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ACQUISITION | 6 Months Ended
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Jun. 30, 2025
ACQUISITION |
ACQUISITION | 3. ACQUISITION On April 1, 2025 (the “Closing Date”), RPC, through its wholly owned subsidiary, Thru Tubing Solutions, Inc., completed its previously announced acquisition of Pintail Alternative Energy, L.L.C (“Pintail”). Pursuant to the terms of the Membership Interest Purchase Agreement dated as of April 1, 2025 (the “Merger Agreement”), by and among RPC and Pintail, on the Closing Date, Pintail merged with and into RPC (the “Merger”), and Pintail continued as a wholly owned subsidiary of RPC. Pintail, headquartered in Midland, Texas, is a leading provider of oilfield wireline perforating services in the Permian Basin. Pintail operates more than 30 active fleets, and its conventional and electric wireline units are among the newest in the industry. The acquisition will build on RPC’s diversified oilfield services platform with geographic concentration in the most active oil producing region in the U.S. land market. Pintail is included in our Technical Services Segment. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, on the Closing Date, 100% of Pintail’s equity was automatically canceled and converted into the right to receive (i) $170 million in cash, without interest (“the Closing Cash”), (ii) $25 million of RPC common stock, which was paid by the issuance of 4,545,454 shares of restricted common stock of RPC (“Stock Consideration”) to one of the previous owners (the “Seller”), and (iii) $50 million in the form of a secured note payable to Houston LP (the “Seller Note”). Interest on the Seller Note accrues at a variable rate equal to the Simple Secured Overnight Financing Rate (“SOFR”), for the applicable interest period, plus 2.0% per annum, or where applicable, at a specified default rate. The Stock Consideration and 50% of the Seller Note (together “Contingent Consideration”) are subject to continued employment of Seller for a period of three years and is subject to automatic forfeiture in the event of Seller termination. In accordance with US GAAP, the Contingent Consideration is not accounted for as part of purchase price. As of Closing Date, the Company evaluated the fair value of the Seller Note using a market interest rate based on the Company’s IBR (“Incremental Borrowing Rate”). As the contractual interest rate on the Seller Note (6.0% based on prevailing SOFR) was materially consistent with the estimated market rate, the Seller Note was recorded on the Consolidated Balance Sheet at the estimated present value of $50.0 million as Current portion of notes payable and Notes payable in the non-current section of Total liabilities, as appropriate. The Company recognized an acquisition related employment obligation asset for $25 million, related to the 50% of the Seller Note, that is part of the Contingent Consideration. This asset is being amortized over the three-year service period on a straight-line basis and reflected as part of Other assets in the current and non-current sections of Total assets on the Consolidated Balance Sheet. An additional net of tax amount totaling $28.7 million, (“Redistribution Payments”) paid by the Seller out of Closing Cash, is subject to continued employment obligation with RPC for a period of three years from the Closing Date. The Stock Consideration and Redistribution Payments are being amortized over the three-year service period and recorded as Acquisition related employment costs and Additional Paid in Capital. Non-cash expenses related to the Contingent Consideration and the Redistribution Payments are reflected as Acquisition related employment costs in the Consolidated Statement of Operations. For the three months ended June 30, 2025, this amount totaled $6.6 million. The Company incurred transaction expenses of approximately $698 thousand and $977 thousand for the three and six months ended June 30, 2025, respectively, which are included in Selling, general and administrative expenses within the Company’s Consolidated Statements of Operations. The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805”), primarily using Level 3 inputs. The preliminary purchase price allocation was based upon valuation information that was available to determine the preliminary fair value of certain assets and liabilities, including goodwill. The preliminary purchase price allocation is subject to change, as additional information about the fair value of the individual assets and liabilities becomes available and adjustments to net working capital are finalized. The Company expects to finalize the purchase price allocation within the measurement period, which will not exceed one year from the acquisition date. The purchase price under US GAAP was $193.7 million, which consisted of Closing Cash of $170.0 million and $25.0 million of the Seller Note not contingent on continued service, offset by $1.3 million of contractual adjustments for Pintail’s net working capital, cash and debt. The Merger Agreement contains a post-closing adjustment for an agreed-upon level of Pintail’s working capital, as well as other usual and customary items, which the Company expects to finalize by the end of fiscal year 2025, which will be reflected as part of purchase price allocation. The Company assumed finance leases related to trucks and operating leases for both vehicles and certain real estate. There were no favorable or unfavorable market terms for the leases. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, which is being amortized over 15 years for income tax purposes. Goodwill is attributable to synergies expected to be achieved from the combined operations of the Company and Pintail and the assembled workforce. The accompanying Consolidated Balance Sheet includes the assets and liabilities of Pintail, which have been measured at fair value as of the acquisition date. ​ ​ ​ The preliminary allocation of purchase price recorded for Pintail under US GAAP was as follows: ​
