Ranger Energy Services announced it has agreed to acquire American Well Services from Argonaut Private Equity. American Well Services is a well services provider with a strong operational footprint in the Permian Basin. The acquisition increases Ranger’s scale by approximately 25%, raising its rig count and positioning the company as the largest well servicing provider in the continental United States. The transaction also expands the company’s service capabilities through the addition of complementary offerings that can drive increased revenue opportunities across Ranger’s customer base.
The total transaction consideration is valued at approximately $90.5 million. The structure includes $60 million in cash, two million shares of Ranger common stock priced at $12.51, and a potential $5 million earn-out based on American Well Services achieving $36 million in EBITDA in the first year following closing. The transaction is structured on a cash-free and debt-free basis, with the cash portion funded through cash on hand and borrowings under Ranger’s revolving credit facility. Post-closing leverage is expected to be approximately $50 million, resulting in a leverage ratio of around 0.4 times.
Ranger expects the acquisition to generate immediate accretion to earnings and free cash flow, with anticipated annual synergies of approximately $4 million expected to be fully realized before the end of 2026. On a pro forma basis, Ranger projects that EBITDA will exceed $100 million, with potential for higher earnings if commodity markets strengthen. The structure of the deal aligns with Ranger’s capital allocation strategy, which focuses on disciplined growth and continued return of capital to shareholders.
The acquisition broadens Ranger’s reach into additional service lines, including tubing rentals, inspection, chemical sales, and mixing operations, creating new opportunities to enhance revenue across its high-specification rig fleet. It also supports technology and operational initiatives, including the ECHO hybrid electric rig program and the Overwatch artificial intelligence diagnostics platform. Ranger believes the combined platform will benefit from improved efficiency, enhanced customer relationships, and increased market influence in the Lower 48.
Argonaut Private Equity, the seller of American Well Services, noted that the business and its workforce will benefit from joining a multi-basin operator with advanced technology capabilities, positioning the combined company to participate in market recovery and long-term service demand.
Support: Advisors to the transaction included Piper Sandler for Ranger and King and Spalding LLP as legal counsel. Sofos Law served as legal counsel to American Well Services and Argonaut Private Equity.
KEY QUOTES:
“Today marks another foundational step in Ranger’s growth journey. With the acquisition of AWS, Ranger is the largest well-services provider in the United States and uniquely positioned to capitalize on a market recovery while expanding reach to customers with our new technology. The reputation of the assets and strength of AWS’s customer franchise accelerates our strategic roadmap, deepens our relationships with the major operators, and expands our future opportunity set. The fleet of workover rigs at AWS has been well maintained and includes a breadth of complementary equipment. Additionally, with the AWS acquisition, Ranger will be adding service lines that have high pull through opportunities that the AWS team has benefited from in the past few years. We are excited about welcoming a new and talented group of people into the Ranger family and about the innovation and growth we will unlock together. This acquisition further powers our ECHO program and helps deliver step changes in efficiency and safety.”
“Outside of the strategic merits of this transaction, the consideration represents an attractive multiple with expected accretion on EBITDA, EPS and cash flow metrics in the near-term and illustrates a great use of Ranger’s capital and financial flexibility while minimizing dilution. The structure is a sensible mix of cash, stock, and a performance-based earn-out to ensure alignment through integration, all of which underpins our disciplined approach to inorganic growth. The pro forma business should have the capability to quickly repay acquisition-related borrowings under our current revolver while also maintaining Ranger’s current capital returns program. We have long held that the cash flows Ranger produces allow us the capacity to pursue both growth and return capital to shareholders, and our continued commitments to capital allocation along with this transaction are evidence of that in action. We will continue to maintain the conservative posture our investors have come to expect and sustain our industry-leading capital return program while adding value accretive transactions to the portfolio.”
Stuart Bodden, CEO of Ranger Energy Services
“Argonaut has made a series of investments over the past 7 years to create a best in class well services company and is proud to see the culmination of those efforts. The American Well Services team has built a strong platform with a good reputation that has benefited from recent operator consolidations. Making the choice to now combine with Ranger will enable the AWS assets and employees to take advantage of the growth opportunities that come from a multi-basin player with new and differentiated technology at an inflection point in the cycle. I look forward to seeing what the pro forma company will achieve together and appreciate the efforts of all the members of the AWS team that made today’s transaction possible.”
Steve Mitchell, CEO and Managing Director of Argonaut Private Equity
