Business Combinations and Asset Acquisition |
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| Business Combination [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Combinations and Asset Acquisition | Note 3 – Business Combination and Asset Acquisition Valiant Business Combination On March 2, 2026, the Company closed on the acquisition of all of the issued and outstanding equity interests of Riverstone Oilfield Services and Equipment, Inc., a Delaware corporation (the “Acquired Company”), from Riverway Group, a Cayman Islands exempted company with limited liability (the “Seller”) pursuant to the Stock Purchase Agreement dated as of February 1, 2026 (the “Purchase Agreement”) by and between the Company and the Seller. The Acquired Company is the parent company of its wholly owned subsidiary, Valiant Artificial Lift Solutions, LLC (“Valiant”). Valiant was one of the largest private, pure-play providers of ESP systems in the U.S., providing linear ESP systems, surface fluid transfer systems, and well surveillance solutions to operator primarily in the Permian Basin. Strategically, this transaction (the “Valiant Acquisition”) is expected to afford the Company with opportunities to realize significant synergies with its existing product and service offerings. The Valiant Acquisition is expected to enhance the Company’s ability to support customers earlier in the well’s production lifecycle and maintain ongoing involvement as operating conditions evolve, creating additional operational opportunities throughout the life of the well. The Company also expects to leverage its expanded footprint and customer relationships to cross-sell these complementary technologies across its combined customer base, supporting continued growth in the Permian Basin and other U.S. basins. In connection with the consummation of the Valiant Acquisition, the Company paid aggregate consideration, of approximately $315.9 million, consisting of (i) $283.1 million of cash, of which $121.3 million was related to Valiant’s cash on hand, subject to adjustment in accordance with the Purchase Agreement, and (ii) 1,454,849 shares of Class A common stock of the Company (“Common Stock,” and such shares issuable, the “Stock Consideration”). The Company funded the cash consideration through available capacity under its Revolving Credit Facility (described further herein in Note 10 - Long-Term Debt). Upon the consummation of the Valiant Acquisition, both the Acquired Company and Valiant became wholly owned subsidiaries of the Company. The Company accounted for the Valiant Acquisition as a business combination pursuant to Accounting Standards Codification 805 (“ASC 805”), which requires, among other things, that identifiable assets acquired and liabilities assumed be recognized at their acquisition date fair value. Any excess of consideration transferred over the estimated fair value of assets acquired, net of liabilities assumed, is recorded as goodwill. Determining the fair value of acquired assets and liabilities assumed requires management to make estimates, assumptions and judgments, and in some cases, management may also utilize third-party specialists to assist and advise on those estimates. The allocation of the purchase price included in the current period balance sheet is based on the best estimate of management and is preliminary and subject to change. We will continue to obtain information to assist in determining the fair value of net assets acquired during the measurement period. The final valuation will be completed as the Company obtains the information necessary to complete the analysis, but no later than one year from the acquisition date. The following table presents the preliminary purchase price allocation of the acquisition date fair value of the major classes of the assets acquired and liabilities assumed as of March 2, 2026 (in thousands):
The fair value of the assets acquired and liabilities assumed are categorized in the following levels: • Level 1 – Cash and cash equivalents, based on observable inputs such as quoted prices in active markets at the measurement date for identical assets or liabilities • Level 2 – Receivables, inventory, other current assets, right of use assets, accounts payable, accrued expenses, deferred revenue, lease obligations and deferred tax liability; based on inputs that are observable such as quoted prices in markets that are not active (e.g. quoted pricing on vendor invoices), or inputs which are observable, for substantially the full term of the asset or liability. • Level 3 – Intangibles, property, plant and equipment; based on unobservable inputs for which there is little or no market data and which assumption are made about how market participants would price the assets or liabilities. The Company used a combination of the income, cost and market participant approaches based on various assumptions and inputs. Property, plant and equipment acquired consists primarily of (i) leased fleet assets such as cable, pumps, transformers, variable speed drives and (ii) machinery equipment and manufacturing fixtures. These assets will be depreciated on a straight-line basis over the estimated useful lives of the assets. Preliminary value of identifiable intangible assets relates to contract-based customer relationship, trade name and non-compete agreement with certain executives of Valiant and will be amortized over the period of expected benefit for each respective asset. Identifiable intangible assets and their amortization periods are estimated as follows (in thousands):
The preliminary allocation of purchase price above includes approximately $55.6 million allocated to nondeductible goodwill and is supported by the strategic benefits (discussed above) to be generated from the Valiant Acquisition. For discussion pertaining to goodwill assignment by segment resulting from the Valiant Acquisition, see Note 8 – Goodwill and Intangible Assets, Net. The following table sets forth the acquisition consideration for the Valiant Acquisition as of March 2, 2026 (in thousands):
Net Sales and net income of Valiant included in the accompanying condensed consolidated statements of operations for the period from March 2, 2026 to March 31, 2026 were $11.0 million and $2.5 million, respectively. The following table sets forth the unaudited supplemental pro forma financial information for the three months ended March 31, 2026 and 2025, as if the Company had completed the Valiant Acquisition on January 1, 2025 (in thousands):
Archrock Asset Acquisition On July 1, 2025, the Company entered into an asset purchase agreement with Archrock, Inc. (“Archrock”), pursuant to which the Company would acquire certain HPGL and VRU systems, related intangible assets, and a small amount of inventory, for cash consideration of $71 million. The Company completed this transaction on August 1, 2025 and accounted for this transaction as an asset acquisition under ASC 805, as substantially all of the fair value is concentrated in a group of similar identifiable assets. As such, the Company allocated the total cost of the asset acquisition to the net assets acquired on the basis of their estimated relative fair values on the acquisition date. Transaction costs incurred in connection with this transaction were de minimis. The purchase price allocation related to the Archrock acquisition is as follows (in thousands):
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