ARC Financial’s STEP Energy Services closes $100M IPO

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By Ted Liu

STEP Energy Services Ltd. (TSX: STEP), a portfolio company of ARC Financial Corp., has completed its previously announced initial public offering (IPO) of 10.0 million common shares at a price of $10.00 per common share for gross proceeds to STEP of $100 million.

STEP Energy Services will have 73,622,253 shares on fully-diluted basis, valuing the company at $736 million at the offering price.

STEP Energy Services stock opened at $9.60 and traded at $9.65 as of May 2, 2017, 11:28 AM EDT. (updated: the stock finished the day at $9.95).

The offering was made through a syndicate of underwriters co-led by CIBC Capital Markets and Raymond James Ltd. and including BMO Capital Markets, Peters & Co. Limited, RBC Capital Markets, GMP FirstEnergy, National Bank Financial Inc., Scotiabank and AltaCorp Capital Inc.

Stikeman Elliott LLP and Thompson & Knight LLP acted as Canadian and US legal counsel to STEP while Dentons Canada LLP and Dentons US LLP acted as legal counsels to the underwriters.

ARC Energy Fund 6 and ARC Energy Fund 8 have granted to the Underwriters an over-allotment option, exercisable in whole or in part for a period of 30 days following the closing of the offering, to purchase up to an aggregate of an additional 1.5 million common shares at a price of $10.00 per common share.

Assuming full exercise of over-allotment option, ARC Energy Fund 6 and ARC Energy Fund 8 will continue to own 15,093,506 (25.11%) and 29,606,494 (49.25%) shares respectively, or 20.50% and 40.21% on fully diluted basis.

photo credit: STEP Energy Services