Mammoth Energy Services, Inc. announced that its subsidiary Lion Power Services LLC has completed a transaction to sell all equity interests in its wholly-owned subsidiaries 5 Star Electric, LLC, Higher Power Electrical, LLC and Python Equipment LLC , to Peak Utility Services Group, Inc. for an aggregate sales price of $108.7 million.
At the close of the transaction, Lion received cash proceeds totaling $98.3 million with the remaining $10.4 million deposited into an escrow account to fund post-closing adjustments for at least ninety days and indemnified liabilities until at least May 15, 2026.
As part of the transaction, Mammoth’s current Chief Executive Officer, Phil Lancaster, will become an employee of Peak upon July 1, 2025, or appointment of a successor CEO. Peak is the parent company of Track Utilities, SiteWise, Kelly Cable, Riley Brothers, and Superior Pipeline Services, five industry-leading utility services. Additionally, the Company announced it has purchased eight small passenger aircraft under lease with a commuter airline for an aggregate amount of approximately $11.5 million.
“We strongly believe that this transaction will be accretive for our shareholders,” said Arthur Amron, chairman of Mammoth’s Board of Directors.
“Mammoth entered the infrastructure sector in 2017 with the acquisitions of 5 Star and Higher Power, which we have grown and added to through organic development to generate more than $90 million of revenue annually in each of the last three years. This transaction unlocks significant value for the Mammoth enterprise. With approximately $160 million in cash on the balance sheet, we are actively exploring opportunities to deploy capital at accretive returns for the Company.”
He said Lancaster will continue serving as Mammoth’s CEO in the interim and a search has been initiated to identify his successor as CEO.
In conjunction with the transaction described above, the Company entered into an amendment to its revolving credit facility with Fifth Third Bank, National Association to (i) permit the sale of 5 Star, Higher Power and Python, (ii) permit the Company to repurchase up to the lesser of $50 million or 10 million shares of its common stock on or before March 31, 2026, so long as the aggregate amount of the Company’s unrestricted cash is greater than $50 million after each repurchase, (iii) expand the Company’s investment opportunities to include equity securities and private investments and (iv) add certain investments and qualified cash to the Company’s borrowing base calculation.
Mark Layton, Mammoth’s Chief Financial Officer, stated, “We are pleased to close this monumental transaction. The sale of these infrastructure subsidiaries demonstrates tremendous expansion and growth achieved throughout our enterprise during the past eight years. Our strategic approach continues to drive growth, and this is reflected in our preliminary review of first quarter results. After reporting sequential financial improvement in the fourth quarter of 2024, we now anticipate delivering incrementally favorable results and positive Adjusted EBITDA in the first quarter of 2025. We hope to carry this momentum throughout 2025. We have also recently amended our credit facility providing enhanced options to return value to our shareholders through stock repurchases and investment opportunities in the market. Through this addition of investments and cash to our borrowing base, our overall liquidity position will further improve.”
In commenting on the purchase of eight small passenger aircraft, Layton added, “The purchase of these aircraft will be immediately accretive to Mammoth’s financial results as each of the planes are under long-term leases with a commuter airline. These aircraft will add meaningful scale and further diversify the Company’s rental services fleet.”
Source: PR Newswire
