HOUSTON - Forum Energy Technologies, Inc. (NYSE: FET), a global manufacturing company serving various energy sectors, has announced the finalization of a private offering of $100 million in senior secured bonds. The bonds, carrying an interest rate of 10.5%, are slated to mature in November 2029 and will be issued at par value. The closing of the offering is anticipated on November 7, 2024, subject to standard closing conditions.
The company plans to use the net proceeds from the offering, along with available cash, to redeem all of its outstanding 9.000% Convertible Senior Secured Notes due in 2025 and to repay all borrowings under the seller term loan associated with the acquisition of Variperm Energy Services.
The offering of these securities has not been registered under the Securities Act of 1933, as amended, or any state securities laws. Consequently, the bonds may not be offered or sold within the United States or to U.S. persons unless they are registered or exempt from registration requirements. The sale is being conducted as a private placement under U.S. securities laws to qualified institutional buyers within the United States and to non-U.S. persons outside the United States in compliance with Regulation S under the Securities Act.
This press release does not serve as a redemption notice for the 2025 Notes or a repayment notice for the Seller Term Loan. Additionally, it is not an offer to sell or a solicitation of an offer to buy any securities, nor will there be any sales in states where such offer, solicitation, or sale would be unlawful.
Forum Energy Technologies is headquartered in Houston, Texas, and provides equipment and services designed to enhance safety, efficiency, and environmental stewardship in the oil, natural gas, industrial, and renewable energy industries.
The information in this article is based on a press release statement from Forum Energy Technologies, Inc.
In other recent news, Forum Energy Technologies (FET) has announced a private offering of $100 million in senior secured bonds. This strategic move aims to manage the company's debt by redeeming all outstanding 9.000% Convertible Senior Secured Notes due in 2025 and repaying borrowings related to the acquisition of Variperm Energy Services. The offering is backstopped, indicating a party has been arranged to purchase any unsubscribed shares.
FET has also reported a robust second quarter in 2024, with free cash flow surpassing expectations and leading to an upward revision of their full-year guidance. The company is making strides in improving its balance sheet by redeeming a substantial portion of its 2025 notes.
Analysts from Neal Lux have discussed potential revenue synergies from recent acquisitions, while Lyle Williams expressed optimism about the Middle East and offshore markets. These developments are part of FET's recent activities, focusing on streamlining its financial structure and reducing higher-interest debt.
InvestingPro Insights
Forum Energy Technologies' recent $100 million bond offering comes at a time when the company's financial metrics paint an interesting picture. According to InvestingPro data, FET's market capitalization stands at $175.29 million, suggesting that this new debt issuance is significant relative to the company's size.
The company's revenue for the last twelve months as of Q2 2024 was $772.06 million, with a quarterly revenue growth of 10.66% in Q2 2024. This growth trajectory aligns with FET's strategy to refinance existing debt and potentially invest in future operations.
An InvestingPro Tip highlights that FET's revenue growth has been accelerating, which could be a positive sign for investors considering the new bond offering. This acceleration might indicate improving market conditions or successful business strategies, potentially supporting the company's ability to service the new debt.
Another relevant InvestingPro Tip notes that FET is trading at a low Price to Book ratio of 0.4. This could suggest that the stock is undervalued relative to its assets, which might be of interest to value-oriented investors looking at the company's long-term prospects.
It's worth noting that InvestingPro offers additional tips for FET, providing a more comprehensive analysis for those interested in deeper insights into the company's financial health and market position.
The new bond offering's 10.5% interest rate is notable when compared to FET's financial performance. With an EBITDA of $74.23 million for the last twelve months as of Q2 2024 and an EBITDA growth of 27.7%, the company appears to be improving its operational efficiency, which could help in managing the new debt obligations.
For investors and analysts following FET, the next earnings date is set for November 1, 2024, which may provide further clarity on how the company plans to leverage this new financing to drive growth and improve its financial position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.