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When your core business is missing earnings and your stock is camped out near its 52-week low, you usually raise cash by cutting costs or issuing equity at a painful discount. Mammoth Energy chose a different path. It quietly sold the business investors understood least and turned a small internal experiment into a 30 million dollar check.
This is the Aquawolf deal in a sentence. It is also a playbook for any owner who is incubating side businesses inside a bigger platform.
What Mammoth just sold
Mammoth Energy Services is a small-cap, Oklahoma City–based services company that lives in the noisy world of oilfield services, sand, drilling, rentals, and utility infrastructure work.
Inside that mix sat Aquawolf, a niche engineering unit that never matched the stereotype of a pressure pumper:
Business: Multidisciplinary infrastructure engineering focused on power delivery, transmission and distribution, natural gas, substations, and renewables.
Origins: Started around 2018 with a small initial investment and a single leader, then built into a multi-discipline team of engineers, designers, surveyors, and project managers.
Recent performance:
Revenue grew from 12.1 million dollars in 2022 to 17.3 million dollars in 2024
Net income increased from 1.1 million to 1.8 million dollars over the same period
For the first nine months of 2025, Aquawolf generated 12.0 million dollars in revenue and 1.3 million dollars in net income
The deal terms:
Buyer: Qualus, a power-sector engineering and technical services specialist backed by institutional capital
Price: 30.0 million dollars aggregate consideration
Structure: All-cash, with most of the proceeds paid at closing and a smaller portion held in escrow for typical post-closing adjustments and indemnities
On 2024 numbers that implies:
About 1.7 times revenue
Roughly 16.7 times net income
For a small, single-brand engineering shop inside a stressed public company, that is a strong outcome.
Why this deal makes sense for Mammoth
Mammoth has been under pressure. The company has posted weak earnings, negative adjusted profitability in parts of the business, and has been trading near the low end of its recent range.
Against that backdrop, Aquawolf became a strategic chip:
It was profitable and growing when some core segments were shrinking.
It lived in a different investor narrative than proppant, drilling, and accommodations.
It was clean enough to carve out and sell without dismantling the operating base.
Management has framed the sale as proof of concept: Mammoth entered engineering with modest capital, scaled the unit to more than 17 million dollars of annual revenue, then monetized it for 30 million dollars. That is a textbook internal build-and-flip.
Three strategic wins for Mammoth:
Liquidity without dilution
Instead of issuing stock at a depressed price, Mammoth converted a niche asset into fresh cash while maintaining its broader capital structure.Simpler story for investors and lenders
Dropping a non-core engineering unit makes it easier to explain the remaining portfolio: completions, rentals, sand, and infrastructure services. It also allows the company to coordinate with lenders on collateral releases and borrowing base mechanics from a position of strength.Proof that the parts are worth more than the whole
Every small-cap management team claims the market undervalues their pieces. Mammoth now has a hard number to point to: a buyer paid a mid-teens earnings multiple for a business the equity market effectively buried inside a much lower-multiple group.
For owners, this is an example of using a good asset as a pressure valve when the rest of the business is under strain.
Why Qualus is happy to pay 1.7 times revenue
On the buy-side, Qualus is not making a one-off bet. It is executing a deliberate roll-up of power-sector engineering and grid-modernization capabilities.
In recent years, Qualus has:
Bought a large North American transmission and distribution engineering business, giving it a broader footprint in power engineering.
Acquired a grid-modernization technology firm, adding software and integration capabilities on top of its engineering base.
Seen through that lens, Aquawolf offers:
Immediate capacity in overhead and underground transmission and distribution engineering, natural gas, and renewables projects.
An experienced team that has already won long-term utility work and built repeat relationships.
Geographic reach in key US regions at a time when grid investment is accelerating.
The macro backdrop helps. Rising electricity demand from data centers, electrification, and renewables is pushing a wave of spending into transmission equipment and grid upgrades. Strategic buyers with capital are using acquisitions to secure scarce talent, customer access, and project pipelines.
In that environment, paying 1.7 times revenue for an engineering team with a track record and a steady earnings profile is less about buying a spreadsheet and more about locking in capability.
