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Flotek Industries Inc. Message Board

  • rosen62 rosen62 May 11, 2013 12:39 AM Flag

    Good move

    Kudos again, management! This vertical integration increases barriers to entry making Flotek much more attractive.

    A rough back of the envelope calculation shows it adds about 100 mill/ year in sales and about .15 in yearly earnings minus the cost of the new debt. Not bad considering these figures are at the low end (2012 trough) of what Florida Chemical can produce. Opportunistic acquisition indeed.

    Hopefully, the integration will also reduce some of FTK's costs offsetting the interest. Now, if at all possible, could we see some improvement in sales this year? Top line growth has been lacking!

    Sentiment: Buy

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    • I agree, good move by FTK. CEO mentioned that this purchase would be immediately accretive to Flotek shareholders and I appreciate your opening the topic to discuss how much. I do remember in the cc that around 20% of Florida Chemical's Rev. was from Flotek. just wanted to add that to the discussion

      • 1 Reply to justrealplease
      • This number is a wash. Those sales may not count for FC anymore nor the related earnings. BUT the same figures will not count on Flotek as "cost of goods" anymore as the raw material will just flow to FTK at cost (so the savings on FTK's side get counted either as savings (+) or as accretive eps from FC (+), depending on how this merger/acquisition takes place, accounting-wise.

        So I stand behind my numbers.

        Sentiment: Buy

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