Advanced Analysis Free Trading Signals Real Time Alerts
Trade OEG Stock Your Capital Is At Risk

Orbital Energy Stock Rallies 10.3% on Acquisition of Front Line Power

Updated: 17 Nov 2021

Stock in Orbital Energy Group (NASDAQ: OEG) rallied over 10% in the early hours of Wednesday trading after the company announced that they will be acquiring Front Line Power, a full-service electrical infrastructure service company, for an aggregate price of $218.4M. 

The market has reacted well to the acquisition, as the deal (accretive to earnings and cash flow) is expected to generate a merged revenue of more than $300M in 2022, as well as adding significant scale to OEG with Front Line becoming a wholly-owned subsidiary.

The acquisition will be funded with a $105M, five-year term loan, two-year restricted common shares, and an $85M promissory note held by the sellers. There will be no major change to the senior management team of FLP based on current structural success. 

new-recommended-broker-banner

Orbital Energy has been in a bearish trend since the start of 2021, but recent internal changes such as the appointing of a new CFO might reignite investor faith. Similarly, the company posted positive Q3 results on Monday showing a respectable revenue increase.

OEG stock is showing a daily gain of 11% off the back of the acquisition news, with the stock trading around the $2.60 level with an annual gain of just over 20%. Bulls might want to wait for a little more confirmation before jumping in on this one, downwards momentum still seems to be dominant. 

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage . 68 % of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money .