Oilfield service company Drilling Tools International (DTI) has agreed to acquire Superior Drilling Products Inc. (SDP) in a cash and stock deal valued at $32.2 million, according to a March 7 press release.
The deal comes roughly nine months after SDP engaged Piper Sandler to explore strategic alternatives including acquisitions, mergers and divestitures.
DTI, based in Houston, manufactures and rents drilling tools for natural gas wells. The company will add SDP, which also serves natural gas drilling customers with drilling tools, drill bits and other products. The acquisition will broaden DTI’s growth opportunities domestically and internationally, with DTI focusing on expanding its presence in the Middle East, said DTI CEO Wayne Prejean.
The merger will also deliver manufacturing and distribution savings, Prejean said.
“Importantly, we expect to drive rental revenue with the Drill-N-Ream in the Middle East by providing the scale and resources to help grow that business,” Prejean said. "We believe this accretive acquisition is further validation of the M&A framework and robust pipeline we have created to rapidly consolidate the oilfield services rental tool industry.”
Troy Meier, SDP's chairman and CEO, said the company has a well- established history with DTI.
“They are the right partner to help us to further penetrate the oil & gas industry with our highly effective well bore conditioning tool,” Meier said. “This strategic move represents a tremendous opportunity to leverage our combined resources and expertise to better serve our customers, drive innovation and accelerate our growth domestically and internationally.
The transaction was unanimously approved by DTI’s board and a special committee of SDP’s board.
The transaction is expected to close in the third quarter, DTI said.
Recommended Reading
Guyana’s Stabroek Boosts Production as Chevron Watches, Waits
2024-04-25 - Chevron Corp.’s planned $53 billion acquisition of Hess Corp. could potentially close in 2025, but in the meantime, the California-based energy giant is in a “read only” mode as an Exxon Mobil-led consortium boosts Guyana production.
US Interior Department Releases Offshore Wind Lease Schedule
2024-04-24 - The U.S. Interior Department’s schedule includes up to a dozen lease sales through 2028 for offshore wind, compared to three for oil and gas lease sales through 2029.
Utah’s Ute Tribe Demands FTC Allow XCL-Altamont Deal
2024-04-24 - More than 90% of the Utah Ute tribe’s income is from energy development on its 4.5-million-acre reservation and the tribe says XCL Resources’ bid to buy Altamont Energy shouldn’t be blocked.
Mexico Presidential Hopeful Sheinbaum Emphasizes Energy Sovereignty
2024-04-24 - Claudia Sheinbaum, vying to becoming Mexico’s next president this summer, says she isn’t in favor of an absolute privatization of the energy sector but she isn’t against private investments either.
Venture Global Gets FERC Nod to Process Gas for LNG
2024-04-23 - Venture Global’s massive export terminal will change natural gas flows across the Gulf of Mexico but its Plaquemines LNG export terminal may still be years away from delivering LNG to long-term customers.