Flowco (NYSE:FLOC) said it has entered into an agreement to acquire Valiant Artificial Lift Solutions, which management described as a leading pure-play electric submersible pump (ESP) provider in the Permian Basin. The announcement was discussed during a company conference call led by President and CEO Joe Bob Edwards, with additional comments from CFO Jon Byers and Vice President of Finance, Corporate Development, and Investor Relations Andrew Leonpacher.
Transaction terms and timing
Edwards said Flowco agreed to acquire Valiant for total consideration of $200 million, comprised of $170 million in cash and $30 million in newly issued Flowco shares. He said the transaction implies a purchase multiple of approximately 3.9x estimated 2026 Adjusted EBITDA and is expected to be accretive to earnings and free cash flow.
Flowco expects the acquisition to close in early March, subject to customary closing conditions, including regulatory approval. After closing, Valiant is expected to operate as part of Flowco’s production solutions segment, and the company said it plans to report results within that segment subject to auditor concurrence.
What Flowco said it is buying
On the call, Edwards emphasized cultural alignment, saying Flowco has known Valiant for some time and has been impressed with its execution and operational discipline. He said Valiant has focused on reliability and responsiveness and has gained share over time, including with large operators.
While Valiant’s revenue is primarily derived from the Permian Basin, Edwards said the team brings experience operating internationally and has relationships that provide “clear line of sight” to opportunities outside the U.S. over time. He also noted Valiant’s in-house assembly and repair capabilities and said it supports customers with proprietary monitoring and analytics tools used to optimize system performance.
From a financial perspective, Edwards said Valiant is expected to generate approximately $52 million of Adjusted EBITDA in 2026, with EBITDA margins around 40%, which he said are in line with Flowco’s margins and supported by a recurring, service-oriented revenue model.
Strategic rationale: adding ESPs to the portfolio
Flowco framed the acquisition as part of a strategy to build a broader production optimization platform across the lifecycle of producing wells. Edwards said adding ESPs expands Flowco’s offering so it can provide “both of the early-life lift techniques used by our customers”: high-pressure gas lift (HPGL) and ESPs, depending on well conditions.
Management also described cross-selling opportunities between the two companies’ customer bases and characterized the deal as consistent with Flowco’s approach to M&A focused on attractive valuations and returns.
In response to an analyst question about whether HPGL had been positioned previously as a replacement for ESPs, Edwards said having both offerings enables Flowco to be “dispassionate” and provide the right solution at the right time, rather than pushing a single product. He also said earlier involvement in a well’s life increases “incumbency” and provides better data to anticipate lift transitions later in the lifecycle.
Market opportunity and expansion plans discussed
Edwards said the addition of ESPs expands Flowco’s addressable market and provides exposure to what he called the largest segment of the artificial lift market. He cited an estimated $2.5 billion annual ESP market in the Lower 48 and said the international opportunity is larger. At the same time, he said Flowco’s conviction in HPGL remains unchanged, describing HPGL as approximately $1.5 billion of annual spend in the onshore U.S. market with continued strong demand and growth.
On potential geographic expansion, Edwards said Valiant is currently exclusively in the Permian Basin, but Flowco has a footprint across U.S. shale basins. He pointed to the Bakken as a significant U.S. ESP market where Flowco has presence and Valiant does not, calling it a “natural step” for potential expansion. He also suggested the transaction is more of a revenue synergy opportunity than a cost synergy story.
Capital intensity, technology, and supply chain comments
Asked about the capital intensity of the acquired business, Edwards said the ESP market in the U.S. includes both rental and OEM sales models, similar to the mix Flowco already has. Byers added that Flowco historically has run free cash flow conversion in the 40%–50% range, while the acquired business has been in the low 30s. Byers said expected maintenance capital for the ESP business would be around $15 million to $20 million on roughly $50 million of EBITDA, and that returns and payback characteristics “screen very similar” to Flowco’s existing profile.
On product positioning and competitiveness, Edwards said Valiant’s customer base reflects “leading technology” and “leading service quality.” He highlighted Valiant’s proprietary human interface that enables remote operation and optimization, as well as remote monitoring capabilities supported by facilities in Oklahoma City and Midland. He said engineers monitor wells 24/7 and use real-time data and predictive analytics to anticipate service needs as well conditions change.
Regarding tariffs and supply chain exposure, Edwards said ESP supply chains are complicated across the industry and that Valiant has been working to mitigate exposure to any single geography and to subcomponents subject to international supply chains. He added that the industry has become more comfortable managing tariff-related variability, and he said Valiant is “no worse off” than peers and may be better positioned in certain critical components.
Flowco also addressed upstream operator consolidation, with Edwards saying customer M&A to date has been a net positive for Flowco. He said smaller operators are often early adopters of techniques like HPGL, and larger acquirers tend to scale proven success stories across broader footprints.
The company said it expects to provide further updates on its next scheduled call covering fourth-quarter results, expected in roughly a month.
About Flowco (NYSE:FLOC)
We are a leading provider of production optimization, artificial lift and methane abatement solutions for the oil and natural gas industry. Our products and services include a full range of equipment and technology solutions that enable our customers to efficiently and cost-effectively maximize the profitability and economic lifespan of the production phase of their operations. Our principal products and services are organized into two business segments: (i) Production Solutions; and (ii) Natural Gas Technologies.
