin. There are numerous opportunities at the Ceiba facilities to optimize and expand existing services and throughput, thereby enhancing customer value."

Ronald Sifton, interim chief executive officer of Ceiba, stated: "We are very pleased with this outcome of our strategic process review. The transaction provides our shareholders the opportunity to participate in the future potential of a well-capitalized leading North American energy services company which has a track record of successful project execution and corporate growth. The combined entity is much better positioned to deploy capital and realize significant operating synergies to maximize the value of Ceiba's operating assets."