Shares of Vivakor, Inc. (NASDAQ:VIVK), an energy services provider, surged on Friday after the company signed a non-binding letter of intent for a proposed $40 million acquisition of Direct Midstream, LLC.
Vivakor provides energy transportation, storage and remediation services, including crude oil gathering and related infrastructure.
• Vivakor stock is among today’s top performers. What’s fueling VIVK momentum?
Vivakor Targets Direct Midstream In $40 Million Deal
The company plans to acquire 100% of Direct Midstream for a gross purchase price of $40 million. The deal values the Permian Basin water midstream company at four times its targeted 2027 free cash flow of $10 million.
At closing, Vivakor would invest $10 million in Direct Midstream, reducing seller consideration by the same amount. The remaining consideration would include about $29 million of Series B Preferred Stock and $1 million of common stock. That assumes no debt or working capital adjustments.
The final purchase price could range from $30 million to $50 million based on Direct Midstream’s actual 2027 free cash flow.
Deal Expands Permian Basin Infrastructure
Direct Midstream provides produced water, disposal and oilfield waste services across the Permian Basin.
Vivakor said the acquisition would expand its regional infrastructure and complement its existing operations and Remediation Processing Center strategy.
Chairman, President and CEO James Ballengee said, "The execution of this LOI represents an important next step toward the proposed acquisition of Direct Midstream and provides a framework for moving the transaction toward a definitive agreement."
The planned $10 million investment is intended to support further development of the Direct Midstream platform.
The transaction remains subject to due diligence, audited financial statements, funding, a fairness opinion, definitive agreements, and customary closing conditions.
The stock’s sharp rise may reflect investor optimism around Vivakor’s expanding Permian Basin infrastructure and potential long-term cash flow growth.
VIVK Stock Price Activity
Vivakor shares were up 6.48% at $4.27 at the time of publication on Friday, according to Benzinga Pro data.
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