Engineered wellhead and pressure control equipment provider Cactus, Inc. (NYSE:WHD) has agreed to acquire FlexSteel Technologies (as well as its affiliates) through the merger of HighRidge Resources (the holding company of FlexSteel) and Cactus’ subsidiary Atlas Merger.
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FlexSteel is a leading name in the production of spoolable pipe technologies and the transaction boosts Cactus’ standing in the exploration and production (E&P) industry as a supplier of engineered equipment. Moreover, the move also bolsters its downstream reach.
Additionally, FlexSteel’s offerings are complementary to Cactus’ products and the company has been witnessing robust growth as well as strong through-cycle margins.
The total consideration for the transaction is $621 million. The deal is expected to close in early 2023.
Analysts currently have a Hold consensus rating on Cactus alongside an average price target of $57.75. This indicates a 14.90% potential upside in the stock.
Shares of the company have already gained 24.8% over the last six months.
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