Business Context and Reporting Period
This Form 8-K Current Report, dated August 31, 2017, details the consummation of a material acquisition by NCS Multistage Holdings, Inc. (the "Company"). The Company is an emerging growth company incorporated in Delaware.
Key Financial Metrics and Transaction Details
The Company acquired 100% of the equity interests in Spectrum Tracer Services, LLC ("Spectrum") on a cash-free, debt-free basis. The total consideration was $80 million, structured as follows:
- Cash Consideration: $73 million.
- Equity Consideration: 0.4 million shares of Company Common Stock issued to certain unitholders ("Rollover Members").
Additionally, the Company amended its Amended and Restated Credit Agreement to increase the loan commitment under its senior secured revolving credit facility (US Facility) from $25.0 million to $50.0 million. The Canadian Facility commitment remained at $25.0 million.
Material Changes
The primary material change is the expansion of the Company's operations through the acquisition of Spectrum, an Oklahoma limited liability company. This transaction was executed via a merger of a wholly-owned subsidiary with and into Spectrum. Concurrently, the Company secured increased liquidity capacity by doubling the size of its US revolving credit facility.
Guidance, Outlook, and Risks
The filing does not provide specific forward-looking guidance, revenue projections, or management commentary regarding future performance beyond the announcement of the transaction. The Company noted that financial statements of the acquired business and pro forma financial information will be filed by amendment within 71 calendar days. The issuance of equity to Rollover Members was made in reliance on an exemption from registration requirements under Section 4(a)(2) of the Securities Act of 1933.
Investor Verification Checklist
- Verify the final purchase price and any working capital adjustments not detailed in this summary.
- Review the upcoming pro forma financial statements (due within 71 days) to assess the impact of the acquisition on the Company's balance sheet and earnings.
- Confirm the terms of the Contribution Agreement regarding the 0.4 million shares issued to Rollover Members.
- Assess the utilization of the newly expanded $50.0 million US credit facility.