Ranger Energy Services, Inc. (RNGR), a provider of high specification mobile rig well services, on Monday reported lower profit for the third quarter, mainly due to a decline in revenue. The company also announced the acquisition of American Well Services (AWS), a Permian Basin-focused well services provider, from Argonaut Private Equity for approximately $90.5 million.
Net income decreased to $1.2 million, or $0.05 per share, from $8.7 million, or $0.39 per share, in the prior-year period.
Operating income fell sharply to $2.6 million from $12.9 million a year ago.
Adjusted EBITDA or adjusted earnings before interest, taxes, depreciation, and amortization for the quarter was $16.8 million, down from $25.1 million in the prior-year period.
Revenue declined 16% to $128.9 million from $153 million a year earlier. Segment-wise, High Specification Rigs revenue fell $5.8 million to $80.9 million, Processing Solutions and Ancillary Services revenue dropped 14% to $30.8 million, and Wireline Services revenue declined 43% to $17.2 million.
Ranger declared a cash dividend of $0.06 per share, payable on December 5 to shareholders of record as of November 21.
The AWS acquisition, which represents less than 2.5 times trailing EBITDA, includes $60 million in cash and 2 million shares of Ranger stock valued at $12.51 per share, along with a $5 million earn-out contingent on AWS achieving $36 million in EBITDA within 12 months of closing.
The transaction is expected to be immediately accretive to earnings and cash flow, with annual synergies of about $4 million anticipated to be fully realized by the end of 2026. On a pro forma basis, Ranger's forward EBITDA is projected to exceed $100 million, and the acquisition is expected to strengthen pull-through revenue opportunities in its high-specification rig segment.
Ranger's stock was down more than 2% in pre-market trading, after closing 0.22% lower at $13.75 on Friday.
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