SECURE ENERGY SERVICES INC. Announcement Of Share Repurchase Transaction And
Substantial Issuer Bid
Our Conclusion
SECURE’s $250MM substantial issuer bid (SIB) and $150MM repurchase of
shares from an affiliate of TPG Angelo Gordon ($400MM total) will result in
SECURE retiring up to ~13% of its outstanding shares over the next month.
While the SIB was largely signalled by management and, therefore, expected
for the past few months, we expect the stock is likely to perform favorably
today as a result of this announcement. SECURE trades at a 2024E
EV/EBITDA multiple of 7.0x, versus waste management peers at 11.0x.
Key Points
Share repurchase transaction will reduce TPG Angelo Gordon
ownership to below 15%: The company announced it has entered into an
agreement with an affiliate of TPG Angelo Gordon to purchase 13.2MM of its
shares at a price of $11.38/share for gross proceeds of $150MM. This will
reduce TPG Angelo Gordon ownership to ~39.3MM or 14.96% post
repurchase.
Terms of substantial issuer bid announced for up to $250MM in share
repurchases: SECURE announced that the SIB will proceed by way of a
modified Dutch auction. The modified Dutch auction procedure will have a
tender price range from $11.40/share to $13.00/share at an increment of
$0.05/share, suggesting an average premium of 5% to the April 26 closing
price (range of -2% to 12%). The offer is expected to commence on May 1,
2024 and will remain open for acceptance until June 5, 2024