Camber Energy (NYSEAMERICAN: CEI) is climbing in the market this morning, trading on early gains of more than 21% after announcing the closing of an acquisition. Of course, the acquisition brings with it revenue opportunities, exciting investors. Here’s what’s happening:
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CEI Stock Gains After Closing Lineal Star Holdings Acquisition
In a press release issued early this morning, Camber Energy said that it has closed the previously announced acquisition of Lineal Star Holdings. The closing took place yesterday, July 8, 2019.
In the release, CEI said that the acquisition was completed through an all-stock transaction.
Based in Houston, Texas, Lineal Star is a parent company of several assets, including:
- Lineal Industries Inc., a company that has been in operations for 64 years;
- Lineal Star Incorporated.
Both of these assets have been acquired by CEI as part of the merger.
Lineal Industries is a pipeline maintenance, specialty construction and integrity services company that is listed on the Fortune 500 list of the top companies. The company has operations in Ohio, Pennsylvania, Virginia, West Virginia, Maryland and New York.
In the release, Camber Energy said that it plans to expand the Lineal brand by acquiring and developing complementary specialty engineering, procurement and construction energy infrastructure services businesses.
CEI also intends on generating organic growth in the new asset in downstream field services in Lineal Star and the company’s newly-formed Gulf Coast based operation. The comapny said that its strategy includes a balanced approach to acquire and grow energy service businesses that focus on upstream, midstream and downstream sectors that are no severely effected by wide swings in the prices of oil and natural gas.
In a statement, Louis G. Schott, CEO at CEI, had the following to offer:
We are extremely excited to announce the closing of the acquisition of Lineal which we have been working on for the past several months to complete. We believe that as a result of the acquisition, and by implementing technological efficiencies with centralized financial systems and controls, we can build a less volatile, more diverse income stream.
In addition, we plan toremain focused on the 64-year-old Lineal Industries model – providing day-to-day maintenance requirements of public utilities rights of way, upstream, midstream, downstream and pipeline maintenance, and the specialty construction and integrity services required by Lineal’s client base. These are services that are needed every day, regardless of the price of oil or natural gas. We believe the acquisition will significantly increase our future revenue streams which will in turn increase shareholder value.
Why This Transaction Is Improtant
The acquisition of Lineal Star Holdings by Camber Energy was a smart move. First and foremost, Lineal Star has been in operation for some time and is a strong revenue generator. Of course, this means that the acquisition will likely result in immediate and significant growth in revenue at CEI.
However, the benefits go further than that. CEI is focused on the oil and natural gas industries. With the acquisition of Lineal Star, a service provider to these industries, the company has the ability to reduce its cost of operations, further expanding on the value of this deal.
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