​ | ​ | ​ | ​ | ​
​ |  | Amount |
Cash and cash equivalents | ​ | $ | 3,000 | ​
Accounts receivable | ​ |  | 66,268 | ​
Inventories | ​ |  | 7,544 | ​
Prepaid expenses | ​ |  | 302 | ​
Property, plant and equipment, net | ​ |  | 49,310 | ​
Operating lease right-of-use assets | ​ |  | 541 | ​
Finance lease right-of-use assets | ​ |  | 1,134 | ​
Other intangibles, net | ​ |  | 96,900 | ​
Other assets | ​ |  | 6 | ​
Total assets | ​ | ​ | 225,005 | ​
​ | ​ | ​ | ​ | ​
Accounts payable | ​ | ​ | (52,601) | ​
Accrued payroll and related expenses | ​ |  | (4,911) | ​
Accrued state, local and other taxes | ​ |  | (1,498) | ​
Current portion of notes payable | ​ | ​ | (4,375) | ​
Current portion of operating lease liabilities | ​ |  | (514) | ​
Accrued expenses and other liabilities | ​ | ​ | (8,673) | ​
Long-term finance lease liabilities | ​ |  | (1,159) | ​
Total liabilities | ​ |  | (73,731) | ​
Net assets acquired | ​ | ​ | 151,274 | ​
Preliminary purchase price allocation | ​ | ​ | 193,656 | ​
Goodwill recorded | ​ | $ | 42,382 | ​
​ The purchase price allocation above excludes the contingent portion of total consideration consisting of $25 million of the Seller Note and $25 million of Stock Consideration. ​ The following table summarizes the amounts allocated to identifiable intangible assets acquired: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Preliminary Fair Value | ​ | ​ | Estimated Useful Life
(in thousands) | ​ | ​ | ​ | ​ | ​
Customer relationships | $ | 86,800 | ​ | ​ | 10
Trade names and trademarks | ​ | 10,100 | ​ | ​ | 10
Intangible assets acquired | $ | 96,900 | ​ | ​ | ​
​ The fair value of customer relationships was estimated using the multi-period excess earnings method. The excess earnings methodology is an income approach methodology that estimates the projected cash flows of the business attributable to the customer relationships intangible assets, net of charges for the use of other identifiable assets of the business including working capital, fixed assets and other intangible assets. The fair value of trade names was valued using the relief-from-royalty method, which presumes the owner of the asset avoids hypothetical royalty payments that would need to be made for the use of the asset if the asset was not owned. Pintail recognizes revenue in an amount equal to consideration received for transferred goods or services to customers. In addition, Pintail has elected the right to invoice practical expedient for recognizing revenue related to its performance obligations. Pintail’s revenues were $98.9 million for the period from April 1, 2025 to June 30, 2025. Pintail’s Net income for the period from April 1, 2025 to June 30, 2025, excluding Acquisition related employment costs was $6.9 million using an estimated effective tax rate. Pintail’s Net income includes the impact of the amortization of intangibles totaling $2.4 million as well as other purchase accounting adjustments. Pintail’s operating results are included in the Consolidated Statements of Operations for the period from Apil 1, 2025 to June 30, 2025. The following unaudited pro forma financial information presents the Company’s results of operations for the three and six months ended June 30, 2025, and 2024, as if the acquisition of Pintail had occurred on January 1, 2024. The unaudited pro forma information includes adjustments for intangible assets acquired, step-ups in the fair value of Property, plant and equipment, removal of non-recurring transaction costs directly associated with the Merger, and interest expense on the Seller Note, as well as the Acquisition related employment costs of $6.6 million and $13.2 million, respectively, associated with the Contingent Consideration and Redistribution Payments. The pro forma financial information is presented for comparative purposes only and is not necessarily indicative of the Company’s operating results that may have actually occurred had the acquisition of Pintail been completed on January 1, 2024. In addition, the unaudited pro forma financial information does not give effect to any anticipated cost savings, operating efficiencies or other synergies that may be associated with the acquisition, or any estimated costs that have been or will be incurred by the Company to integrate the assets and operations of Pintail. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended | ​ | Six months ended
​ | ​ | June 30, | ​ | June 30,
​ | ​ | 2025 |  | 2024 |  | 2025 |  | 2024
(in thousands) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Revenues | ​ | $ | 420,809 | ​ | $ | 466,513 | ​ | $ | 861,438 | ​ | $ | 944,873
Net income | ​ | ​ | 10,644 | ​ | ​ | 44,408 | ​ | ​ | 26,331 | ​ | ​ | 75,736
​

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