Thursday, July 18, 2024

Solaris to Acquire Mobile Energy Rentals, Rename to Solaris Energy Infrastructure

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Solaris Oilfield Infrastructure Inc. entered into an agreement to acquire Mobile Energy Rentals LLC for $200 million, the company announced July 9.

Houston-based Mobile Energy Rentals is a provider of distributed power solutions for the energy, commercial and industrial end markets.

Mobile’s portfolio is complementary to Solaris’ electric offerings. The transaction gives Solaris access to critical distributed power infrastructure solutions and multiple end markets, including oil and gas production, midstream and downstream activities, to create a pro forma business mix that is more than 50% distributed power infrastructure.

“As we evaluate the ‘electrification of everything’ and computing power growth needs, we believe reliable power access will become a growing challenge that larger scale, distributed power generation assets are well-positioned to address,” Solaris Chairman and CEO Bill Zartler said in the deal’s announcement. “Together with [Mobile Energy Rentals], we will continue to build on the ten plus years of innovation and leading service quality delivery across our business lines.”

Consideration for the transaction includes $60 million in cash and 16.5 million shares of Solaris Class B common stock to Mobile’s founders and management team. Solaris plans to fund the deal through a combination of debt financing and free cash flow generated from Solaris’ current business operations.

The new company, being rebranded to Solaris Energy Infrastructure Inc., has also secured an additional $308 million of turbine capacity for delivery through the third quarter of 2025, Zartler and John Johnson, Mobile’s founder and co-owner, added in the press release.

Solaris secured committed financing for both the Mobile acquisition and the turbines in the form of a $300 million, 364-day senior secured bridge term loan facility from Banco Santander, Texas Capital Securities and Woodforest National Bank. Solaris is also looking into securing permanent financing prior to closing, as well as longer duration term debt and equipment financing.

Following the transaction’s close, former Mobile management will own approximately 27% of Solaris’ outstanding shares. The team will be integrated into Solaris post-closing.

Vinson & Elkins advised Solaris on its acquisition of Mobile Energy Rentals LLC.

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