Solaris Oilfield Infrastructure announced it will acquire Mobile Energy Rentals LLC (MER), a provider of distributed power, including generators, transformers, and power distribution systems, for $200 million. As consideration, Solaris will pay $60 million cash and issue approximately 16.5 million shares of Solaris Class B common stock to MER’s founders and management team, who will join Solaris after the deal closes.
“Founded in 2022 and based in Houston, Texas, MER provides configurable sets of primarily natural-gas powered mobile turbines and ancillary equipment to energy, data center and other C&I end-markets,” according to the deal’s press release. “MER’s solutions provide reliable and cost-effective power where grid infrastructure may not be available or is unreliable.” That is a surprisingly large swatch of the North America.
Analysts warn of additional strain on the U.S. power grid in the coming years. Shifting energy usage, such as the shift from office to home use during the days or even the increasing use of AI (which is quite energy-intensive), as well as extreme weather all test the grid’s resilience. In the past two decades, the largest electricity outages were in 2021 and 2022, when extreme cold damaged the generation equipment that had not been designed to weather such conditions.
Statistically, the U.S. grid remains quite reliable overall – boasting 99.95% reliability, with the average customer loses power almost twice a year for a total time of nearly 5 hours. However, even disruptions of mere minutes can have major consequences.
According to the U.S. Department of Energy, nuclear power, which provides approximately 20% of the nation’s power each year, is the nation’s most reliable energy source – by far. While coal and natural gas plants supply the bulk of U.S. electricity, they require much more maintenance and frequent refueling, with nuclear plants only needing refueling once ever 1.5 – 2 years. Renewable plants such as wind and solar provide more power in recent years, but are often constrained by lack of wind and sunshine to fuel them.
Power outages are rarely due to lack of generative capacity, however, but instead transmission issues, such as when storms damage powerlines or a transformer malfunctions.
The U.S. is increasingly dependent on electricity for vital services and MERs advertises its ability to provide it: “Whether you need temporary power for a construction site, a backup generator for a hospital, or a power distribution system for a special event, we have the equipment and expertise to help you get the job done.”
According to DealPulse’s M&A database, which harnesses both AI and attorneys to digest the granular deal points of publicly announced transactions, Solaris Oilfield Infrastructure is advised by law firm Vinson & Elkins LLP. MERs is advised by law firm Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates.
