ACT Energy to buy SB drilling business for $47M (U.S.)
Executive Summary
- ACT Energy Technologies Ltd. announced a definitive agreement to acquire the directional drilling service business of SB Directional Services for total consideration of US$47 million (≈ CA$64.3 million).
- The purchase price consists of US$30 million in cash and 3,624,232 ACT common shares valued at US$17 million, with the transaction expected to close in early April 2026.
- Concurrently, ACT is amending its credit facility, increasing Canadian‑dollar capacity to CA$145 million and U.S.‑dollar availability to US$30 million, providing additional financial flexibility for the acquisition.
Key Details
- Consideration Breakdown
- Cash: US$30.0 million.
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Equity: 3,624,232 ACT common shares (valued at US$17.0 million based on VWAP of the 10 trading days preceding the third business day before signing).
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Financing Structure
- Cash portion funded from existing resources and the expanded credit facility.
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Equity issuance aligns management interests with shareholders.
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Credit Facility Amendment
- Existing syndicated facility increased from CA$125 million to CA$145 million.
- U.S.‑dollar committed facilities raised from US$10 million to US$30 million, comprising:
- $10 million revolving facility.
- New $20 million delayed‑draw term facility (3‑year term, quarterly repayments of $1.67 million).
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Debt‑to‑EBITDA covenant adjusted to 3.00 × (from 2.50 ×); pro‑forma post‑transaction ratio anticipated at 1.20–1.00 ×.
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Synergy & Financial Impact
- Expected payback period of just over 2½ years.
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Anticipated to be accretive to adjusted EBITDA, free cash flow, and net income after accounting for synergies and minimal follow‑on capital investment.
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Escrow Arrangements
- 2,984,662 acquisition shares placed in escrow; 50 % released at 12 and 24 months post‑closing.
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639,570 acquisition shares placed in escrow; 20 % released annually for five years on each anniversary of closing.
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Closing Conditions
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Transaction must close by April 10, 2026 and is subject to Toronto Stock Exchange approval.
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Advisers
- Financial adviser: Peters & Co. Ltd.
- U.S. legal counsel: Porter Hedges LLP.
- Canadian legal counsel (ACT): Prelia Canada LLP (formerly DS Lawyers Canada LLP).
- Legal counsel (seller): Hartzog Conger Cason LLP.
Notable Quotes
- Tom Connors, President & CEO, ACT Energy Technologies:
“We are excited to welcome SB's management team and employees to ACT… The acquisition will generate meaningful margin enhancement by deploying ACT’s growing RSS fleet to replace SB’s rented tools, with a payback in just over 2‑½ years, underscoring the strategic and financial value of this acquisition.”