Private Equity – Backed ProPetro Files $345M IPO

New York (February 8, 2017, 3:45 PM EST) — ProPetro Holding Corp., a private equity-backed provider of fracking services to oil and gas companies, on Wednesday filed initial public offering plans to raise up to $345 million under guidance from Latham & Watkins LLP, marking the latest energy issuer to rejoin capital markets.

 

Pricing terms were not disclosed in the offering. Upon completion, ProPetro plans to spend proceeds on repaying debt and buying new hydraulic fracturing — or fracking — units so it can increase business in the oil-rich Permian Basin bordering Texas and New Mexico.

“The Permian Basin is widely regarded as the most prolific oil-producing area in the United States, and we believe we are currently the largest private provider of hydraulic fracturing services in the region by hydraulic horsepower … ,” the company said in its registration statement.

Midland, Texas-based ProPetro primarily serves exploration and production companies, providing equipment and services to Diamondback Energy, Parsley Energy, Pioneer Natural Resource and others. It said no single customer represents more than 20 percent of its revenue. ProPetro recorded $569.6 million in revenue in 2016, though it also lost $45.8 million, according to its filing.

The company lists Energy Capital Partners, a private equity firm that invests in North American energy projects, among its leading shareholders. The filing does not indicate Energy Capital’s stake or whether it plans to sell shares in the IPO.

ProPetro is joining an IPO pipeline that is attracting more energy issuers of late, buoyed by rising oil and gas prices.

Last week, Texas-based Kimbell Royalty Partners LP, an owner of oil and natural gas mineral and royalty interests, raised $90 million in an IPO advised by Baker Botts LLP, while Kentucky coal miner Ramaco Resources Inc. raised $81 million in an offering guided by Vinson & Elkins LLP.

Kimbell priced its IPO at $18 per share, below its $19 to $21 range, while Ramaco priced at $13.50, the middle of its $12 to $15 range.

The recent offerings follow private equity-backed Keane Group Inc., which raised $508 million in an upsized deal last month that represented the year’s first IPO, advised by Schulte Roth & Zabel LLP. The Houston-based company makes wells ready for production for fracking industry clients.

ProPetro plans to list its shares on the New York Stock Exchange under symbol PUMP. The company has hired Goldman Sachs, Barclays, Credit Suisse and JPMorgan as lead underwriters.

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