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ENSERVCO announces acquisition of Adler Hot Oil Service

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Dion Global

30 Oct 2018

ENSERVCO Corporation, a diversified national provider of specialized well-site services to the domestic onshore conventional and unconventional oil and gas industries, today announced it has acquired all the outstanding ownership interests of privately-held Adler Hot Oil Service, LLC from Adler Hot Oil Holdings, LLC.

Under terms of the USD 12.5 million transaction, ENSERVCO paid the Seller USD 3.7 million in cash at closing with an additional USD 4.8 million due in a seller’s note due March 31, 2019. There is a USD 1.0 million indemnity holdback (held by ENSERVCO, not in escrow) and the Seller can receive an additional USD 1.0 million from an earn-out provision based on combined-company EBITDA performance in calendar 2019. In addition, ENSERVCO retired Adler’s USD 2.0 million outstanding debt balance.

“The acquisition of Adler Hot Oil Services has a number of strategic benefits for ENSERVCO,” said Ian Dickinson, CEO of ENSERVCO. “With 62% of Adler’s 2017 revenue in the Bakken shale, we accelerate the Northern expansion into colder climates that we had planned on pursuing organically over the next year. Additionally, in acquiring one of our largest competitors, we expand our leadership position in frac water heating and hot oiling in our key basins and enhance our ability to manage projects of any size and scope in any geography. Adler has an excellent reputation among E&Ps and enjoys an outstanding safety track record, solid field teams and sales personnel.

“This transaction yields valuable financial benefits as well,” Dickinson added. “In addition to significantly expanding our revenue base and being accretive to earnings, it results in an improvement to our debt to EBITDA ratio on a pro forma basis. And because Adler offers primarily frac water heating and hot oiling services, we are well positioned to cross market and bundle ENSERVCO’s acidizing and water transfer services to the Adler customer base. We also expect to achieve some cost efficiencies as we progress through the integration process.”

Dickinson added that both ENSERVCO and Adler are off to a fast start to the heating season, with both companies having more customer commitments going into the fourth quarter than in the prior year.

ENSERVCO also announced that, following an extensive review of all operations, the Company is implementing a series of measures to reduce cash burn from non-strategic operations in order to focus on its core growth businesses.