Vivakor Board Approves Closing of $120 Million Acquisition of Endeavor Entities

Rhea-AI Summary

Vivakor (NASDAQ:VIVK) announced that its Board of Directors has approved the closing of its $120 million acquisition of the Endeavor Entities, effective October 1, 2024. The Endeavor Entities comprise a fully-integrated midstream logistics business that transports, stores, treats, remediates, and sells crude oil, produced water, and associated hydrocarbons. For the six months ended June 30, 2024, the Endeavor Entities realized revenues of $47.3 million and $9.3 million EBITDA, projecting to $94.6 million in revenue and $18.6 million EBITDA annually.

The acquisition strategically integrates with Vivakor's existing facilities and provides a platform for expansion. The purchase price includes assumed debt and an earn-out adjustment, payable in a combination of Vivakor common stock and Series A Convertible Preferred Stock. This acquisition positions Vivakor as one of the largest oilfield trucking service providers in the continental United States.

Positive

• Acquisition of Endeavor Entities for $120 million, expanding Vivakor's operations
• Endeavor Entities projected annual revenue of $94.6 million and EBITDA of $18.6 million
• Strategic integration with existing facilities in Colorado City, Texas and Delhi, Louisiana
• Positions Vivakor as one of the largest oilfield trucking service providers in the U.S.
• Acquisition provides immediate platform for expansion and additional revenue opportunities

Negative

• Significant acquisition cost of $120 million
• Potential dilution due to payment in company common stock and Series A Convertible Preferred Stock
• Assumed debt as part of the acquisition

Insights

Financial Analyst

The acquisition of the Endeavor Entities by Vivakor is a significant strategic move that substantially expands the company's operational scale and revenue potential. With the Endeavor Entities realizing $47.3 million in revenue and $9.3 million in EBITDA for just six months, the annualized projections of $94.6 million in revenue and $18.6 million in EBITDA represent a major boost to Vivakor's financial profile.

The $120 million purchase price, while substantial, appears justified given the strong financial performance and strategic fit. The acquisition integrates well with Vivakor's existing facilities and positions the company as a major player in oilfield logistics. The combination of stock and convertible preferred stock for payment helps preserve cash while aligning the sellers' interests with Vivakor's future success.

This deal transforms Vivakor's market position and should significantly enhance its competitive advantage in the energy services sector. Investors should closely monitor the integration process and the realization of projected synergies in the coming quarters.

Energy Industry Expert

This acquisition positions Vivakor as a major integrated player in the midstream energy sector, particularly in important oil-producing regions like the Permian Basin, Eagle Ford and Oklahoma's STACK play. The Endeavor Entities' extensive fleet and infrastructure network provide Vivakor with a robust platform for growth and diversification of services.

The focus on flexible and scalable logistics solutions, combined with value-added services like blending, reuse and remediation, addresses critical needs in the oil and gas industry. This integrated approach can potentially lead to improved operational efficiencies, cost savings for customers and enhanced environmental stewardship - all key factors in today's energy market.

The long-term strategic partnerships mentioned suggest stable revenue streams and potential for expansion. As the energy transition progresses, Vivakor's enhanced capabilities in handling produced water and remediation could prove particularly valuable, positioning the company well for future industry trends.

For the Six Months Ended June 30, 2024, the Endeavor Entities Realized Revenues of $47.3 Million, with $9.3 Million EBITDA

DALLAS, TX / ACCESSWIRE / September 24, 2024 / Vivakor, Inc. (NASDAQ:VIVK) ("Vivakor" or the "Company"), an integrated provider of energy transportation, storage, reuse, and remediation services, announced today that its Board of Directors approved the closing of its planned acquisition of Endeavor Crude, LLC, Meridian Equipment Leasing, LLC, Equipment Transport, LLC, and Silver Fuels Processing, LLC, and their subsidiaries (collectively, the "Endeavor Entities") as previously announced. The closing will be effective on October 1, 2024.

The Endeavor Entities comprise a fully-integrated, flexible and scalable midstream logistics business that transports, stores, treats, remediates, and sells crude oil, produced water, and associated hydrocarbons. They own and operate one of the largest combined oilfield trucking fleets in the continental United States transporting crude oil, petroleum products, and produced water, which is fully integrated with a network of station, terminal, and pipeline facilities for blending, processing, reuse and remediation. In addition, the Endeavor Entities have a series of long-term strategic partnerships with customers in the Permian Basin, Eagle Ford Basin, and STACK play of Oklahoma.

