STEP Energy Services Ltd., a prominent player in the energy services sector, has officially announced its agreement to be taken private through a deal valued at $5.50 per share, facilitated by funds managed by ARC Financial Corp.. This development follows a non-binding offer initially received by the company on September 25, 2025. The definitive arrangement agreement, as reported, will see ARC Energy Fund 8 and its associated partnerships acquire all common shares of STEP that they do not already control, a transaction expected to conclude by December 2025.
Details of the Arrangement
The acquisition will be executed under a plan of arrangement in accordance with the Business Corporations Act of Alberta. The board of directors at STEP has unanimously endorsed the agreement, which now awaits approval from shareholders, including those holding minority shares. In support of the transaction, ARC has secured voting agreements with minority shareholders representing approximately 32.11% of the total shares, indicating considerable backing for the proposed buyout. The cash consideration for the minority shares reflects a significant premium of about 29% over the closing price prior to the announcement.
In addition to the board’s approval, the arrangement is contingent upon securing necessary court approvals and meeting customary conditions before the deal can close. Steve Glanville, President and CEO of STEP, expressed gratitude to shareholders for their support over the years and highlighted the deal as a strategic move to maximize shareholder value.
Independent Valuation and Support
To ensure fairness in the transaction, STEP engaged Ernst & Young LLP to conduct an independent valuation of the shares, which confirmed the deal price falls within the fair market value range of $4.80 to $5.70 per share. The board’s special committee, comprising independent directors, has thoroughly reviewed the offer and concluded that the arrangement is in the best interests of the company and its shareholders.
The upcoming STEP Meeting, scheduled for December 12, 2025, will be crucial for obtaining the required shareholder approval. It is expected that the shareholders will receive a comprehensive information circular detailing the arrangement by November 10, 2025. Steps are being taken to address potential disruptions in mail delivery due to the ongoing Canada Post labor dispute, ensuring that all shareholders can participate effectively in the voting process.
Future Steps and Management
Once the deal is finalized, STEP plans to delist its shares from the Toronto Stock Exchange and cease to be a reporting issuer. Despite the transition to private ownership, the company’s current management team, led by Steve Glanville, will continue to operate the business. This strategic move positions STEP Energy Services to focus on its core operations, providing coiled tubing, fluid, and nitrogen pumping solutions within the North American energy market.
As the energy sector evolves, this arrangement may pave the way for STEP to enhance its service offerings and operational efficiencies, aligning with the growing demands of the industry. Shareholders and market observers are now awaiting further developments leading up to the crucial STEP Meeting in December.
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