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Drilling Tools (DTI) to Acquire Drill-N-Ream Patent Holder

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Drilling Tools International Corporation (DTI - Free Report) , a leading oilfield services company based in the United States, has entered into an agreement to acquire Superior Drilling Products, Inc. (“SDP”) in a cash-and-stock deal. The total consideration for the transaction is approximately $32.2 million. The deal is expected to be closed in the third quarter of 2024.

The acquisition supports DTI’s overall growth strategy to become a premier provider of quality solutions and services for the oil and gas drilling industry globally. According to DTI, the company operated as an exclusive distributor of SDP’s patented Drill-N-Ream well-bore conditioning tool in North America.

Through this acquisition, DTI will integrate SDP’s patented Drill-N-Ream well-bore conditioning tool into DTI’s existing technologies. This will help DTI gain access to potential markets in newer geographies. Furthermore, the move is expected to improve operational efficiencies and lower capital requirements and operating costs.

Management Comments

Drilling Tools has expressed its enthusiasm regarding the merger. It believes that integrating the patented Drill-N-Ream technology and SDP’s best-in-class engineering, design, and manufacturing capabilities, with DTI will help expand its range of product and service offerings. DTI also stated that the merger is anticipated to drive manufacturing and distribution savings alongside boosting rental revenues with the Drill-N-Ream in the Middle East. The global oilfield service provider also mentioned that the acquisition helped expand its growth opportunities, both in the domestic and international markets with a particular focus on the Middle East.

SDP also expressed its optimism regarding the merger and described it as a strategic move that will combine the strength and expertise of both companies to drive innovation and serve customers better. The merger will allow the company to generate increased shareholder value and expand its business in the domestic as well as international markets.

Zacks Rank and Key Picks

Currently, DTI holds a Zacks Rank #3 (Hold).

Some better-ranked stocks in the energy sector are Energy Transfer LP (ET - Free Report) , Archrock Inc. (AROC - Free Report) and Harbour Energy (HBRIY - Free Report) . Both Energy Transfer and Archrock presently sport a Zacks Rank #1 (Strong Buy), while Harbour Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. With a pipeline network extending more than 125,000 miles, its network spans more than 44 states. With a presence in all the major U.S. production basins, the company’s outlook seems positive.

Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.

Harbour Energy is a leading independent oil and gas company, primarily involved in upstream operations. The recently announced acquisition of the Wintershall Dea asset portfolio is expected to increase HBRIY's estimated production. The company has also done well in reducing its debt in the past year.

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