Kirkland Advises Alamo on Carveout Sale of its Pressure Pumping Business to NexTier for $268 Million Plus Earn-Out
Kirkland & Ellis counseled Alamo on its agreement with NexTier Oilfield Solutions, Inc. (NYSE: NEX), pursuant to which NexTier will acquire Alamo’s pressure pumping business creating one of the largest pressure pumping companies in the Permian Basin. Alamo is receiving $268 million in consideration, consisting of (i) 26 million newly issued NexTier common shares (reflecting an approximately 10.7 percent equity stake in NexTier) worth $100 million, (ii) $100 million in cash, (iii) $38 million of assumed equipment obligations and (iv) $30 million of post-closing services to be provided to Alamo’s retained E&P business. The transaction also includes a potential earn-out measured through year-end 2022, payable in the event Alamo achieves certain annual EBITDA levels in excess of approximately $80 million of annual EBITDA. Alamo will continue to operate its E&P business following the sale, which Alamo E&P business will be entitled to receive oilfield services from the Alamo division of NexTier. Alamo’s CEO and management team will continue to lead the Alamo division of NexTier. The transaction is expected to be completed by Aug. 31, 2021, subject to customary closing conditions and approvals.
The Kirkland team was led by corporate partners Kevin Crews and David Thompson and associate Patrick Moneypenny; and included capital markets partner Matt Pacey and associate Billy Vranish; tax partner David Wheat and associate Ryan Phelps; and executive compensation partner Stephen Jacobson and associate Deidre Kalenderian.
