Forum Energy Technologies, which provides products that support the oil and natural gas development and production processes, announced terms for its IPO on Thursday. The Houston, TX-based company plans to raise $300 million by offering 15.8 million shares (20% insider) at a price range of $18 to $20. At $19, Forum Energy Technologies would command a market value of $1.8 billion. Tinicum Capital Partners, a New York-based private equity firm, will purchase up to $50 million in a concurrent private placement.
In 2011, revenue rose 51% to $1.1 billion thanks to the completion of eight acquisitions during the year (organic growth was 23%) and higher drilling activity, spurred by an increase in oil prices. The acquisitions contributed to a 340 basis point improvement to 32% in gross margin and a 590 basis point improvement to 16% in operating margin. Net income for the year was $94 million.
Forum Energy Technologies began as Access Oil Tools in 1985. Houston-based private equity firm SCF Partners acquired the company in May 2005 and reorganized it as Forum Oilfield Technologies. FOT filed for a $345 million IPO in October 2007, but market conditions led it to withdraw in February 2008. In August 2010, SCF Partners combined FOT with four other portfolio companies, creating Forum Energy Technologies. The current deal began in August 2011 with a filing for $300 million. SCF Partners is selling 5% of its stake will hold 59% of shares after the offering.
Forum Energy Technologies, which was founded in 1985, plans to list on the NYSE under the symbol FET. J.P. Morgan, BofA Merrill Lynch, Credit Suisse, Citi and Deutsche Bank are the joint bookrunners on the deal.
