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SECURE Energy Services Inc. completes merger with Tervita Corporation

CALGARY, AB, July 2, 2021 /CNW/ - SECURE Energy Services Inc. ("SECURE") (TSX: SES) and Tervita Corporation ("Tervita") (TSX: TEV) are pleased to announce closing of the merger of the two companies.

The merger was completed through an arrangement agreement previously announced on March 9, 2021 under which SECURE and Tervita agreed to combine in an all-share transaction pursuant to which SECURE acquired all of the issued and outstanding common shares of Tervita ("Tervita Shares") on the basis of 1.2757 common shares of SECURE for each outstanding Tervita Share, following which Tervita amalgamated with SECURE (the "Transaction"). The Tervita Shares are expected to be delisted by the Toronto Stock Exchange ("TSX") at the close of market on July 5, 2021.

The combined company will continue to operate as SECURE Energy Services Inc. and remain listed on the TSX asTSX: SES. As a result of the amalgamation, SECURE is now the obligor under Tervita's outstanding US$500 million aggregate principal amount of 11.000% senior second lien secured notes due 2025 and other direct obligations of Tervita. The combined company will remain headquartered in Calgary, Alberta.

On June 30, 2021, SECURE announced that it has successfully closed its private offering (the "Offering") of $200 million aggregate principal amount of 7.25% senior unsecured notes due December 30, 2026. SECURE intends to use the net proceeds of the Offering: (i) to fund the redemption of approximately US$100 million of the US$500 million aggregate principal amount of 11.000% senior second lien secured notes of Tervita due 2025 (the "Tervita Notes"), at a redemption price of 105.500%, plus accrued and unpaid interest to, but not including, the redemption date; (ii) to repay outstanding indebtedness; and (iii) any remaining net proceeds from the Offering will be used to pay fees and expenses incurred in connection with the Offering and for general corporate purposes.

In connection with the closing of the Transaction, SECURE entered into an $800 million three-year credit facility (the "SECURE Credit Facility") with nine financial institutions and Chartered Banks. The SECURE Credit Facility is being used to replace and repay SECURE's existing first and second lien credit facilities and Tervita's first lien credit facility. Tervita's second lien notes will remain outstanding and enable capital structure optimization while maintaining adequate liquidity.

SECURE is also pleased to announce that it entered into a $30 million unsecured letter of credit facility guaranteed by Export Development Canada (the "LC Facility"), providing additional stability and capacity to the company's capital structure. SECURE had issued letters of credit in the amount of approximately $37 million at March 31, 2021. Any letters of credit issued above the capacity of the LC Facility are expected to reduce the amount available to be drawn under the SECURE Credit Facility.

The statutory waiting period for the completion of the Transaction under the Competition Act expired on June 30, 2021. SECURE is aware that the Commissioner of Competition made an application on June 29, 2021 to prevent closing of the Transaction. That application was denied by the Competition Tribunal and subsequently by the Federal Court of Appeal. SECURE has reviewed the remainder of the application and will continue to work cooperatively with the Competition Bureau and the Competition Tribunal to resolve any concerns relating to the Transaction, which it understands relate to certain waste disposal assets. SECURE believes the resolution of such proceedings will not be material to the combined company's asset base or EBITDA.

The combined company is expected to deliver:

  • Highly complementary mid-stream infrastructure asset bases and environmental service lines provide for enhanced scale, utilization, efficiencies and expanded services for the combined company's customers;
  • Significant estimated annual integration cost savings of $75 million are expected to be realizable within 12 to 18 months after closing, with an additional $5 million in interest savings following the partial redemption of Tervita Notes using a portion of the proceeds of the Offering;
  • Results that are immediately accretive to cash flow from operations and discretionary free cash flow per share for all shareholders of the combined company;
  • Significantly improved cost structure to serve a growing and consolidating customer base through the full business cycle;
  • Strong pro forma financial position with attractive discretionary free cash flow generation expected to reduce debt and help achieve the combined company's target debt to earnings before interest, taxes, depreciation and amortization ratio of less than 2.5 times, which is expected to be achieved within two years of closing;
  • A combination of two strong corporate cultures driven by highly talented teams with shared commitments to environmental, social and governance, safety, performance, customer service and profitability; and
  • An elevated position to advance and deliver on environmental and social sustainability initiatives for the combined company and its customers.

