TriWest’s Source Energy Services reprices $175M IPO

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By Ted Liu

Source Energy Services Ltd. has repriced its proposed initial public offering (IPO), less than three weeks after its announcement to postpone its proposed $300 million IPO and secondary offering.

Source Energy Services Ltd. is now offering 16,666,667 common shares, all from treasury, at $10.50 per share to raise gross proceeds of approximately $175 million. The company has granted to the underwriters an over-allotment option to purchase up to an additional 2.5 million common Shares at the offering price.

The Toronto Stock Exchange (TSX) has conditionally approved the listing of Source Energy Services’ shares under the symbol “SHLE”.

Source Energy Services will have 54,116,869 shares outstanding on fully diluted basis (including full exercise of over-allotment option), valuing the company at $568.2 million.

On March 21, Source Energy Services said it was postponing the IPO due to current adverse capital market conditions. It had intended to raise up to $300 million by way of a treasury offering of $275 million and a secondary offering of $25 million by selling shareholders at a price between $14 and $20 per share. Source Energy Services would had be valued at up to $902 million at $20 per share.

Source Energy Services has been a portfolio company of TriWest Capital Partner IV since October 2013. TriWest will own 16,677,346 shares or 30.81% on fully diluted basis.

The offering is being made through a syndicate of underwriters co-led and joint bookrun by Scotiabank, Morgan Stanley Canada Limited and BMO Capital Markets and includes CIBC Capital Markets, Goldman Sachs Canada Inc., Raymond James Ltd., RBC Capital Markets, Canaccord Genuity Corp., Altacorp Capital Inc., Cowen and Company, GMP FirstEnergy and Peters & Co. Ltd.,

Stikeman Elliott LLP and Blake, Cassels & Graydon LLP act as legal counsel to Source Energy Services and the underwriters respectively.

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photo credit: Source Energy Services