Business Context and Reporting Period
On June 15, 2026, Innovex International, Inc. (INVX) filed a Form 8-K to announce the execution of a Share Purchase Agreement to acquire 100% of TCO Group AS, a Norwegian company specializing in oil and gas equipment and services. The transaction is expected to close in early Q3 2026.
Key Financial Metrics
Transaction Value: Approximately $95 million (Norwegian krone equivalent).
Consideration Structure:
- Cash: $65 million (subject to adjustments).
- Equity: $30 million in newly issued common stock (approx. 1,063,829 shares) priced at a 15-day VWAP of $28.20.
TCO Group Financials (FY 2025):
- Revenue: $70.0 million.
- Operating Income: $16.4 million.
- Net Income: $12.4 million (18% margin).
- Adjusted EBITDA: $17.6 million (25% margin).
- Free Cash Flow: $11.5 million.
- Capital Expenditures: $0.2 million.
Material Changes and Projections
The acquisition is projected to be approximately 13% accretive to Innovex's Earnings Per Share (EPS) for the year ended December 31, 2025, assuming the transaction occurred on January 1, 2025. This calculation combines Innovex's net income of approximately $83 million with TCO Group's $12 million net income, divided by the combined share count of approximately 70.07 million shares.
The Transaction Return on Capital Employed (ROCE) is estimated at 14%, calculated using TCO Group's 2025 operating income less tax expense divided by the $95 million purchase price.
Outlook, Risks, and Contingencies
Closing Conditions: The transaction is subject to customary closing conditions and is expected to close in the third quarter of 2026.
Lock-Up Agreement: The Seller and its subsidiary have agreed to a six-month lock-up period on the Consideration Shares post-closing, with limited exceptions for transfers to wholly-owned subsidiaries.
Non-GAAP Measures: The filing utilizes Adjusted EBITDA, Free Cash Flow, and Transaction ROCE. Management notes these measures have limitations and should not be viewed as substitutes for GAAP measures.
Unregistered Securities: The issuance of Consideration Shares is exempt from registration under Section 4(a)(2) of the Securities Act of 1933.
Investor Verification Checklist
- Verify the final closing date and confirmation of all customary closing conditions.
- Confirm the final exchange rate used for the Norwegian krone to USD conversion at closing.
- Review the definitive purchase agreement for specific working capital or purchase price adjustment mechanisms.
- Assess the impact of the 1.06 million new shares on future dilution beyond the pro forma 2025 model.
- Monitor the integration plan and potential synergies not included in the initial accretion calculation.