Evercore ISI Reiterates Hold on Frank's International (FI) Following Announced Blackhawk Acquisition
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Evercore ISI reiterated a Hold rating and $9.00 price target on Frank's International (NYSE: FI) following the company's announced acquisition of Blackhawk Group Holdings. The acquisition of Blackhawk checks off all the strategic boxes for FI. The company’s revenue stream is diversified away from solely TRS, addressable market increases by almost 60%, time on rig increases with a complementary service, and FI can leverage its international footprint to expand Blackhawk from a regionally focused company to a global player.
Analyst James West commented, "FI will acquire Blackhawk Group Holdings, Inc. for $321 million consisting of $150 million in cash (including $80 million to retire Blackhawk’s outstanding debt) and 12.8 million shares of FI stock. While the announcement wasn’t unexpected given previous indications from the company, the valuation seems elevated. We attribute the stock’s outperformance on Friday to a high short-interest which likely meant the stock would outperform on any type of news announcement besides poor earnings. Financial details were limited; as such, we leave our model unchanged and reiterate our Hold rating and $9 PT."
Shares of Frank's International closed at $13.53 yesterday.
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