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ChampionX Corporation (CHX - Free Report) , a leader in oilfield technology, acquired RMSpumptools Limited, a prominent designer and manufacturer of sophisticated mechanical and electrical solutions for complex artificial lift applications. This strategic move significantly strengthens ChampionX's capabilities and broadens its presence in critical international markets.
Sivasankaran "Soma" Somasundaram, president and CEO of ChampionX, emphasized the importance of this acquisition, stating, “By adding RMSpumptools technology to our Production & Automation Technologies (PAT) portfolio, ChampionX advances its ability to deliver greater value to customers while creating growth opportunities in international markets such as the Middle East, Latin America, and global offshore projects.”
Renowned for its expertise in electrical penetrator and connector systems, mechanical completion systems, and subsea connector systems, RMSpumptools perfectly complements ChampionX’s existing offerings. The amalgamation of RMSpumptools' innovative technologies with ChampionX's robust North American presence is expected to spur significant growth and market penetration.
ChampionX intends to operate RMSpumptools as a standalone business unit within the PAT segment, ensuring the continuation of the high-level customer service RMSpumptools’ clients expect.
With manufacturing and delivery operations in the United Kingdom, Saudi Arabia, and the United Arab Emirates, RMSpumptools is well-positioned to enhance ChampionX’s market reach. The acquisition not only augments ChampionX’s product portfolio but also opens new avenues for growth in the global oilfield services market.
This acquisition represents a pivotal step for ChampionX, bolstering its technology portfolio and expanding its global footprint. The integration of RMSpumptools’ advanced solutions is poised to provide substantial value to customers and drive growth in key international markets. As the oilfield services industry evolves, ChampionX’s strategic acquisition positions it for sustained success and innovation.
Acquisitions: A Growth Driver
CHX continues to prioritize acquisitions that align with its strategic goals, such as enhancing technology and product offerings, improving cost efficiency, and expanding its geographical footprint.
On Feb 26, 2024, CHX acquired Artificial Lift Performance Limited, an Edinburgh, Scotland-based provider of advanced analytics solutions aimed at improving oil and gas production performance.
On Jan 5, 2024, CHX finalized an agreement with OTS Consulting Services LLP (OTS), a privately held engineering services firm based in Pune, India. This acquisition included the assets and liabilities related exclusively to the services OTS provided to CHX prior to the acquisition. OTS is known for its expertise in digital transformation and advanced IT solutions, and the acquired assets and liabilities have been integrated into CHX’s Production & Automation Technologies segment.
Share Price Performance
CHX shares have gained 8.5% year to date, underperforming the Zacks Engineering - R and D Services industry’s 18.8% rise. Despite operating in a challenging environment, the company has showcased resilience, as evidenced by its performance. The first quarter of 2024 showcased the resilience of ChampionX's portfolio, with the company achieving strong adjusted EBITDA and adjusted EBITDA margin and generating robust free cash flow despite typical international seasonal headwinds. The company's ongoing focus on productivity led to significant year-over-year profitability improvement.
Image Source: Zacks Investment Research
Notably, on Apr 2, 2024, SLB and ChampionX announced a definitive Agreement and Plan of Merger, where SLB will acquire ChampionX in an all-stock transaction. The ChampionX board of directors unanimously approved this agreement. The transaction is expected to be finalized before the end of 2024. During this period, ChampionX may continue to issue its regular quarterly cash dividends with standard record and payment dates, subject to certain limitations specified in the merger agreement.
The company currently carries a Zacks Rank #3 (Hold) and has a three-to-five-year expected EPS growth rate of 12.5%, which speaks of its inherent strength. The Zacks Consensus Estimate for 2024 earnings per share indicates 7.3% year-over-year growth. The growth prospect is further solidified with a VGM Score of A, backed by a Value Score of B and a Growth Score of A.
Key Picks
Some better-ranked construction stocks have been discussed below:
FLR delivered a trailing four-quarter earnings surprise of 51.3%, on average. The Zacks Consensus Estimate for FLR’s 2024 sales and earnings per share (EPS) indicates growth of 14.3% and 5.5%, respectively, from the prior-year levels.
Quanta Services, Inc. (PWR - Free Report) currently carries a Zacks Rank of 2. The stock has soared 18.1% YTD.
PWR delivered a trailing four-quarter earnings surprise of 4.7%, on average. The Zacks Consensus Estimate for PWR’s 2024 sales and EPS indicates an improvement of 8.5% and 17.9%, respectively, from a year ago.
Dycom Industries (DY - Free Report) currently holds a Zacks Rank of 2. The stock has surged 47.4% YTD.
DY delivered a trailing four-quarter earnings surprise of 30.2%, on average. The Zacks Consensus Estimate for DY’s fiscal 2025 sales and EPS indicates an improvement of 10.2% and 8%, respectively, from a year ago.