For the six months ended June 30, 2024, the Endeavor Entities realized revenues of $47.3 million and $9.3 million of earnings before interest, taxes, depreciation, and amortization ("EBITDA"), yielding an annualized projection of $94.6 million in revenue and $18.6 million of EBITDA for the Endeavor Entities.

"The acquisition of the Endeavor Entities is a significant milestone for Vivakor," said James Ballengee, Chairman, President, & CEO. "They strategically integrate with our existing Colorado City, Texas and Delhi, Louisiana, facilities, provide an immediate platform for our company to expand, and unlock additional opportunities and revenues for the Company."

The purchase price for the Endeavor Entities is $120 million, subject to standard post-closing adjustments, including assumed debt, and an earn-out adjustment, payable by the Company in a combination of Company common stock and Series A Convertible Preferred Stock.

Ballengee continued, "Vivakor now owns and operates one of the largest combined fleets of oilfield trucking services in the continental United States. Our focus on flexible and scaleable crude oil and produced water logistics solutions that are fully integrated with our network of station, terminal, and pipeline facilities providing blending, reuse, and remediation services will provide us with a key competitive advantage."

About Vivakor, Inc.

Vivakor, Inc. (NASDAQ:VIVK), is is an integrated provider of energy transportation, storage, reuse, and remediation services. Vivakor's corporate mission is to develop, acquire, accumulate, and operate assets, properties, and technologies in the energy sector. Its Delhi, Louisiana, and Colorado City, Texas facilities provide crude oil gathering, storage, transportation, reuse, and remediation services under long-term contracts.

Vivakor's oilfield waste remediation facilities, currently under construction, will facilitate the recovery, reuse, and disposal of petroleum byproducts and oilfield waste products.

For more information, please visit our website: http://vivakor.com

Cautionary Statement Regarding Forward-Looking Statements

This news release may contain forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements. Forward-looking statements may be identified but not limited by the use of the words "anticipates," "expects," "intends," "plans," "should," "could," "would," "may," "will," "believes," "estimates," "potential," or "continue" and variations or similar expressions. Our actual results may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, including, but not limited to, the expected transaction and ownership structure, the valuation of the transaction, the likelihood and ability of the parties to successfully and timely consummate planned acquisitions, the risk that any required regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect Vivakor or the expected benefits of the such transaction, our ability to maintain the listing of our securities on The Nasdaq Capital Market, the parties failure to realize the anticipated benefits of pending transactions, disruption and volatility in the global currency, capital, and credit markets, changes in federal, local and foreign governmental regulation, changes in tax laws and liabilities, tariffs, legal, regulatory, political and economic risks, our ability to successfully develop products, rapid change in our markets, changes in demand for our future products, and general economic conditions.

These risks and uncertainties include, but are not limited to, risks and uncertainties discussed in Vivakor's filings with the U.S. Securities and Exchange Commission, which factors may be incorporated herein by reference. Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance as projected financial information and other information are based on estimates and assumptions that are inherently subject to various significant risks, uncertainties and other factors, many of which are beyond our control. All information set forth herein speaks only as of the date hereof in the case of information about Vivakor and the Endeavor Entities or the date of such information in the case of information from persons other than Vivakor and the Endeavor Entities, and we disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication. Forecasts and estimates regarding the Endeavor Entities industries and markets are based on sources we believe to be reliable; however, there can be no assurance these forecasts and estimates will prove accurate in whole or in part.

Investor Contact:
Phone: (949) 281-2606
info@vivakor.com

ClearThink
nyc@clearthink.capital

SOURCE: Vivakor, Inc.

View the original press release on accesswire.com

FAQ

What is the value of Vivakor's acquisition of the Endeavor Entities?

Vivakor (VIVK) is acquiring the Endeavor Entities for $120 million, subject to standard post-closing adjustments, including assumed debt and an earn-out adjustment.

When will Vivakor's acquisition of the Endeavor Entities be effective?

The closing of Vivakor's acquisition of the Endeavor Entities will be effective on October 1, 2024.

What are the projected annual revenues and EBITDA for the Endeavor Entities?

Based on the first six months of 2024, the Endeavor Entities are projected to have annual revenues of $94.6 million and EBITDA of $18.6 million.

How will Vivakor (VIVK) pay for the acquisition of the Endeavor Entities?

Vivakor will pay for the acquisition using a combination of company common stock and Series A Convertible Preferred Stock.

What strategic benefits does the Endeavor Entities acquisition bring to Vivakor (VIVK)?

The acquisition integrates with Vivakor's existing facilities, provides a platform for expansion, and positions the company as one of the largest oilfield trucking service providers in the continental United States.