John Cooper, former President and Chief Executive Officer of Tervita Corporation, stated, "We are delighted to complete the merger with SECURE, and wish to thank all of our shareholders, employees and stakeholders for their support."

Rene Amirault, President and Chief Executive Officer of SECURE, stated: "We are pleased to now have closed this important transaction combining these two great companies, resulting in the creation of a larger-scale midstream infrastructure and environmental solutions business. Together, our highly talented teams will be better positioned to serve our customers, optimize existing infrastructure assets and operations and to drive greater discretionary free cash flow to the bottom line. We look forward to working with the new SECURE board of directors and newly amalgamated team, and we are excited about the value-creation opportunities of this transaction for all stakeholders."

Peters & Co. Ltd. and BMO Capital Markets acted as financial advisers to SECURE.  Bennett Jones LLP and Blake, Cassels & Graydon LLP (Competition) are acting as SECURE's legal advisers.


SECURE is a publicly traded energy business listed on the TSX providing industry leading customer solutions to upstream oil and natural gas companies operating in western Canada and certain regions in the United States through its network of midstream processing and storage facilities, crude oil and water pipelines, and crude by rail terminals located throughout key resource plays in western Canada, North Dakota and Oklahoma. SECURE's core midstream infrastructure operations generate cash flows from oil production processing and disposal, produced water disposal, and crude oil storage, logistics, and marketing. SECURE also provides comprehensive environmental and fluid management for landfill disposal, onsite abandonment, remediation and reclamation, drilling, completion and production operations for oil and gas producers in western Canada. SECURE trades on the TSX as SES. For more information, visit

Forward-Looking Statements

Certain statements contained in this press release constitute "forward-looking statements" and/or "forward-looking information" within the meaning of applicable securities laws (collectively referred to as "forward-looking statements"). When used in this press release, the words "achieve", "anticipate", "expect", "intend", "continue", "remain", "permit", "target" and "will", and similar expressions, as they relate to SECURE or the combined company, or their respective management, are intended to identify forward-looking statements. Such statements reflect the current views of SECURE with respect to future events and operating performance and speak only as of the date of this press release.

In particular, this press release contains or implies forward-looking statements pertaining to: the delisting of Tervita Shares by the TSX; characteristics of the combined company including its name, trading symbol, and headquarters; the use of proceeds of the Offering; the use of the SECURE Credit Facility; the effect of letters of credit being issued above the capacity of the LC Facility; ongoing cooperation with the Competition Bureau and Competition Tribunal; the resolution of any proceedings under the Competition Act and the materiality thereof; the expected benefits of the Transaction and the combined company; expectations with respect to the strength and financial flexibility of the combined company; and debt repayment plans.

Forward-looking statements involve significant known and unknown risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether such results will be achieved. Readers are cautioned not to place undue reliance on these statements as a number of factors could cause actual results to differ materially from the results discussed in these forward-looking statements, including but not limited to those factors referred to under the heading "Risk Factors" in SECURE's Annual Information Form for the year ended December 31, 2020, and the joint information circular of SECURE and Tervita dated May 6, 2021, each of which is available on SEDAR at

Although forward-looking statements contained in this press release are based upon what SECURE believes are reasonable assumptions, SECURE cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements in this press release are expressly qualified by this cautionary statement. Unless otherwise required by law, SECURE does not intend, or assume any obligation, to update these forward-looking statements.

SOURCE SECURE Energy Services Inc.

For further information: Rene Amirault, Chairman, President and Chief Executive Officer, Phone: (403) 984-6100, Fax: (403) 984-6101; Allen Gransch, Chief Operating Officer, Phone: (403) 984-6100, Fax: (403) 984-6101; Chad Magus, Chief Financial Officer, Phone: (403) 984-6100, Fax: (403) 984-6101