Texas Oil Services Companies to Merge

June 11, 2019

 

Houston-based drilling market and frack sand manager SMG Industries, Inc. is buying another Texas oil services company.

SMG said it’s signed a definitive agreement to acquire 100% of the membership interests in Trinity Services LLC, which operates in the East Texas-Louisiana Haynesville play.

Trinity is based in Waskom, just inside Texas west of Shreveport, and is focused on building drilling locations, which includes pad development, pits and lease access roads for oil and gas companies through its fleet of heavy equipment including excavators, tractors, compactors and motor graders.

The buy is expected to double SMG’s current revenue.

Trinity had about $5.4 million in revenues during fiscal year 2018, which the company has said was 80% stronger than 2017, according to SMG.

Terms include issuance of $2 million of 3.0% Series “A” non-redeemable Convertible Preferred Stock to convert into common shares at $0.50 per share, a premium over SMGI’s closing stock price on June 5, 2019 — plus $500,000 in cash at closing from a line of credit plus the assumption of about $850,000 in low interest equipment notes.