Source: Investing Published 01/27/2025, 14:07
Austin, Texas – Atlas Energy Solutions (ticker: AESI), currently trading at $23.92 and nearing its 52-week high of $25.38, today announced a definitive agreement to acquire Moser Acquisition, a leading provider of distributed energy solutions, in a deal valued at $220 million. According to InvestingPro’s analysis, Atlas Energy, which currently has a market cap of $2.64 billion, appears undervalued based on fair value metrics. The deal is expected to close by the end of the first quarter of 2025, with Atlas paying $180 million in cash and issuing approximately 1.7 million shares of its common stock, valued at $40 million.
Atlas Energy plans to diversify its operations through the acquisition of Moser’s distributed energy platform. This move will integrate Moser’s services with Atlas’ completion services, aiming to reduce volatility in the energy solutions market.
Atlas reports a current EBITDA of $261.94 million and strong revenue growth of 48.67% over the past 12 months, according to InvestingPro. These factors position Atlas well for this expansion. Moser Energy systems, which deliver an EBITDA margin exceeding 50%, should enhance Atlas’ cash flow and increase shareholder returns. InvestingPro subscribers can access 6 additional key insights into Atlas’ growth potential and financial health.
The deal also adds manufacturing and remanufacturing capabilities, potentially reducing maintenance and equipment costs. John Turner, Atlas Energy’s president and CEO, expressed optimism about the acquisition, noting that it represents a milestone for Atlas in diversifying into high-growth markets and strengthening its market position. Mark Plunkett, Managing Partner at Hilltop Opportunity Partners, praised Moser’s legacy and expressed confidence that Atlas is the right company to build on.
The transaction should immediately increase Atlas’ earnings, and the acquired assets are set to generate $40-$45 million of adjusted EBITDA for 2025. This implies a valuation of approximately 4.3 times 2025 adjusted EBITDA.
Atlas has financed the cash portion of the consideration through an amendment to increase its existing deferred drawdown term loan facility. The Atlas Board of Directors has approved the transaction, which is subject to customary closing conditions.
Concurrent with the acquisition announcement, Atlas provided preliminary estimated financial results for the fourth quarter ended December 31, 2024, and the fiscal year ended December 31, 2024.
These preliminary results indicate significant revenue growth along with declines in gross profit and adjusted EBITDA compared to the prior year. InvestingPro data shows that the company maintains moderate debt levels with a debt-to-equity ratio of 0.47 and operates at a price-to-earnings ratio of 30.2, indicating that investors are pricing in future growth potential.
A comprehensive analysis of Atlas’ financial health and growth prospects is available in the Professional Research Report, part of InvestingPro’s extensive coverage of over 1,400 U.S. stocks. Piper Sandler & Co. and Vinson & Elkins LLP are acting as financial and legal advisors to Atlas, respectively, while TPH & Co. and Katten Muchen Rosenman LLP are advising Moser on the transaction.
Atlas will host a conference call to discuss the details of the transaction on the morning of January 27, 2025, with a live webcast available to interested parties. An investor presentation on the acquisition will also be posted on Atlas’s investor relations page.
This article is based on a press release and contains forward-looking statements that involve risks and uncertainties. Actual results may differ from those projected in the forward-looking statements.
In other recent news, major firms such as Bank of America Securities, Goldman Sachs Group Inc., and Citi downgraded Atlas Energy Solutions, shifting the stock from “buy” to “neutral.” The downgrades stem from concerns about the company’s financial outlook, particularly in light of the market dynamics impacting the frac sands industry. Despite this, Atlas Energy maintains strong fundamentals, with revenue of $925.76 million and year-over-year growth of 48.67%.
In the energy sector, short sellers have had a tough start to the year, with significant losses in market value. The energy sector was the worst performer for short sellers, with energy short sellers facing a market cap loss of $5.8 billion year-to-date. Total short interest in the energy sector increased, with Chevron leading the most unprofitable shorts in the energy sector.
Texas Pacific Land Corp. will join the S&P 500, replacing Marathon Oil Corp., which sent the company’s stock soaring. Meanwhile, S&P SmallCap 600 member Mueller Industries Inc. will move to the S&P MidCap 400, filling the vacancy left by Texas Pacific Land. Atlas Energy Solutions Inc. will replace Mueller Industries in the S&P SmallCap 600.
Despite the cuts, Atlas Energy Solutions reported a 6% increase in quarterly revenue, to $304 million. The company also announced an increase in its dividend to $0.24 per share and a $200 million share repurchase program, indicating
To confidence in its financial health. These are the latest developments for Atlas Energy Solutions.
