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Mike Rosendahl

E: mrosendahl@pcecompanies.com

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Industry Trends

Oil Demand Forecasts Lowered Amid OPEC Uncertainty

Oil price forecasts for 2024 were lowered in September for the fifth consecutive month, cutting forecasts to between 0.9 and 1.2 million barrels per day (mbpd) , down from previous estimates of 1 to 1.3 mbpd. Key factors include weaker demand from China and uncertainty surrounding OPEC’s production strategy. Despite production cutbacks, concerns about oversupply remain. Analysts emphasize the need for economic stability to support prices as market volatility continues to weigh on recovery expectations.1 2

Ongoing Consolidation in Oil and Gas

Diamondback Energy's $26 billion acquisition of Endeavor Energy closed in September as part of a $250 billion wave of oil and gas mergers this year. ConocoPhillips' $22.5 billion purchase of Marathon Oil is set to close in Q4 2024. These recent consolidations have challenged smaller operators with increased competition and higher costs but may benefit from strategic partnerships and increased investor interest as they position themselves for acquisition by larger firms.3 4 5

AI’s Growing Power Needs

AI-driven data centers are projected to double U.S. power demand by 2030. Tech companies are increasingly exploring nuclear energy for its stable, carbon-free capabilities. Announced in September, Microsoft’s partnership with Constellation Energy to restart the Three Mile Island plant reflects a growing interest in nuclear power, a trend expected to rise as AI’s energy needs expand.6

Ammonia Emerges as a Clean Energy Alternative

U.S. ammonia production is set to rise significantly, driven by a $1.56 billion government loan announced on September 16th, 2024, to Wabash Valley Resources, targeting 500,000 metric tons of annual output. Projects like this, backed by major oil companies, use carbon capture to reduce emissions by up to 80%. As the energy sector seeks cleaner alternatives, ammonia is becoming an increasingly attractive option for U.S. businesses seeking to stabilize fuel costs and reduce emissions.7

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Equitrans Midstream Corporation
  • EQT Corporation
  • $14,384.70
  • Encore Wire Corporation
  • Prysmian S.p.A.
  • $4,808.56
  • WTG Midstream LLC
  • Energy Transfer LP
  • $3,045.13
  • U.S. Silica Holdings, Inc.
  • Apollo Global Management, Inc.
  • $2,152.40
  • Liquefied Natural Gas Process Technology and Equipment Business of Air Products and Chemicals, Inc.
  • Honeywell International Inc.
  • $1,810.00
  • Portland Natural Gas Transmission System, LP
  • Morgan Stanley Infrastructure Inc.; BlackRock Alternatives Management, LLC
  • $1,140.00
  • Overseas Shipholding Group, Inc.
  • Saltchuk Resources, Inc.
  • $1,106.45
  • Assets of Point Energy Partners, LLC
  • Northern Oil and Gas, Inc.; Vital Energy, Inc.
  • $1,100.00
  • Total Operations and Production Services, LLC
  • Archrock, Inc.
  • $983.25
  • Pinnacle Midstream II LLC
  • Phillips 66
  • $566.00

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Fluids Systems Segment of Newpark Resources, Inc.
  • SCF Partners, Inc.
  • $109.00
  • Ascend Elements, Inc.
  • SKS Private Equity
  • $98.23
  • 2.7 GW Portfolio of Renewables and Storage Assets in the U.S. of ENGIE North America Inc.
  • Ares Management Corporation
  • n/a
  • Miratech Intermediate Holdings, Inc.
  • TPG Capital, L.P.; TPG Growth, LLC
  • n/a
  • Steel Sun II and Homeridae
  • CleanCapital LLC
  • n/a
  • Avantus LLC
  • KKR & Co. Inc.
  • n/a
  • 160 MW operating wind farm located in the Midland Basin in Texas.
  • ArcLight Capital Partners, LLC
  • n/a
  • Olympus Terminals LLC
  • TPG Capital, L.P.
  • n/a
  • e1 Marine
  • Maritime Partners, LLC
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Applied Avionics, Inc.
  • Loar Group, Inc.
  • $385.00
  • Gordon Technologies, L.L.C.
  • Enersol RSC LTD
  • $270.00
  • Ghost Robotics Corporation
  • LIG Nex1 Co., Ltd.; Korea Investment Private Equity
  • $240.00
  • Lamps and Accessories Business of Lumileds, LLC
  • First Brands Group, LLC
  • $238.00
  • H2O Midstream, LLC
  • DKL Neptune Recycling, LLC
  • $230.00
  • Bren-Tronics, Inc.
  • EnerSys Advanced Systems Inc.
  • $208.00
  • Discovery Producer Services LLC
  • The Williams Companies, Inc.
  • $170.00
  • L.D. Kichler Co., Inc.
  • Progress Lighting, LLC
  • $125.00
  • NWL, Inc.
  • American Superconductor Corporation
  • $61.35
  • Foundations Business of Solar Pile International Usa Llc
  • Nextracker Inc.
  • $48.00

 

Source S&P Capital IQ as of 10/9/2024 and PCE Proprietary Data

PCE Transactions

Contacts

Michael Rosendahl

New York Office

201-444-6280 Ext 1 |

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Joe Anto

New York Office

407-621-2141 |

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Eric Zaleski

Chicago Office

847-239-2466 |

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Data Assumptions

This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.

Glossary

EBIT - Earnings Before Interest and Taxes
EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
LTM - Last Twelve Months
TEV - Total Enterprise Value

Sources:

  1. 1. Varghes, S. E. (2024, September 30). Oil forecasts cut for 5th straight month on demand, OPEC uncertainty: Reuters poll. Reuters.
  2. 2. Reuters. "US drillers cut oil and gas rigs for fifth week in six, Baker Hughes says." Reuters, September 20, 2024.
  3. 3. Lee, J. Marathon Oil Corporation. "Marathon Oil Receives Stockholder Approval for Proposed Merger with ConocoPhillips." PR Newswire, August 29, 2024.
  4. 4. Jefferies. "Inside the Mega Deals: What’s Driving Oil and Gas Consolidation?" Jefferies, July 22, 2024.
  5. 5. David Blackman. "Oil And Gas Mergers Total $250 Billion In Just 12 Months." Forbes, July 30, 2024.
  6. 6. The Wall Street Journal. "Behind Microsoft’s AI Power Deal." The Wall Street Journal, September 22, 2024.
  7. 7. Scott Patterson, Amrith Ramkumar. "Why Washington and Big Oil Are Investing Billions in Ammonia." The Wall Street Journal, September 16, 2024.
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