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Xebec acquisition and more +3

10:13 04-Aug-20


Xebec has announced that it is acquiring a compressed air service provider in North Carolina for $6M.  Air Flow has annual revenue growing from over $10M last year to an expected $11.5M this year, and Xebec expects the transaction to be immediately accretive.  Air Flow's principles will remain with the company, and its employees will be trained to work with natural gas, allowing for support and sales of Xebec equipment in the area.  North Carolina is one of the top 10 agriculture producing states which representing significant potential for RNG projects.  Xebec also expects that Air Flow’s growth and profitability could be improved with additional supply chain and cost optimizations, product synergies and the back-office expertise Xebec has built from prior acquisitions.

Natural gas prices have risen significantly over the past week in response to power generation demands from warmer American weather.  I've predicted that natural gas prices would gradually begin to rise as American oil production plummets and note that Xebec is where Big Oil now wants to be.  XEBEF is up over 7% to top $3.50 and I am not inclined to chase it.

While I am writing I will also document Nokia's latest unquantified 5G win in Taiwan and robotics research in India.  Virtu has also formally closed its sale of MATCHNow in Canada.  NOK has moved just above $5 as anticipated, whereas VIRT is down a couple of percent to $24.30.  Only the latter seems like a mild opportunity.