Hunting has sold its US drilling tools subsidiary to Rival Downhole Tools in exchange for a minority stake in the Texan oilfield equipment supplier.
London-listed Hunting will receive 23.5% of Rival, which provides downhole drilling technologies from its Midland and Houston locations.
Rival, a portfolio company of EV Private Equity, said its purchase of Hunting Energy Services Drilling Tools’ (HESDTs’) operating assets would further establish its market position as one of the top downhole tool providers to the onshore US market.
HESDT manufactures, owns and leases downhole tools for oil and gas operations, with facilities in Conroe and Odessa, Texas, Casper, Wyoming, and Latrobe, Pennsylvania.
Rival chief executive Neil Fletcher said: “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.
“The addition of Hunting’s drilling tool business will enable us to not only serve the US 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.
“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 US and to launch overseas. This is a big moment for Rival.”
Hunting chief executive Jim Johnson said: “The combination of Hunting’s Drilling Tools assets with Rival creates a business with a larger operating footprint, with leading technology and products.
“The synergies identified will enable a compelling platform to operate within the competitive US 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.”