Only weeks after slapping down $5.4 billion to take over NexTier Oilfield Solutions, Patterson-UTI Inc. on Wednesday agreed to buy global drillbit specialist Ulterra Drilling Technologies LP.
In the definitive agreement with sponsor Blackstone Energy Partners, Patterson-UTI agreed to pay $370 million cash and trade 34.9 million common shares. Patterson-UTI was trading for around $12.20/share early Wednesday.
Ulterra, headquartered in Fort Worth, TX, is considered an expert in designing, manufacturing, selling and renting polycrystalline diamond compact (PDC) drillbits.
“Both Patterson-UTI and Ulterra share a culture of innovation and a focus on superior service quality, building deep and highly collaborative relationships with customers,” Patterson-UTI CEO Andy Hendricks said. “Ulterra’s position in the North American PDC drillbit market will expand our operational and technology portfolio and strengthen our position as a leading drilling and completions company.
“The addition of Ulterra to our drilling offering and our recent announcement to merge with NexTier Oilfield Solutions advances our strategy to enhance our positions in both drilling and completions, areas where Patterson-UTI has a strong 45-year history of operations and innovation.”
Ulterra works across the globe, with sales, manufacturing and repair facilities in 30 countries throughout North and South America, Asia and the Middle East.
“Ulterra’s growing Middle East presence will broaden our geographic footprint and provide strong relationships with key customers in this international market,” Patterson-UTI COO Mike Holcomb said. “Additionally, Ulterra’s data-centric approach to manufacturing, operations and marketing has been key to their success in the PDC drillbit business.”
Holcomb pointed to Ulterra’s BitHub data platform, which complements Patterson-UTI’s data platform. The combination “will further expand our comprehensive data analytics capabilities from the drillbit to the well completion.
“When you consider the combination of data systems from Patterson-UTI, NexTier and Ulterra, we believe we will have the most comprehensive set of data for drilling and completions across the United States, which through our analytics capabilities can allow us to better support our customers’ objectives to improve well productivity.”
Ulterra is expected to begin generating “revenue synergies” within a year, Holcomb noted.
Ulterra would remain headquartered in Fort Worth and run by current CEO John Clunan.
The merger, Clunan said, has “the potential to add our leading drillbit technologies to Patterson-UTI’s portfolio of drilling rigs, directional drilling services, controls automation and well placement technologies to better support our customers’ efforts to drill better wells.”
Blackstone’s Darius Sepassi, senior managing director, said the combination “is the right next step to continue accelerating Ulterra’s growth. We believe Patterson-UTI’s strategic direction under CEO Andy Hendricks, its breadth and its product and service offerings within drilling and completion end markets, position the company to deliver value to shareholders.”
The pending transaction is set to be completed by the end of September.
