Blackstone Energy Partners has binding agreements in hand to acquire a majority stake in Ulterra Drilling Technologies, a drillbit manufacturer that works across North America, from affiliates of American Securities LLC.
No financial details were publicly disclosed for the transaction, in which American Securities and management are retaining minority interest, although the sale reportedly is worth close to $700 million.
Ulterra is considered one of the largest pure-play, independent suppliers of polycrystalline diamond compact (PDC) drillbits to the oil and gas industry. The Fort Worth, TX-based firm also is one of the fastest growing PDC drillbit manufacturers, having more than doubled total revenue since 2016.
“Drillbits are a mission-critical downhole consumable product, which are poised to benefit from drilling activity, particularly in the most economic oil and gas plays in North America,” Blackstone Energy Partners’ Eric Liaw, senior managing director, said. “Ulterra is well positioned to serve producers in these plays given its portfolio of premium PDC drillbits…
“We believe that high quality equipment manufacturers such as Ulterra will continue to represent attractive investment opportunities, including potential add-on acquisitions for Ulterra, or new standalone opportunities in oilfield services and equipment.”
Ulterra provides products for operators in the U.S. onshore oil and gas basins and has a growing presence internationally. The management team, including CEO John Clunan and CFO Maria Mejia, would continue to lead the company, which has a workforce of more than 600 worldwide.
“We are very excited about having Blackstone as a partner as we enter the next phase of growth,” Clunan said. “Blackstone’s in-depth knowledge of the energy markets through their upstream and midstream companies will provide valuable insight for Ulterra. We are also excited to have American Securities continue their involvement with the company…”
American Securities plans to remain an equity holder to help pursue Ulterra’s next growth phase.
Ulterra now has nearly 250,000 square feet of engineering, manufacturing and service space combined in Fort Worth and in Alberta, as well as global offices in Argentina, Colombia, Kurdistan and Oman, with a Saudi Arabian office set to open soon.
The transaction is set to close by year’s end.