Forum Energy Technologies Seals Variperm Energy Services Deal: Strategic Expansion in Downhole Technology

Forum Energy Technologies, Inc. (NYSE: FET) has successfully closed its acquisition of Variperm Energy Services, a specialized manufacturer of customized downhole technology solutions focused on sand and flow control products for heavy oil applications. The all-stock and cash transaction valued at $150 million in cash plus 2 million FET common shares marks a significant move in the company’s product portfolio diversification.

Deal Structure and Financing Arrangement

The acquisition was funded through a combination of internal resources and external financing. FET utilized its existing cash reserves, drew upon its ABL credit facility, and secured a $60 million seller-financed term loan. This seller note carries an 11% initial interest rate—subject to increases after the first year—and provides prepayment flexibility without penalties, maturing in December 2026.

The company had previously amended its ABL credit facility in November 2023 to support this transaction, increasing revolving commitments from $179 million to $250 million and extending the facility’s maturity to September 2028. These amendments became effective upon the successful closing of the Variperm Energy Services purchase.

Strategic Rationale and Market Position

Neal Lux, President and CEO of FET, emphasized that the combination strengthens the company’s global reach in downhole and artificial lift solutions. The addition of Variperm Energy Services brings proven expertise in customized technology for sand and flow control in challenging heavy oil environments. The merged operations position FET to leverage complementary product lines and capitalize on synergies across both legacy operations.

Employee Retention Through Equity Awards

FET granted restricted stock unit awards to fourteen Variperm employees as acquisition-related inducements. These parties received 39,000 RSUs collectively, structured to vest fully on the two-year anniversary of closing, contingent upon continued employment. None of the recipients hold executive positions at FET, and the grants were standardized rather than individually negotiated.

Advisory Support

Goldman Sachs & Co. LLC served as FET’s financial advisor, with Gibson, Dunn & Crutcher LLP and Goodmans LLP providing legal counsel. Variperm Energy Services retained TPH&Co. (Perella Weinberg Partners’ energy division) as financial advisor, supported by Vinson & Elkins LLP and Bennett Jones LLP as legal counsel.

Forum Energy Technologies operates globally across oil, natural gas, industrial, and renewable energy sectors from its Houston headquarters, delivering safety-enhancing and efficiency-focused solutions to customers worldwide.