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ChampionX (CHX) Buys RMSpumptools, Fortifies Oilfield Technology
ChampionX Corporation (CHX - Free Report) , a leader in oilfield technology, acquired RMSpumptools Limited, a prominent designer and manufacturer of sophisticated mechanical and electrical solutions for complex artificial lift applications. This strategic move significantly strengthens ChampionX's capabilities and broadens its presence in critical international markets.
Sivasankaran "Soma" Somasundaram, president and CEO of ChampionX, emphasized the importance of this acquisition, stating, “By adding RMSpumptools technology to our Production & Automation Technologies (PAT) portfolio, ChampionX advances its ability to deliver greater value to customers while creating growth opportunities in international markets such as the Middle East, Latin America, and global offshore projects.”
Renowned for its expertise in electrical penetrator and connector systems, mechanical completion systems, and subsea connector systems, RMSpumptools perfectly complements ChampionX’s existing offerings. The amalgamation of RMSpumptools' innovative technologies with ChampionX's robust North American presence is expected to spur significant growth and market penetration.
ChampionX intends to operate RMSpumptools as a standalone business unit within the PAT segment, ensuring the continuation of the high-level customer service RMSpumptools’ clients expect.
With manufacturing and delivery operations in the United Kingdom, Saudi Arabia, and the United Arab Emirates, RMSpumptools is well-positioned to enhance ChampionX’s market reach. The acquisition not only augments ChampionX’s product portfolio but also opens new avenues for growth in the global oilfield services market.
This acquisition represents a pivotal step for ChampionX, bolstering its technology portfolio and expanding its global footprint. The integration of RMSpumptools’ advanced solutions is poised to provide substantial value to customers and drive growth in key international markets. As the oilfield services industry evolves, ChampionX’s strategic acquisition positions it for sustained success and innovation.
Acquisitions: A Growth Driver
CHX continues to prioritize acquisitions that align with its strategic goals, such as enhancing technology and product offerings, improving cost efficiency, and expanding its geographical footprint.
On Feb 26, 2024, CHX acquired Artificial Lift Performance Limited, an Edinburgh, Scotland-based provider of advanced analytics solutions aimed at improving oil and gas production performance.
On Jan 5, 2024, CHX finalized an agreement with OTS Consulting Services LLP (OTS), a privately held engineering services firm based in Pune, India. This acquisition included the assets and liabilities related exclusively to the services OTS provided to CHX prior to the acquisition. OTS is known for its expertise in digital transformation and advanced IT solutions, and the acquired assets and liabilities have been integrated into CHX’s Production & Automation Technologies segment.
Share Price Performance
CHX shares have gained 8.5% year to date, underperforming the Zacks Engineering - R and D Services industry’s 18.8% rise. Despite operating in a challenging environment, the company has showcased resilience, as evidenced by its performance. The first quarter of 2024 showcased the resilience of ChampionX's portfolio, with the company achieving strong adjusted EBITDA and adjusted EBITDA margin and generating robust free cash flow despite typical international seasonal headwinds. The company's ongoing focus on productivity led to significant year-over-year profitability improvement.
Image Source: Zacks Investment Research
Notably, on Apr 2, 2024, SLB and ChampionX announced a definitive Agreement and Plan of Merger, where SLB will acquire ChampionX in an all-stock transaction. The ChampionX board of directors unanimously approved this agreement. The transaction is expected to be finalized before the end of 2024. During this period, ChampionX may continue to issue its regular quarterly cash dividends with standard record and payment dates, subject to certain limitations specified in the merger agreement.
The company currently carries a Zacks Rank #3 (Hold) and has a three-to-five-year expected EPS growth rate of 12.5%, which speaks of its inherent strength. The Zacks Consensus Estimate for 2024 earnings per share indicates 7.3% year-over-year growth. The growth prospect is further solidified with a VGM Score of A, backed by a Value Score of B and a Growth Score of A.
Key Picks
Some better-ranked construction stocks have been discussed below:
Fluor Corporation (FLR - Free Report) currently carries a Zacks Rank #2 (Buy). The stock has rallied 11.5% in the year-to-date (YTD) period. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FLR delivered a trailing four-quarter earnings surprise of 51.3%, on average. The Zacks Consensus Estimate for FLR’s 2024 sales and earnings per share (EPS) indicates growth of 14.3% and 5.5%, respectively, from the prior-year levels.
Quanta Services, Inc. (PWR - Free Report) currently carries a Zacks Rank of 2. The stock has soared 18.1% YTD.
PWR delivered a trailing four-quarter earnings surprise of 4.7%, on average. The Zacks Consensus Estimate for PWR’s 2024 sales and EPS indicates an improvement of 8.5% and 17.9%, respectively, from a year ago.
Dycom Industries (DY - Free Report) currently holds a Zacks Rank of 2. The stock has surged 47.4% YTD.
DY delivered a trailing four-quarter earnings surprise of 30.2%, on average. The Zacks Consensus Estimate for DY’s fiscal 2025 sales and EPS indicates an improvement of 10.2% and 8%, respectively, from a year ago.