Expro (XPRO) Boosts Well Construction and Integrity Portfolio

Expro Group Holdings N.V. XPRO, a U.S.-based energy service provider, entered into an agreement to acquire Coretrax from an investment group led by Buckthorn Partners. Coretrax is a technology leader in performance drilling tools and wellbore cleanup, well integrity and production optimization.

The total consideration to be paid by Expro at the time of closing is $210 million. The amount includes a combination of at least $75 million of cash and up to 6.75 million newly issued Expro common shares.

The total consideration stood at 4.7X Coretrax’s estimated 2024 adjusted EBITDA, excluding possible cost and revenue synergies. Expro expects to achieve up to $10 million of annual run-rate cost synergies in the first 18 months following the acquisition.

Integrating with Coretrax will allow Expro to expand its portfolio of cost-effective, technology-enabled Well Construction and Well Intervention & Integrity solutions. The company will be able to extend these services across North and Latin America (NLA), Europe and Sub-Saharan Africa (ESSA) and the Middle East and North Africa (MENA) regions.

The acquisition provides Expro with Coretrax’s 15-years of successful history to accelerate the global availability of its innovative, high-value adding tools by utilizing its global footprint.

Coretrax’s field-proven technology offering in its Well Construction segment will complement Expro’s existing drilling optimization portfolio to provide a comprehensive set of solutions, including the DAV-MX downhole circulation tool, the HyPR Holesaver hydraulic pipe recovery system, and the Activated Drilling Scrapper debris recovery system. In the Well Intervention and Integrity segment, Coretrax brings its leading expertise in expandables business. Its expandables business brings forward the only expandables solution that can be deployed on either of the three conveyance systems — coil tubing, wireline and drill pipe.

Expro states that its portfolio will be complemented by Coretrax’s offerings with a little overlap. It will also strengthen and support XPRO’s robust portfolio of technology-enabled services and solutions through its Well Construction and Well Intervention & Integrity product lines. The acquisition will add significant value to Expro’s clients from Innovative technologies, aimed at reducing risks and costs, optimizing drilling efficiency, extending the life of existing well stock and enhancing production.

Expro also notes that the integration of Coretrax’s leading technologies would solidify its foothold in the ESSA and MENA regions, where both companies are already well established. Furthermore, XPRO expects the acquisition to garner new growth opportunities in the markets of NLA and Asia-Pacific. It is enthusiastic about leveraging the complementary capabilities and customer relationships of both companies to deliver enhanced value to customers and other stakeholders.

Coretrax commented that by leveraging the synergies between the respective companies’ portfolios, the integrated company will be able to expand its market share while also increasing its capabilities to handle the most complex well challenges. Coretrax expressed pride in its innovation-led approach, strong customer base, and successful performance history developed over the past 15 years.

Zacks Rank and Other Key Picks

Currently, XPRO holds a Zacks Rank #2 (Buy).

Investors might want to look at some other top-ranked stocks in the energy sector, such as Oceaneering International OII, Energy Transfer LP ET and Harbour Energy HBRIY. While both Oceaneering International and Energy Transfer currently sport a Zacks Rank #1 (Strong Buy), Harbour Energy holds a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Oceaneering International is a market-leading supplier of offshore equipment and technology solutions to the energy industry. The company has projected an increase in free cash flows for 2024. The bright outlook is supported by the growing market demand for its mobile robotic forklifts and underride vehicles.

Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. Boasting a pipeline network extending more than 125,000 miles, its network spans over 44 states. With a presence in all of the major U.S. production basins, the company’s outlook seems positive.

Harbour Energy is a leading independent oil and gas company, primarily involved in upstream operations. The recently announced acquisition of Wintershall Dea asset portfolio is expected to increase HBRIY's estimated production. The company has also done well in reducing its debt in the past year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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