Rival Downhole Tools LC reported Tuesday that it has acquired the operating assets of Hunting Energy Services (Drilling Tools), Inc. (HESDT) in exchange for Hunting PLC securing a minority equity interest in Rival.
The acquisition increases Rival’s U.S. footprint and supports its international expansion, Rival noted in a written statement emailed to Rigzone.
“This transaction marks a milestone in our mission to build a market leadership position and provide a complete offering in downhole tools, in our view increasing the value of our company by over $25 million,” remarked Rival CEO Neil Fletcher. “The addition of Hunting’s drilling tool business will enable us to not only serve the U.S. but also accelerate market reach and product development, leaving us ideally placed for a series of international launches in 2021 starting with the Middle East.”
Rival pointed out the combined company boasts complementary technologies, manufacturing, geographical footprints and engineering capabilities. Moreover, it stated the deal further establishes its market position as a U.S. onshore downhole tool provider and provides a catalyst for expansion in the Middle East – particularly Saudi Arabia. Other target markets for expansion include Argentina and China, Rival added.
“We are securing significant annual cost synergies, coupling top-tier engineering with manufacturing capabilities, and expanding our product offerings to be well positioned in the U.S. and to launch overseas,” continued Fletcher. “This is a big moment for Rival.”
HESDT manufactures, owns and leases downhole tools and maintains facilities in Conroe and Odessa, Texas, Casper, Wyo., and Latrobe, Pa., stated Rival, which has locations in Houston and Midland, Texas.
“The combination of Hunting’s Drilling Tools assets with Rival creates a business with a larger operating footprint, with leading technology and products,” commented Hunting Chief Executive Jim Johnson. “The synergies identified will enable a compelling platform to operate within the competitive U.S. onshore market, while extending the customer partnerships of the combined business. The transaction also provides ongoing exposure to the drilling tools market, while allowing Hunting to refocus our capital allocation to other business opportunities.”
Rival noted that its leadership team will remain in their existing roles, adding that HESDT’s general manager will join the expanded business along with “the majority of HESDT’s employees.” Minority (23.5 percent) equity holder Hunting will appoint a board manager to Rival’s expanded board of managers, Rival added.
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