Great fit for Enerflex

Article Excerpt

ENERFLEX LTD. $19.74 (Toronto symbol EFX; TSINetwork Rating: Extra Risk) (403-387- 6377; www.enerflex.com; Shares outstanding: 78.3 million; Market cap: $1.3 billion; Dividend yield: 1.8%) rents and sells equipment and services for natural gas production. The stock has jumped over 20% since Enerflex announced on June 1 that it will acquire two businesses owned by privately held Axip Energy Services LP: an international contract compression and processing subsidiary, and a division that provides aftermarket services. Enerflex will pay $430 million U.S. in cash. The agreement includes operations in Mexico, South America, Southeast Asia and the Middle East, but not Axip’s U.S. business. The assets include a 448- unit compression fleet totalling about 285,000 horsepower. The fleet operates mostly under long-term rental contracts. As well, this equipment is currently 90% utilized and has an average age of just 5.5 years. The acquisition looks like a great fit for Enerflex. It expands the company’s product offerings and its international reach. It should also immediately add to its…