DALLAS - Vivakor Inc. (NASDAQ:VIVK), a company specializing in sustainable energy services, is moving closer to finalizing the acquisition of several oil and gas logistics and service entities, collectively known as the Endeavor Entities. The acquisition includes Endeavor Crude, LLC, and other associated firms involved in the transportation, storage, and remediation of crude oil and its byproducts.
The completion of the deal is contingent upon a range of customary closing conditions, including satisfactory due diligence, receipt of audited financials for the years ended December 31, 2022, and 2023, and approval under the Hart Scott Rodino Act. Vivakor has received the necessary audited financial statements and is preparing to file its HSR pre-merger notification, targeting a deal closure in the third quarter of 2024.
The Endeavor Entities operate in key oil-producing regions across Texas, Louisiana, Oklahoma, New Mexico, Colorado, and North Dakota, providing logistics services for crude oil, petroleum products, and oilfield waste. The acquisition is expected to create a diversified and profitable company by consolidating various affiliated businesses under common control.
Vivakor's Chairman and CEO, James Ballengee, stated that the acquisition would allow the company to capture more of the value chain and streamline operations, leading to cost efficiencies and positive free cash flow to support growth and current operations.
The transaction aims to strengthen Vivakor's position as an integrated provider of energy transportation, storage, reuse, and remediation services. The company's mission is to operate assets and technologies in the energy sector, including the development of facilities for the recovery and treatment of petroleum byproducts and waste products.
This news is based on a press release statement from Vivakor, Inc. and does not include any forward-looking statements or subjective assessments. The information presented is intended to provide investors with factual updates regarding the company's acquisition progress.
In other recent news, Vivakor Inc. has extended the contract of its Chief Financial Officer, Tyler Nelson, amending the terms of the executive employment agreement. The company also recently announced a hydrogen project in collaboration with Empire Diversified Energy, Inc., set to begin in Q3 2025.
The project aims to transform food waste into renewable hydrogen and carbon using Heartland's HelioStorm™ technology. This initiative follows a proposed merger between Vivakor and Empire.
In an additional development, Vivakor has regained compliance with Nasdaq's minimum bid price requirement, resolving an ongoing compliance issue. The company also entered into an agreement to acquire Endeavor Crude, LLC along with several related entities for $120 million.
The acquisition, expected to close by the end of the fiscal quarter ending June 30, 2024, includes entities operating in oil logistics, gathering, storage, and transportation services. These recent developments provide insight into Vivakor's strategic moves and future direction.
InvestingPro Insights
As Vivakor Inc. (NASDAQ:VIVK) progresses towards the acquisition of the Endeavor Entities, investors are closely monitoring the company's financial health and market performance.
According to recent metrics from InvestingPro, Vivakor operates with a significant debt burden and has been flagged for weak gross profit margins, with the last twelve months as of Q1 2024 showing a gross profit margin of just 7.65%. This could be a concern for investors as the company aims to streamline operations and improve cost efficiencies through its latest acquisition.
The company's stock has been experiencing a strong return, with a significant return over the last week of 33.87% and a 120.37% return over the past year as of the same period. This positive momentum is reflected in the stock trading near its 52-week high, at 84.38% of the high point. Still, the InvestingPro Tips suggest caution as the Relative Strength Index (RSI) indicates that the stock is in overbought territory, which may point to a potential pullback in the near term.
With a market capitalization of 69M USD, Vivakor's stock has been trading at a high Price / Book multiple of 4.33, which could suggest that it is valued optimistically by the market. Despite not being profitable over the last twelve months, investors have seen substantial price upticks, with the stock delivering a 211.25% total return over the last three months.
Investors interested in a deeper analysis can find additional InvestingPro Tips for Vivakor, which further delve into the company's financials and market performance. For those considering an investment in Vivakor or seeking more comprehensive insights, use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at InvestingPro. There are 12 more tips available on the platform that could help in making an informed decision.
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