Solaris Announces Agreement to Acquire Mobile Energy Rentals; Announces Renaming to Solaris Energy Infrastructure; Issues Second Quarter Financial Update
Summary
• Scale, end-market diversity, and contractual profile: Entry into critical distributed power infrastructure solutions provides access to multiple, high-growth end-markets; pro forma business mix expected to be >50% distributed power infrastructure, supported by a robust contract profile and a diverse set of end-markets and customers • Compelling valuation: Initial purchase multiple of 4.0x run-rate contracted Adjusted EBITDA*; MER’s third quarter 2024 Adjusted EBITDA is forecasted to be approximately $12 million - $13 million, representing annualized run-rate Adjusted EBITDA of approximately $50 million; majority of MER’s asset base currently under contract with a leading provider of artificial intelligence computing solutions • Attractive capital redeployment opportunity: MER’s existing power generation asset base of 153 MW is currently fully-utilized; the fleet is expected to grow to 478 MW by the end of the third quarter of 2025** through the purchase of additional mobile turbines for approximately $308 million and is expected to be deployed at similar return profiles across a diverse customer base • Experienced and aligned management team: MER’s founders and management team will be fully-integrated into Solaris post-closing, leveraging their long and successful track-record of managing power solutions across a range of end-markets; following the closing of the transaction, MER’s founders and management will own, in aggregate, approximately 27% of Solaris’ outstanding shares • Synergies with our business: Operational synergies are available to the combined platform via Solaris’ engineering, manufacturing, field service, commercial and corporate infrastructure • Committed to growing shareholder value: Conservative pro forma financial profile, with <2.0x leverage* at closing on a run-rate basis with further deleveraging as new power generation equipment is placed into service; committed to maintaining the current $0.48/share annualized dividend, which has been paid for 23 consecutive quarters • Aligned ownership: After the closing of the transaction, management, insiders and MER’s founders and management team will collectively own >50% of Solaris’ total outstanding shares, creating further alignment between Solaris and its shareholders Founded in 2022 and based in Houston, Texas, MER provides configurable sets of primarily natural-gas powered mobile turbines and ancillary equipment to energy, data center and other C&I end-markets. MER’s solutions complement our all-electric offering and provide access to new end-market opportunities, including oil and gas production, midstream and downstream activities as well as various C&I applications. We recognize significant value in Solaris’ existing offering, including a complementary field service team that is skilled in mobilizing and commissioning electric equipment, as well as engineering and manufacturing capabilities that can provide synergies for our business. Solaris Oilfield Infrastructure, Inc. (NYSE: SOI) provides mobile equipment that drives supply chain and execution efficiencies in the completion of oil and natural gas wells. This is due to the inherent difficulty of forecasting the timing or amount of various reconciling items that would impact the most directly comparable forward-looking GAAP financial measures, that have not yet occurred, are out of our control and/or cannot be reasonably predicted given we have not completed any reporting processes for the periods presented.