Exterran Corporation (NYSE: EXTN) Stock Rockets on Merger News

Exterran EXTN Stock News

Exterran Corporation (NYSE: EXTN) is screaming for the top in the market this morning, and for good reason. The company announced acquisition news, exciting investors. Here’s what’s going on: 

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EXTN to be Acquired by Enerflex

In the press release, Exterran said that it would be merging forces with Enerflex to create a premier integrated global provider of energy infrastructure. Once the merger is complete, the company will operate as Enerflex Ltd. and will remain headquartered in Calgary, Alberta, Canada. 

EXTN went on to explain that through greater scale and efficiencies, the transaction will strengthen its ability to serve its customers in key natural gas, water, and energy transition markets. At the same time, the combined company will enhance shareholder value through sustainable improvements in profitability and cash flow. 

The Details of the Transaction

In the announcement, Exterran said that the merger will happen through an all-share transaction under which Enerflex will acquire all outstanding common stock of EXTN on the basis of 1.021 Enerflex shares for each outstanding share of Exterran stock. 

Once the transaction is complete, the enterprise value of the combined company will be about $1.5 billion, with $735 million of that value being represented by the value of EXTN. All told, shareholders of Exterran received an 18% premium to the value of shares as of January 21, 2022. 

Upon the closing of the transaction, Enerflex shareholders will own 72.5% of the company while EXterran shareholders will own 27.5%. 

Finally, Enerflex expects to continue trading on the Toronto Stock Exchange and intends on applying to a large U.S. based exchange, including either the NYSE or the NASDAQ. The goal is to be listed on one of these U.S. exchanges by the closing of the transaction. 

Management Commentary

In a statement, Marc Rossiter, President and CEO at Enerflex, had the following to offer:

“This is an exciting day in the history of our companies. The Transaction is immediately accretive to shareholders; enhances our presence, offerings, and scale across our regions; and importantly, executes upon our years-long strategic goal of increasing recurring revenues to improve the profitability and resiliency of our platform. Enerflex and Exterran each have a long history of global expertise in the delivery of modular energy solutions. Together, we are more efficient and better positioned in global capital markets. The Transaction will improve our ability to partner with an expanded set of customers to solve their growing energy infrastructure challenges with integrity, creativity, commitment, and success.”

The above statement was followed up by Andrew Way, President and CEO at EXTN. Here’s what he had to say:

“We are excited about the ability to create shareholder value through this Transaction and improving our product and service offering. The scale and efficiencies this combination brings is the right path for Exterran and brings significant opportunities for accelerated growth in produced water treatment and energy transition products and services.”

The Bottom Line

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The bottom line here is simple. Exterran has entered into a big acquisition deal that gives investors a large premium on top of the value of their shares. That’s exciting news. Moreover, the future combined company is set on solid foundation, making it highly appealing to hold onto the shares provided at the close of the transaction for EXTN shareholders. All told, this is a great day for both Exterran and Enerflex. 

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