ProFrac Holding Corp. To Acquire U.S. Well Services, Inc.

Source: 6/21/2022, Location: North America

ProFrac Holding Corp. has reached an agreement to acquire U.S. Well Services, Inc. in a stock-for-stock transaction with an exchange ratio of 0.0561 shares of ProFrac Class A common stock for each share of USWS Class A common stock. The acquisition is expected to be completed in the fourth quarter of 2022, subject to the satisfaction of customary closing conditions, including the approval of USWS stockholders.

The combination creates a market leader in NextGen frac solutions and a combined company with an expected 44 active fleets by the end of 2022:
• Transaction expected to expand ProFrac's fleet to 44 active fleets by year end, including 12 electric fleets, 13 Tier IV dual fuel fleets, and 3 Tier IV diesel fleets
• Combined company expected to be the largest provider of electric frac services with 12 electric fleets
• Accelerates ProFrac's ESG strategy of reducing fuel costs and minimizing its emissions footprint
• Marries leading edge efficiency and cost structure from ProFrac with the largest electric fleet platform in the industry to deliver exceptional value for the combined company and substantial cost savings to customers
• ProFrac would acquire USWS' industry leading intellectual property portfolio that gave rise to electric frac technology with the market's first e-fleet deployment in 2014, which includes over 110 patents
• USWS Convertible Senior Notes and Series A Redeemable Preferred Shares to be converted into shares of ProFrac Class A common stock at closing
• Combined company expected to maintain a conservative balance sheet; ProFrac expects to separately finance remaining USWS debt at closing
• Expected to result in approximately $35 million of annual cost synergies and eliminate ProFrac's expected license fees to USWS of approximately $22.5 million per year over the next four years
• Expected to be accretive to 2023 Adjusted EBITDA

Matt Wilks, ProFrac's Executive Chairman, commented, "The acquisition of U.S. Well Services solidifies ProFrac's position as an industry leader in electric hydraulic fracturing, which we believe represents the future of the industry. In today's environment, we believe electric frac fleets provide improved efficiency, lower R&M costs, greater value, and a lower overall cost of completion to our customer. It is a true win-win scenario for us, our customers, the environment and the communities in which we operate."

Ladd Wilks, ProFrac's Chief Executive Officer, said, "We are excited to welcome the U.S. Well Services team to the ProFrac family. We recognize the hard work of everyone to get to this point and I am excited to join forces and build upon the foundation this team has established. By leveraging our scale and capabilities along with U.S. Well Services' Clean Fleetฎ technology, we intend to make ProFrac THE electric fleet provider in the U.S."

Kyle O'Neill, U.S. Well Services' President and CEO, added, "We are thrilled to join forces with ProFrac. ProFrac is a best-in-class operator, and we believe the combined company will be well positioned to capitalize on the growing opportunity for electric fracturing services. This combination provides value for U.S. Well Services shareholders, employees and customers, and we look forward to working with the ProFrac team to realize our shared vision for the business."

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