Shares of KLX Energy Services Holdings Inc (NASDAQ:KLXE) rose 11% in after-hours trading Tuesday following confirmation that KLX will acquire all assets of Wolfpack Rentals, LLC for a total purchase price of $17 million.
Under the terms of the deal, KLX will remit $14 million at closing. Two additional deferred payments of $1.5 million each are scheduled at six months and twelve months post-closing. Those deferred amounts may be paid either in cash or in KLX stock at the acquirer's discretion.
KLX characterized the transaction as immediately accretive and projected annual synergies in excess of $2 million. The company attributed the anticipated cost savings to direct overlap with two existing KLX operating districts and to corporate-level expense reductions.
Financing for the purchase will come from a combination of a capital lease financing arrangement, asset-based lending borrowings backed by the accounts receivable acquired in the transaction, and KLX's available cash on hand.
Wolfpack Rentals operates as a supplier of surface rental equipment and related services, with activity in four regions: South Texas, West Texas, East Texas, and the Northeast. The company's asset inventory includes roughly 350 accommodations trailers and command centers, 14 water filtration systems that carry exclusive North American oil and gas intellectual property rights, and additional ancillary surface rental equipment.
In commentary accompanying the announcement, Chris Baker, President and Chief Executive Officer of KLX, said the acquisition provides immediate opportunities to capture synergies, expand scale, and broaden service offerings to customers the two companies share. The transaction also brings Stewart Cooper, Chief Executive Officer of Wolfpack, into KLX to support integration activities.
Wolfpack was founded in 2005 and operates from eight facilities that cover major U.S. land basins. Its customer base includes oil and gas exploration and production operators, midstream companies, and other industrial end users.
The transaction adds a business with a material 2025 revenue and Adjusted EBITDA contribution and introduces additional regional coverage and rental assets to KLX's portfolio. Financing will rely on a mix of lease financing, ABL borrowing against acquired receivables, and cash, while management expects to realize more than $2 million in annual synergies through district overlap and corporate cost savings.