Where this fits in the deal market
Zoom out and the Mammoth–Aquawolf deal sits at the intersection of three trends:
Energy and utilities M&A is chasing growth pockets
Strategic buyers are redeploying capital into faster-growing parts of the energy transition and grid modernization, rather than simply adding generic scale.Engineering and infrastructure firms are pruning portfolios
Owners are selling non-core units to recycle capital into higher-margin or higher-growth segments, even as valuations for the right platforms remain healthy.Global dealmaking is quietly rebounding
Recent M&A data show aggregate deal value ticking up again, with expectations that US deal volumes will continue to grow as financing conditions improve.
This is not a one-off curiosity. It is a small but clean example of how owners can respond when their sector is volatile but strategics still need capability.
Takeaway: Could you sell a piece of your business if you had to?
The deeper question for owners is not whether you should start an engineering unit. It is this:
If you needed to raise meaningful cash without selling the whole company, is any part of your business actually sellable as a stand-alone asset?
Most owners assume the answer is yes. For many, it is not. To keep that option open, a few best practices are worth building in now rather than during a crisis.
1. Make your side bets legible
If you are incubating a new service line or business unit, treat it like a future carve-out from day one.
Give it a clearly defined scope and customer set.
Track a clean P&L with revenue, direct costs, and overhead allocations that a buyer can understand.
Limit messy intercompany arrangements that would make separation difficult.
Buyers pay for what they can see and diligence. If your most promising unit is financially buried inside “other,” you are capping its value.
2. Put real leadership in charge
A carve-out is much easier to sell when there is a leader who can credibly run the business on day one after closing.
Name a business head, not just a senior project manager.
Give them accountability for strategy, hiring, and key relationships.
Document decision rights so it is clear what they control.
Strategic buyers are paying for teams and relationships, not just contracts and laptops.
3. Keep the customer and contract file ready
When buyers appear, you will not have time to clean up years of paperwork.
Maintain a central list of key customers, contracts, and terms for each distinct unit.
Note any change-of-control clauses, consent requirements, or exclusivity obligations.
Keep basic metrics by customer or segment: revenue, margin, duration, concentration.
This speeds up diligence and reassures buyers that the revenue they are underwriting is durable.
4. Separate your systems where it matters
You do not need separate software for everything, but a few boundaries help.
Distinct project codes and cost centers in your accounting and ERP systems.
Clear coding for staff time if people work across units.
Reasonable shared-services allocations that reflect reality without scaring off buyers.
The goal is a unit that can be peeled off without tearing out the plumbing of the entire company.
5. Know who might buy long before you think of selling
Mammoth did not have to guess who might want Aquawolf. Qualus had already telegraphed its strategy through prior deals in power engineering and grid technology.
In your industry:
Track which strategics and financial sponsors are steadily acquiring in your niche.
Note what they are buying, why they say they are buying it, and what multiples are being discussed.
Keep an informal map of natural buyers for each major business line you own.
If a downturn or strategic pivot forces you to raise cash, you want a ready-made short list and a unit that fits right into their story.
What I Read So You Don’t Have To
Mammoth’s Aquawolf sale details – Coverage confirms that Aquawolf grew from just over 12 million to more than 17 million dollars of revenue between 2022 and 2024, with rising profitability, and that Mammoth sold the unit to Qualus for 30 million dollars in cash.
Qualus’s bigger bet on power engineering – Deal announcements show Qualus acquiring a large North American transmission and distribution engineering business, signaling its long-term commitment to consolidating the power engineering space.
Energy and utilities M&A “value in motion” – Sector outlooks describe how strategic buyers are using deals to redeploy capital into faster-growing pieces of the energy transition, including transmission, grid upgrades, and renewable interconnection.
Global M&A’s quiet rebound – Recent M&A barometers highlight that deal value has begun to climb again after a slower period, with expectations for continued growth as rates stabilize and CEO confidence improves.
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Resources
Disclaimer: Some of the links below may be affiliate links*
Sources & Further Reading:
Tools & Platforms You May Find Useful:
Kumo – AI-powered deal sourcing and CRM tailored for M&A professionals
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