Glori Energy to Go Public in Deal Backed by Infinity Group ... · Glori Energy Inc., a tech startup...
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1/8/14 Glori Energy to Go Public in Deal Backed by Infinity Group, Hicks Equity - WSJ.com online.wsj.com/news/articles/SB10001424052702304347904579308833257377424 1/3 BUSINESS WSJ WSJ LIVE MARKETWATCH BARRON'S PORTFOLIO DJX THE SHOPS MORE BIG's Journal BUSINESS Glori Energy to Go Public in Deal Backed by Infinity Group, Hicks Equity Union Boss Keeps Up the Fight 1 of 12 T-Mobile Adds 1.6 Million Customers 2 of 12 Phone-Hacking Trial Turns to Brooks's A... 3 of 12 Glori Energy to Go Public 4 of 12 VC-Backed Company Anticipates Being NASDAQ-Listed Around April Jan. 8, 2014 4:47 p.m. ET Glori Energy Inc., a tech startup that helps oil companies get more energy out of their mature and lessproductive fields, plans to go public through a transaction with special purpose acquisition company Infinity Cross Border Acquisition Corp. , Chief Executive Stuart Page told VentureWire. The new business will be called Glori Energy Inc. and will be listed on Nasdaq under the ticker symbol GLRI. The transaction is valued at approximately $185 million, and should bring $50 million in cash to the company, said investors involved in the deal. Funds sponsoring the deal include Infinity Group, an $800 million privateequity fund, and Hicks Equity Partners LLC, a family fund of Thomas O. Hicks . Mr. Hicks is a Dallas billionaire and founder of Hicks Muse Tate & Furst, a privateequity firm that raised over $12 billion in six funds and completed more than $50 billion in leveraged acquisitions during his tenure with the firm. Hicks, Infinity Group and other partners jointly subscribed to a $10 million to $20 million investment in the new enterprise, Mr. Hicks confirmed. Mr. Hicks has also joined the board of directors of Infinity. Glori said it should become Nasdaqlisted around April, pending Securities and Exchange Commission approvals. Mr. Hicks observed that oil companies in the U.S. in the last several years have "dramatically" ramped up oil production through "unconventional" means like shale drilling or fracking. "Those are very expensive wells," he said, "and to raise that capital, [oil companies] have been selling their conventional reservoirs." Glori's proprietary biotechnology, called the AERO System, injects a mix of "nutrients" into existing oil reservoirs (that are already flooded with water) to stimulate the "natural microbiology" there, and "loosen and release trapped oil," Mr. Page says. Only about one third of oil discovered in a typical reservoir is recoverable using conventional oil production technology, the CEO added. Glori has generated revenue by deploying its biotech and services in fields owned by clients—large oil companies in the U.S. and overseas—who paid the startup incremental fees. The Houston venture will continue to provide its services to the energy industry after going public. However, Glori plans to buy older oil fields to produce and sell oil of its own, with the money it raises through the merger. It should look in its own backyard in Texas for assets, says one of the startup's early venture backers, Matthew A. Gibbs, general partner at Oxford Bioscience Partners. INXB +0.51% What's This? Popular Now ARTICLES Christie Aide: 'Time for Some Traffic Problems' 1 To Stop Procrastinating, Check Your Mood 2 TOP STORIES IN BUSINESS By LORA KOLODNY CONNECT Email Print 0 Comments Save News, Quotes, Companies, Videos SEARCH
Transcript of Glori Energy to Go Public in Deal Backed by Infinity Group ... · Glori Energy Inc., a tech startup...
1/8/14 Glori Energy to Go Public in Deal Backed by Infinity Group, Hicks Equity - WSJ.com
online.wsj.com/news/articles/SB10001424052702304347904579308833257377424 1/3
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Glori Energy to Go Public in Deal Backed by Infinity Group, Hicks Equity
Union Boss KeepsUp the Fight
1 of 12
T-Mobile Adds 1.6 MillionCustomers
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Phone-Hacking Trial Turns toBrooks's A...
