10:10 AM EDT, 05/09/2025 (MT Newswires) -- (Updates with National Bank commentary and shares)

Finning International ( FINGF ) , which rose 4% on Thursday, has lost early gains Friday after overnight saying it agreed to sell 100% of its mobile on-site refueling business, 4Refuel, to affiliates of H.I.G. Capital for about $400 million. Including leases and other indebtedness of approximately $50 million, the total implied transaction value is approximately $450 million.

The purchase price includes $330 million payable in cash upon closing, a $50 million note receivable and up to $20 million payable over two years if certain milestones are met.

Net proceeds of the transaction are expected to be used to repurchase shares under its normal course issuer bid, subject to market conditions, to pay down its credit facility, and to reinvest into core dealership operations. National Bank expects the transaction and planned share repurchases to be accretive to earnings per share.

National Bank noted the Finning ( FINGF ) board has approved the transaction, which is anticipated to close in the third quarter of 2025, subject to customary closing conditions, including all necessary regulatory approvals.

"This transaction will allow us to simplify our operations and focus on maximizing product support; and generating improved and more resilient earnings by lowering our annual SG&A; and creating sustainable growth around our core dealership operations," said Finning ( FINGF ) Chief Executive Kevin Parkes.

Separately, Finning ( FINGF ) and other Compression Technology shareholders agreed to sell ComTech for a total implied deal value of $40 million. The deal is expected to close by the end of June.

National Bank maintained its outperform rating and target price of $48 on Finning ( FINGF ) and said that these asset sales are "poised to unlock a significant amount of capital for FTT." The bank added while the transaction is likely to be slightly dilutive to short term margins, it expects Finning's ( FINGF ) ROE, ROIC to "nudge up" on accelerated capital turnover in addition to an EPS uplift on a reduced share count and lower debt levels.

National Bank believes the asset sales will be "perceived positively" as a portion of proceeds will be redeployed into the company's core dealership operations. The bank believes this is a "strategically sound decision" given likely higher pro-forma infrastructure spending in addition to incremental opportunities in the budding data center build out and reviving the Argentina business (now only about 3% of the topline).

Shares of the company were last seen flat at $41 on the Toronto Stock Exchange, having been up around $0.40 earlier.

Price: 41.23, Change: +0.23, Percent Change: +0.56