Atlas Energy to Acquire Moser Energy for $220 Million

AUSTIN, Texas - Atlas (NYSE:ATCO) Energy Solutions Inc. (NYSE: AESI), currently trading at $23.92 and near its 52-week high of $25.38, announced today the definitive agreement to acquire Moser Acquisition, Inc., a leading provider of distributed power solutions, in a deal valued at $220 million. According to InvestingPro analysis, Atlas Energy, with its current market capitalization of $2.64 billion, appears slightly undervalued based on its Fair Value metrics. The acquisition, expected to close by the end of the first quarter of 2025, will see Atlas paying $180 million in cash and issuing approximately 1.7 million shares of its common stock, which are valued at $40 million.

The strategic acquisition is set to diversify Atlas Energy's operations by integrating Moser's distributed power platform with its own completion services, potentially reducing volatility in the energy solutions market. With Atlas's current EBITDA of $261.94 million and strong revenue growth of 48.67% over the last twelve months, as reported by InvestingPro, the company is well-positioned for this expansion. Moser Energy Systems brings a 50%+ EBITDA margin profile and is anticipated to enhance Atlas's cash flow and shareholder returns. InvestingPro subscribers have access to 6 additional key insights about Atlas's growth potential and financial health. The deal also adds manufacturing and remanufacturing capabilities, which could lead to reduced maintenance and equipment costs.

Atlas Energy's President and CEO, John Turner, expressed optimism about the acquisition, stating it represents a milestone for Atlas in diversifying into high-growth markets and enhancing their market position. Mark Plunkett, Managing Partner of Hilltop Opportunity (SO:FTCE11B) Partners, lauded the legacy of Moser and expressed confidence in Atlas as the right company to build upon it.

The transaction is expected to be immediately accretive to Atlas, with the acquired assets projected to generate $40-45 million in Adjusted EBITDA for 2025. This implies a valuation of approximately 4.3x 2025 Adjusted EBITDA.

Atlas has secured funding for the cash portion of the consideration through an upsizing amendment to its existing delayed draw term loan facility. The Board of Directors of Atlas has approved the transaction, which is subject to customary closing conditions.

In conjunction with the acquisition announcement, Atlas provided estimated preliminary financial results for the fourth quarter ended December 31, 2024, and the fiscal year ended December 31, 2024. These preliminary results indicate significant revenue growth alongside decreases in gross profit and Adjusted EBITDA compared to the previous year. InvestingPro data shows the company maintains a moderate debt level with a debt-to-equity ratio of 0.47 and operates with a P/E ratio of 30.2, suggesting investors are pricing in future growth potential. A comprehensive analysis of Atlas's financial health and growth prospects is available in the Pro Research Report, part of the extensive coverage of 1,400+ US equities on InvestingPro.

Piper Sandler & Co. and Vinson & Elkins L.L.P. are serving as financial and legal advisors to Atlas, respectively, while TPH&Co. and Katten Muchin Rosenman LLP are advising Moser on the transaction.

Atlas will host a conference call to discuss the transaction details on the morning of January 27, 2025, with a live webcast available for interested parties. An investor presentation on the acquisition will also be posted on Atlas's Investor Relations webpage.

This article is based on a press release statement and contains forward-looking statements that involve risks and uncertainties. The actual results may differ from those projected in the forward-looking statements.

In other recent news, Atlas Energy Solutions has faced a series of downgrades from major firms, including BofA Securities, Goldman Sachs, and Citi, shifting the stock rating from Buy to Neutral. The downgrades stem from concerns over the company's financial forecasts, particularly in light of market dynamics affecting the frac sand industry. Despite this, Atlas Energy maintains strong fundamentals, with revenue reaching $925.76M and year-over-year growth of 48.67%.

In the energy sector, short sellers have experienced a challenging start to the year, with significant mark-to-market losses. Notably, the energy sector was the worst performing for short sellers, with energy sector short sellers facing $5.8 billion in year-to-date mark-to-market losses. The overall short interest in the energy sector has increased, with the most unprofitable energy shorts led by Chevron Corp. (NYSE:CVX)

Texas Pacific Land (NYSE:TPL) Corp is set to join the S&P 500, replacing Marathon Oil Corp (NYSE:MRO), sparking a surge in the company's stock. Concurrently, S&P SmallCap 600 member Mueller Industries Inc (NYSE:MLI). will graduate to the S&P MidCap 400, filling the vacancy left by Texas Pacific Land. Atlas Energy Solutions Inc. is set to take Mueller Industries' spot in the S&P SmallCap 600.

Atlas Energy Solutions, despite the downgrades, reported a 6% quarterly increase in revenue, reaching $304 million. The company also announced a dividend increase to $0.24 per share and a $200 million share repurchase program, indicating confidence in its financial health. These are the recent developments for Atlas Energy Solutions.

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