Solaris Oilfield Acquires Mobile Energy Rentals for $200M

By Bobby Samwell • Wednesday, July 10 15:13 • Permanent Link

Solaris Oilfield Infrastructure, Inc. (NYSE: SOI) has announced its agreement to acquire Mobile Energy Rentals LLC (MER) for a purchase price of $200 million. The transaction consideration includes $60 million in cash and the issuance of approximately 16.5 million shares of Solaris class B common stock to MER’s founders and management team. This acquisition marks Solaris' entry into critical distributed power infrastructure solutions, providing access to multiple high-growth end-markets.

MER’s third quarter 2024 adjusted EBITDA is forecasted to be approximately $12 million * $13 million, representing annualized run-rate adjusted EBITDA of approximately $50 million. Additionally, MER's existing power generation asset base of 153 MW is currently fully utilized and is expected to grow to 478 MW by the end of the third quarter of 2025 through the purchase of additional mobile turbines for approximately $308 million.

Upon the closing of the transaction, Solaris will fund $60 million of cash to MER’s shareholders and reimburse MER for certain deposits and payments made for the purchase of additional turbines and ancillary equipment. Solaris has secured committed financing from Banco Santander, Texas Capital Securities, and Woodforest National Bank in the form of a $300 million 364-day senior secured bridge term loan facility.

As part of the acquisition, Solaris plans to rename the company to Solaris Energy Infrastructure, Inc. (NYSE: SEI), which the company believes more closely aligns with the opportunity to provide an expanded solutions offering to address growing power demand from multiple end-markets.

In terms of financial performance, Solaris expects second quarter revenue to be between $70 million and $75 million and adjusted EBITDA to be between $20 million and $21 million for the second quarter of 2024. The company also repaid $14 million of debt during the quarter, ending with $11 million of net debt.

Solaris will host a conference call on Wednesday, July 10, 2024, at 10:00 a.m. Central Time to discuss the acquisition. An investor presentation regarding the transaction can also be found in the investor relations section of the company’s website. Today the company's shares have moved 35.4% to a price of $11.2. For more information, read the company's full 8-K submission here.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.