Strategic Expansion into Distributed Power Solutions
Solaris Oilfield Infrastructure, Inc. (NYSE: SOI) announced a definitive agreement to acquire Mobile Energy Rentals LLC (MER) for $200 million. The acquisition includes $60 million in cash and approximately 16.5 million Solaris Class B shares. This strategic move expands Solaris’ footprint in distributed power infrastructure solutions, targeting high-growth energy and commercial end-markets.
Enhancing Energy Market Capabilities
Solaris will integrate MER’s founders and management team post-closing. This addition aims to leverage their expertise in managing power solutions across various sectors. MER’s power generation assets, currently at 153 MW, are expected to grow to 478 MW by Q3 2025 through a $308 million investment in mobile turbines.
MER’s existing asset base is fully utilized, providing reliable, cost-effective power where grid infrastructure is unavailable. The company’s services are crucial for energy storage and lithium battery applications, addressing significant market demand.
Financial Outlook and Strategic Renaming
Solaris expects MER’s Q3 2024 Adjusted EBITDA to be $12-$13 million, with an annualized run-rate of approximately $50 million. Solaris’ financial profile will maintain <2.0x leverage at closing, ensuring continued shareholder value growth.
Following the acquisition, Solaris will rename itself Solaris Energy Infrastructure, Inc. (NYSE: SEI). This change reflects the company’s broadened scope in providing comprehensive power solutions.
Q2 Financial Update and Future Plans
Preliminary Q2 2024 results indicate Solaris’ revenue between $70-$75 million and Adjusted EBITDA between $20-$21 million. The company repaid $14 million of debt, ending the quarter with $11 million in net debt.
Solaris has secured a $300 million bridge term loan facility from Banco Santander, Texas Capital Securities, and Woodforest National Bank. The company plans to secure permanent financing before closing the transaction.
Industry Impact and Market Position
Solaris Chairman and CEO Bill Zartler highlighted the strategic benefits, stating, “MER’s solutions complement our electric offerings, providing access to new markets like oil and gas, and commercial applications.” MER founder John A. Johnson expressed enthusiasm, “Joining Solaris will enable us to scale our business and leverage their existing infrastructure for greater operational efficiency.”
This acquisition positions Solaris to address growing power demands amid rising energy market trends and green energy policies. By investing in solar technology and energy storage, Solaris aims to become a leader in sustainable energy solutions.
Source：businesswire.com
