SAExploration Holdings Inc (NASDAQ: SAEX) is having a great start to the trading session this morning, and for good reason. The company announed news surrounding an asset purchase that proved to be a source of excitement for investors. Today, we’ll talk about:
- The asset acquisition;
- what we’re seeing from SAEX as a result; and
- what we’ll be watching for with regard to the stock ahead.
SAEX Announces Asset Purchase News
As mentioned above, SAExploration is having a great day in the market today after announcing news with regard to an asset acquisition. In a press release issued early this morning, the company announced that the United States Bankruptcy Court of the Southern District of Texas, Houston Division, has entered an order with regard to an Asset Purchase Agreement. The agreement, dated June 26, 2018 has been approved by the court. The agreement is between SAEX and Geokinetics, Inc. (GEOK) and surrounds the company’s acquisition of certain GEOK assets.
In the release, SAEX said that the transaction is expected to close on or around July 24th. It also announced that it has reached an agreement with certain lenders to fund $25 million in aggregate principal amount of borrowings, which will be used to fund the asset acquisition. In a statement, Jeff Hastings, Chairman and CEO at SAEX, had the following to offer:
We are pleased to have received the Court’s approval of the sale. We have been working earnestly to ensure a smooth integration of these complementary assets upon closing and look forward to creating relationships with new customers, further expanding relationships with many of our existing customers and welcoming certain of the existing employees of GEOK to our team in the near future. We are also appreciative of the willingness of our senior lenders to support the acquisition by providing the necessary short-term financing to capture the opportunity. We expect the acquisition to provide SAE with access to new markets and to be accretive to future earnings and cash flow.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news causes moves. In the case of SAEX, the news proved to be overwhelmingly positive. After all, the company has received approval to make an accretive asset acquisition that many believe will push the company toward profit. On top of that, the company also announced that it has secured funding to ensure that the acquisition takes place. So, it comes as no surprise to see that excited investors are sending the stock on a run for the top this morning. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. At the moment (10:08), SAEX is trading at $2.40 per share after a gain of $0.70 per share or 41.18% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on SAEX. In particular, we’re interested in following this transaction to closing and excited to see the value and revenue the transaction adds to the company. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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