- Acquisition increases scale, profitability and contract coverage in Civeo’s US market segment
- Civeo expects asset to generate revenues of $7 million and gross profit of $6 million for the remainder of 2018 supported by an existing contract with a large petrochemical customer
- Existing site infrastructure and land could support expansion of an additional 400 rooms
HOUSTON, March 01, 2018 - Civeo Corporation ("Civeo" or the "Company") (NYSE:CVEO), one of the largest global providers of workforce accommodations, logistics and facility management services to the natural resource industry, announced today that it has completed the acquisition of a 400 room accommodations facility on 40 acres of land located near Lake Charles, Louisiana from a private seller. The facility is strategically positioned to support the planned construction of several petrochemical and LNG projects anticipated along the U.S. Gulf Coast. The asset is currently under contract with a large petrochemical company, providing contracted revenue visibility through mid-2019.
Under the terms of the purchase agreement, total consideration for the transaction is $28 million, composed of $23.5 million of cash and $4.5 million of Civeo common equity issued to the seller. The agreement also includes an earnout up to $4 million of Civeo common equity (based on current market prices) dependent on further contracted revenues through December 2020. For the ten months remaining in 2018, the facility is expected to generate approximately $7 million in revenue and $6 million in gross profit.
Bradley J. Dodson, Civeo’s President and Chief Executive Officer, commented “This acquisition strengthens our presence in the U.S. by diversifying our end market exposure to the downstream sector in the Gulf Coast. Similar to our previously announced Noralta acquisition, this acquisition provides additional topline visibility through an established customer contract.”
The acquisition includes the 400 room facility on 40 acres providing the necessary room for expansion, if needed. The facility is currently over 90% occupied.
Civeo Corporation is a leading provider of workforce accommodations with prominent market positions in the Canadian oil sands and the Australian natural resource regions. Civeo offers comprehensive solutions for housing hundreds or thousands of workers with its long-term and temporary accommodations and provides catering, facility management, water systems and logistics services. Civeo currently owns a total of 19 lodges and villages in operation in Canada and Australia, with an aggregate of more than 24,000 rooms. Civeo is publicly traded under the symbol CVEO on the New York Stock Exchange. For more information, please visit Civeo's website at www.civeo.com.