Innovex acquires Citadel in strategic expansion

HOUSTON - Innovex International, Inc. (NYSE: INVX), a Houston-based energy industry company, announced the completion of its acquisition of Citadel Casing Solutions, LLC, a provider of downhole technologies aimed at enhancing operational efficiencies in the oil and gas sector. This move aligns with Innovex’s disciplined M&A framework, focusing on engineered products with a "Big Impact, Small Ticket" value proposition.

The transaction, which is expected to be 8% accretive to Innovex’s earnings per share (EPS), values Citadel at approximately 3.8 times its last twelve months (LTM) Adjusted EBITDA as of April 30, 2025. With Innovex’s current EBITDA standing at $133 million and a conservative debt-to-equity ratio of 0.08, the company appears well-positioned to integrate this acquisition. Innovex anticipates realizing roughly $2 million in cost synergies within the first three months post-acquisition, with additional synergies projected as Citadel becomes fully integrated into Innovex’s operations.

Adam Anderson, CEO of Innovex, expressed enthusiasm for the acquisition, highlighting Citadel’s successful growth and its alignment with Innovex’s ’No-Barriers’ culture. Citadel’s TrenchFoot™ Wet Shoe technology, which increases reservoir access, is cited as an example of the acquired company’s technology-driven approach to market growth.

Todd Stair, CEO of Citadel, also welcomed the acquisition, noting the potential for accelerated growth and enhanced ability to deliver efficient wells under Innovex’s umbrella.

Kendal Reed, CFO of Innovex, remarked on the financial attractiveness of the deal, citing Citadel’s rapid, profitable growth and strong returns on capital. The all-cash transaction was made possible by Innovex’s robust balance sheet and cash flow, evidenced by its impressive current ratio of 4.34 and substantial revenue growth of 43% over the last twelve months. InvestingPro analysis suggests the company is currently undervalued, with additional financial insights available through their comprehensive Pro Research Report, part of their coverage of over 1,400 US equities.

Legal advisory was provided to Innovex by Akin Gump Strauss Hauer & Feld LLP, while Citadel’s financial advisory was handled by Piper Sandler and legal advice by Troutman Pepper Locke LLP.

Innovex, formed in 2024 through the merger of Dril-Quip, Inc and Innovex Downhole Solutions, boasts a comprehensive product portfolio that spans the lifecycle of wells and has a global presence. Citadel, established in 2016, is recognized for its innovative downhole tools and commitment to continuous casing technology innovation.

The acquisition is part of Innovex’s strategic growth plan and is based on a press release statement. Trading at an attractive P/E ratio of 6.4, Innovex demonstrates strong fundamentals for value-focused investors. The financial measures used, such as Adjusted EBITDA and ROCE, are non-GAAP measures and should not be seen as more meaningful than GAAP measures. Forward-looking statements in the press release are subject to risks and uncertainties and are not guarantees of future performance. For detailed financial analysis and additional insights, investors can access the full range of metrics and expert analysis through InvestingPro’s comprehensive research platform.

In other recent news, Innovex International, Inc. has entered into a definitive agreement to sell its Houston facility for $95 million, with the transaction expected to close in the third quarter of 2025. The company plans to lease the property back on a short-term basis to complete its facility consolidation initiatives. This sale is part of Innovex’s strategy to reduce its operating footprint in Houston, aiming for significant cost reductions and improved delivery times. CEO Adam Anderson noted that the proceeds from the sale represent about 9% of the company’s current market capitalization and will enhance its net cash position. CFO Kendal Reed mentioned that the funds could be used for shareholder returns or to invest in mergers and acquisitions. Additionally, Innovex provided a business update for the first quarter of 2025, with total revenue expected to be approximately $240 million, slightly below the previously announced guidance. The company anticipates Adjusted EBITDA for the quarter to be between $44 - $46 million. Detailed earnings results for the first quarter are scheduled for release on May 6, 2025.

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