Another day, another deal, and not surprisingly, I like it. SLB is exchanging its onshore U.S. and Canadian hydraulic fracturing business to Liberty Oilfield Services in exchange for 37% of the combined company. And what’s not to like?

Liberty is known as one of the better (if not the best) service companies when it comes to frac design, employee engagement and technology. It rationalizes back office G&A to leverage LBRT’s existing staff to run what is now a much smaller business than this time last year, and it brings LBRT’s tech to Canada, which, as natural gas prices continue to strengthen, is a net positive to development up north.

It’s a broken record but the only levers companies have to pull are to gain size in terms of operations and scaleability of the existing staff and to reduce headcount at the company who sold. Schlumberger has been aggressively laying off of late and no doubt, that trend will continue.

When the growth phase of an industry is over, it’s extraordinarily painful for those who work in it. On the flip side, when you are in growth mode, fundamentals don’t matter and you hire like crazy (which explains the bloat when the growth phase ends). Zoom, for one, should take note. Raise equity when the getting is good because debt is bad.

#hottakeoftheday