Local company hopes to raise $500 million in Initial Public Offering with the Mosing family members retaining 85 percent ownership.
[Editor's Note: This story has been updated with new information about the IPO - that it is now expected to raise $600 million rather than $500 million.]
Frank's Casing Crew, now doing business as Frank's International, will make its final appearance on ABiz's list of the Top 50 Privately Held Companies in Acadiana this year, and once again it will likely be at the top with more than $1 billion in annual revenues. The 75-year-old company specializing in tubular fabrication and installation services to the oil and gas industry plans to offer shares of its stock to the public for the first time.
Photo by Robin May
Frank's International Chairman, President and CEO Keith Mosing and Robert Gilbert, the company's top executive in Lafayette
Keith Mosing, chairman, president and CEO of Frank's International, tells ABiz the IPO could take place as early as July. The company hopes to raise $600 million, with Keith and fellow Mosing family members retaining 85 percent ownership in the company. That means the service company is now worth approximately $4 billion on the public market.
"The Mosing family is still going to retain about 85 percent control, so things really are not going to be affected other than we will have the growth potential with regards to capital," Mosing says.
"The earliest we ring the bell will be in July and the latest will be in October. Everybody goes on vacation in August, so it's not a good time to do it," says Mosing. "The road show will take place as soon as the SEC approves our S-1. They had 30 days to give us their comments, and they gave us their comments, which were very minor ... so we should have that in a couple of weeks."
A public filing to register securities with the U.S. Securities and Exchange Commission, the S-1 contains basic business and financial information about the securities offering. Frank's is applying to list its common stock on the New York Stock Exchange under the symbol "FI."
"It won't be priced until the night before we go public. They don't tell you the price," Mosing explains. "That's something that the underwriters and lead bankers do."
Frank's was founded by Frank Mosing, Keith's grandfather, in 1938, and the fourth generation is just beginning to make its mark on the company, which now operates in 60 countries. Frank's is among the largest global providers of highly engineered tubular services to the oil and gas industry, offering its services to exploration and production companies working offshore and onshore. The company's niche is complex and technically demanding wells.
The company disclosed that it generated $1.06 billion in revenues last year, earning $351 million, more than double the $171 million earned in 2011. Based on prior participation in ABiz's Top 50, those revenues will keep it comfortably at the top of the list that will be published July 15. If all goes as planned, the company will join ABiz's ranking of publicly held companies next year, a list that is also published as part of the annual Top 50 project.
Proceeds from the IPO will be used to pay off $464 million in debt (as of Dec. 31), and any remaining money raised will go toward expansion, Mosing says. "We're hoping to be able to grow the company and do more M&A, more research and development to develop new products and equipment for the industry. We're planning on expanding our manufacturing and expanding the amount of investment we put back in the industry in Lafayette, so that's mainly what it's going to be for," he adds. "It will also give the shareholders security so that we can continue this company for another 75 years."
In its S-1 filing, Frank's notes that it plays a vital role in the process of producing oil and gas because its services are important to the structural integrity, reliability and safety of a well, and can help manage costs.
In addition to its tubular handling equipment, Frank's designs and manufactures products its sells or rents directly to external customers, like casing centralizers and large outside diameter pipe connectors. It also provides specialized fabrication and welding services in support of deep water projects in the U.S. Gulf of Mexico, including drilling and production risers, flowlines and pipeline end terminations and long length tubulars (up to 300 feet) for use as caissons or pilings.
At its Lafayette campus on Verot School Road, headed by Executive Vice President and Chief Operating Officer Robert Gilbert, Frank's already has two major construction projects in the works - an approximately $20 million operations facility on undeveloped land on Beau Pre Road that has already gone out for bid (bids are due in late June) and another 200,000 square foot office building behind its current main facility on Verot. "What we're doing is we're trying to get off Verot School Road," Mosing says of the new operations facility. "So the operations building is going to be on Beau Pre. This is raw land on Beau Pre that we've owned for a couple of years."
Those expansions come on the heels of a big construction project in 2012, which added an 18,000-square-foot facility across from its corporate headquarters on Verot that will eventually triple its repair and inspection operations.
Growing Frank's has its challenges, says Mosing, noting the difficulty in finding skilled workers for the Lafayette manufacturing operations. "We would do more hiring right now if we could hire more people," Mosing says. "Unfortunately, unemployment is very low in Lafayette, so we have a lot of temporary workers that we're getting through agencies now that we would like to have as permanent workers, but we don't have the permits to bring them in from the Philippines and Mexico [and other countries]."
Lead underwriters for the IPO are Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Simmons & Co. International.
Mosing was unable to speak publicly about anything related to the public offering that isn't included in the S-1. To view the S-1, click here.