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Glori Energy to Go Public4 of 12
VC-Backed Company Anticipates Being NASDAQ-Listed Around April
Jan. 8, 2014 4:47 p.m. ET
Glori Energy Inc., a tech startup that helps oil companies get more energy out of theirmature and lessproductive fields, plans to go public through a transaction with specialpurpose acquisition company Infinity Cross Border Acquisition Corp. , ChiefExecutive Stuart Page told VentureWire.
The new business will be called Glori Energy Inc. and will be listed on Nasdaq under theticker symbol GLRI. The transaction is valued at approximately $185 million, and shouldbring $50 million in cash to the company, said investors involved in the deal.
Funds sponsoring the deal include Infinity Group, an $800 million privateequity fund, andHicks Equity Partners LLC, a family fund of Thomas O. Hicks. Mr. Hicks is a Dallasbillionaire and founder of Hicks Muse Tate & Furst, a privateequity firm that raised over$12 billion in six funds and completed more than $50 billion in leveraged acquisitionsduring his tenure with the firm.
Hicks, Infinity Group and other partners jointly subscribed to a $10 million to $20 millioninvestment in the new enterprise, Mr. Hicks confirmed. Mr. Hicks has also joined theboard of directors of Infinity.
Glori said it should become Nasdaqlisted around April, pending Securities and ExchangeCommission approvals.
Mr. Hicks observed that oil companies in the U.S. in the last several years have"dramatically" ramped up oil production through "unconventional" means like shale drillingor fracking. "Those are very expensive wells," he said, "and to raise that capital, [oilcompanies] have been selling their conventional reservoirs."
Glori's proprietary biotechnology, called the AERO System, injects a mix of "nutrients" intoexisting oil reservoirs (that are already flooded with water) to stimulate the "naturalmicrobiology" there, and "loosen and release trapped oil," Mr. Page says. Only about onethird of oil discovered in a typical reservoir is recoverable using conventional oil productiontechnology, the CEO added.
Glori has generated revenue by deploying its biotech and services in fields owned byclients—large oil companies in the U.S. and overseas—who paid the startup incrementalfees. The Houston venture will continue to provide its services to the energy industry aftergoing public.
However, Glori plans to buy older oil fields to produce and sell oil of its own, with themoney it raises through the merger. It should look in its own backyard in Texas for assets,says one of the startup's early venture backers, Matthew A. Gibbs, general partner atOxford Bioscience Partners.
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Glori pulled previous plans to go public in 2012. At the time, executives already planned toraise private capital to acquire at least one oil field. The company decided to engage in thereverse merger at the suggestion of Infinity's Mark Chess, who originally consideredinvesting in Glori as a private equity backer.
Mr. Chess said, "With a bit of due diligence, [Infinity] saw how well Glori's tech works…And they were asking us for $10 million to buy one oil field, as something that looked likean R&D expense. We said if you raise $50 million, and buy a few oil fields, we know youcan increase their production significantly, and generate value from those assets…whilegrowing your services business in places like China, where buying an oil field is not a playfor foreigners."
Investors believe Glori can "buy oil [assets] at four to six times cash flow, and realizeincreases of 30%50%, an excellent business model," and has the making of a "potentiallymassive, secondary recovery oil business," Mr. Hicks said.
Mr. Page said all of his company's earlier venture investors are keeping their capital in thecompany after the transaction is completed. The company's earlier backers includedKleiner Perkins Caufield & Byers, Oxford Biosciences Partners, GTI, Malaysian LifeSciences Capital Fund, Advantage Capital, Gentry Capital, Omzest and EnergyTechnology Ventures, a joint venture between ConocoPhillips, GeneralElectric and NRG Energy. The company previously raised $66 million in venture funding.
Write to Lora Kolodny at [email protected]
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