National Energy Services Reunited Corp. Finalizes Agreement to Close Acquisition of SAPESCO

HOUSTON, TX / ACCESSWIRE / June 2, 2020 / National Energy Services Reunited Corp. ("NESR" or the "Company") (NASDAQ:NESR)(NASDAQ:NESRW), a national, industry-leading provider of integrated energy services in the Middle East and North Africa ("MENA") and Asia Pacific, announced a final agreement pursuant to which NESR will acquire Sahara Petroleum Services Company S.A.E. ("SAPESCO"), the largest indigenous oilfield services company in Egypt with operations across the MENA region.

The transaction, effective June 1, 2020, will result in NESR becoming a significant player in the Egyptian oil and gas industry, where it does not presently operate. This transaction will also add Industrial and Chemical Services, which service the midstream and downstream sectors, to its portfolio. Furthermore, SAPESCO's existing upstream services contracts in Saudi Arabia, the UAE, Libya and Kuwait will be accretive to NESR's contract portfolio.

Under the terms of the agreement, NESR will acquire all issued and outstanding shares of SAPESCO in a cash and stock transaction comprised of $11 million paid at closing and an additional $10 million paid in five equal installments by year-end, for a total cash consideration of $21 million, and the issuance of 2,237,000 NESR shares based on a $10.00 per share conversion rate. The agreement also includes a final earnout of up to $3 million in cash and provision of additional shares at year-end based on collection of certain receivables. No additional shares will be issued as final earnout if the NESR share price is equal to or exceeds $9 per share.

Following closing of the transaction, NESR will settle $11 million of SAPESCO's long-term debt and will assume the remaining $10 million of long-term debt and approximately $8 million of short-term debt from an existing local credit facility. The total cash payment will be funded from NESR's balance sheet and NESR's existing revolving credit facility. Final regulatory approval for the share transfer is expected to be completed before June 30, 2020; however, NESR has assumed control of SAPESCO effective June 1, 2020.

Mr. Akmal Kortam, owner and founder of SAPESCO, commented, "I am very pleased to see the finalization and closure of our agreement, and we look forward to joining NESR, especially in the current macro environment where a larger platform and scale will become doubly critical to maximize the potential of the market." Mr. Kortam added, "We have been an industry leader and the first to enter the oilfield services market in the region, and I am glad to be combining with NESR to continue growing SAPESCO and its business lines across the region and beyond."

"We are very happy to come to a successful closure of this transaction, and we see our combined forces as a strength in Egypt and beyond," said Sherif Foda, Chairman and CEO of NESR. "This transaction provides NESR with an additional business line to access significant downstream opportunities in the region, as well as a platform to build upon in the future in this evolving space. Also, I am glad to report that this transaction, not including the substantial potential integration synergies, is financially accretive on day one and we are already working on multiple contract awards across the region."

About National Energy Services Reunited Corp.

Founded in 2017, NESR is one of the largest national oilfield services providers in the MENA and Asia Pacific regions. With over 4,500 employees, representing more than 60 nationalities in over 15 countries, the Company helps its customers unlock the full potential of their reservoirs by providing Production Services such as Cementing, Coiled Tubing, Filtration, Completions, Stimulation, Pumping and Nitrogen Services. The Company also helps its customers to access their reservoirs in a smarter, more efficient manner by providing Drilling and Evaluation Services such as Drilling Downhole Tools, Directional Drilling, Fishing Tools, Testing Services, Wireline, Slickline, Fluids and Rig Services.

About Sahara Petroleum Services Company S.A.E.

With over forty-five years of experience, SAPESCO is an indigenous Egyptian multi-discipline oil field solutions provider with operations across Egypt, Libya, Saudi Arabia, Kuwait and the UAE and is considered the first national oilfield services company in the region. SAPESCO provides a myriad of cutting-edge solutions across the upstream, midstream and downstream oil and gas industry through its Well Services, Measurement Services, Industrial Services, Civil Services, Drilling Services and Exploration Services divisions that cater to the growing demands of the industry in the region.

Advisors

Freshfields Bruckhaus Deringer LLP and Matouk Bassiouny served as legal advisors and PricewaterhouseCoopers served as financial advisors to NESR. AMR & Partners Law Firm served as legal advisors to SAPESCO.

Forward-Looking Statements

This communication contains forward-looking statements (as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). Any and all statements contained in this communication that are not statements of historical fact may be deemed forward-looking statements. Terms such as "may," "might," "would," "should," "could," "project," "estimate," "predict," "potential," "strategy," "anticipate," "attempt," "develop," "plan," "help," "believe," "continue," "intend," "expect," "future," and terms of similar import (including the negative of any of these terms) may identify forward-looking statements. However, not all forward-looking statements may contain one or more of these identifying terms. Forward-looking statements in this communication may include, without limitation, statements regarding the benefits resulting from the Company's recent business combination transaction, the plans and objectives of management for future operations, projections of income or loss, earnings or loss per share, capital expenditures, dividends, capital structure or other financial items, the Company's future financial performance, expansion plans and opportunities, and the assumptions underlying or relating to any such statement.

The forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be realized because they are based upon the Company's current projections, plans, objectives, beliefs, expectations, estimates and assumptions and are subject to a number of risks and uncertainties and other influences, many of which the Company has no control over. Actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of these risks and uncertainties. Factors that may influence or contribute to the accuracy of the forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation: the ability to recognize the anticipated benefits of the Company's recent business combination transaction, which may be affected by, among other things, the price of oil, natural gas, natural gas liquids, competition, the Company's ability to integrate the businesses acquired and the ability of the combined business to grow and manage growth profitably; integration costs related to the Company's recent business combination; estimates of the Company's future revenue, expenses, capital requirements and the Company's need for financing; the risk of legal complaints and proceedings and government investigations; the Company's financial performance; success in retaining or recruiting, or changes required in, the Company's officers, key employees or directors; current and future government regulations; developments relating to the Company's competitors; changes in applicable laws or regulations; the possibility that the Company may be adversely affected by other economic and market conditions, political disturbances, war, terrorist acts, international currency fluctuations, business and/or competitive factors; risks stemming from COVID-19; and other risks and uncertainties set forth in the Company's most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission (the "SEC").

You are cautioned not to place undue reliance on forward-looking statements because of the risks and uncertainties related to them and to the risk factors. The Company disclaims any obligation to update the forward-looking statements contained in this communication to reflect any new information or future events or circumstances or otherwise, except as required by law. You should read this communication in conjunction with other documents which the Company may file or furnish from time to time with the SEC.

For inquiries regarding NESR, please contact:

Christopher Boone or Dhiraj Dudeja
National Energy Services Reunited Corp.
832-925-3777
investors@nesr.com

SOURCE: National Energy Services Reunited Corp. via EQS Newswire