Willbros Group sold for $100M

Primoris to acquire Willbros Group in all-cash transaction

 

Primoris to acquire Willbros Group, Stockwinners.com
Primoris to acquire Willbros Group,

Primoris Services Corporation (PRIM) announced that it has entered into a definitive merger agreement to acquire Willbros Group (WG) in an all-cash transaction.

Primoris will pay 60c per share for all of the outstanding stock of Willbros and will settle all of the existing Willbros debt obligations, for an enterprise value of approximately $100M.

Willbros is a specialty energy infrastructure contractor serving the Oil & Gas and Power industries across its three operating segments: Utility Transmission and Distribution, Oil & Gas, and Canada. Willbros’ infrastructure services platform provides a diverse base of utility, natural gas, and renewable customers with comprehensive engineering, construction, maintenance, repair, and restoration solutions.

Upon completion of the transaction, Primoris expects the Willbros UTD business to become a new operating segment, Primoris UTD, which continues Primoris’ strategic plan for growing its Master Service Agreement revenue base.

Primoris anticipates that Willbros’ Lineal Oil & Gas operations will be incorporated into Primoris’ Utilities & Distribution segment, the Houston-based Oil & Gas facilities operations will become part of Primoris’ Pipeline & Underground segment, and the Canadian business will become part of Primoris’ Power, Industrial, and Engineering segment.

Primoris expects the financial benefits of the transaction to include: For the first 12 months after closing, revenues of approximately $660M, including estimated UTD revenues of $470M, For the first 12 months after closing, EBITDA of $25M, including approximately $7M in annual cost savings, The addition of approximately $400M to Total Backlog, including approximately $300M from the UTD business and within 24-30 months after the closing of the transaction, additional annual cost savings of $7.5 million to $10M.

Under the terms of the merger agreement, which was unanimously approved by the Boards of Directors of both Willbros and Primoris, each stockholder of Willbros will receive 60c per share in cash, without interest, which represents a significant premium to the closing price of Willbros common stock on March 27, 2018.

In addition, Primoris will settle all of the existing Willbros debt obligations. The transaction has an enterprise value of approximately $100M.

Primoris intends to finance the transaction through cash on hand and its existing credit facilities.

As part of the transaction, Primoris has agreed to provide Willbros up to $20M in secured bridge financing to support Willbros’ working capital liquidity needs prior to the transaction close.

The transaction is subject to approval by Willbros stockholders and certain other closing conditions. In connection with the execution of the merger agreement, certain Willbros directors and stockholders, together representing approximately 17% of Willbros’ outstanding shares, have entered into voting agreements with Primoris, whereby such stockholders agreed, among other things, to vote in favor of the adoption of the merger agreement. The transaction is expected to be completed in the second quarter of 2018.


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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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