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On Friday, ChampionX Corporation (NASDAQ:CHX) said it plans to acquire RMSpumptools Limited, a business unit of the energy division of U.K.-based James Fisher and Sons.
The unit designs and manufactures highly engineered mechanical and electrical solutions for complex artificial lift applications.
As per the agreement terms, the net purchase price totals around £86 million, inclusive of net working capital adjustments, equivalent to approximately $110 million at the current exchange rate, the company said in a press release.
The company expects RMSpumptools to generate around $65 million in 2024 revenues and approximately $18 million in adjusted EBITDA for the same period.
The acquisition will bolster the company’s foothold in diverse international markets, including the Middle East, Latin America, and global offshore ventures.
“The acquisition of RMSpumptools is consistent with our capital allocation framework which includes bolt-on technology acquisitions,” said Sivasankaran “Soma” Somasundaram, President and CEO of ChampionX.
“RMSpumptools’ highly complementary portfolio aligns seamlessly with ChampionX’s existing Production and Automation Technologies offerings, with minimal product overlap,” Somasundaram added.
The acquisition will be funded by cash on hand and will not impact ChampionX’s 2024 return of capital framework, which includes returning at least 60% of 2024 free cash flow to shareholders.
ChampionX held $289 million of cash as of December 31, 2023. The transaction currently is expected to close towards the end of second quarter or beginning of the third quarter of 2024.
CHX stock has gained over 35% in the past year. Investors can gain exposure to the stock via Invesco Oil & Gas Services ETF (NYSE:PXJ) and VanEck Oil Services ETF (NYSE:OIH).
Price Action: CHX shares are trading higher by 0.44% to $34.51 on the last checked Friday.
Photo via shutterstock
