Shawcor sells oilfield asset management business in deal worth at least $15M

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TORONTO – On Nov. 18,  Shawcor Ltd.  announced that it has sold its oilfield asset management (OAM) operating unit to Force Inspection Services Inc., in a transaction generating at least C$15 million in gross proceeds.

Shawcor will retain OAM related Western Canadian real-estate assets which it may elect to sell at a future date. As part of the transaction, Shawcor has agreed to lease these properties to Force. The OAM business, reported within the Company’s Composite Systems (CS) segment, is a provider of downhole tubular inspection, repair and inventory management services to the Western Canadian energy market. It generated revenue of approximately C$38.1 million with an adjusted EBITDA of approximately C$5.3 million in the first nine months of 2022. Proceeds from the sale will be used to reduce the Company’s existing indebtedness and fund high-value growth opportunities.

Within Saskatchewan, Shawcor has locations at Regina, Lloydminster and Estevan.

“In September we announced our intent to review strategic alternatives for three operating units, including the Oilfield Asset Management business,” said Mike Reeves, President and CEO of Shawcor. “Executing this sale further demonstrates our continued commitment to simplify our portfolio, lower business volatility and elevate full-cycle margins and free cash flow. I would like to express my gratitude to the employees of OAM for their many contributions to Shawcor and wish them great success under their new ownership.”

With the completion of this transaction, the company’s CS reporting segment now consists of two operating units: the Xerxes® business, which manufactures fiberglass reinforced plastic underground storage tanks primarily for the retail fuel, storm water and wastewater markets; and the FlexPipe™ business, which manufactures flexible fiberglass reinforced composite pipe used for oil and gas gathering and water disposal lines, carbon dioxide injection lines and other applications requiring corrosion resistance and high-pressure capabilities.

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