Oct. 24–The energy unit of private equity giant Blackstone is buying a Fort Worth company that makes drill bits used for oil and gas exploration.
Blackstone Energy Partners said Tuesday it will acquire a majority interest in Ulterra Drilling Technologies from affiliates of American Securities LLC. Financial terms were not disclosed, although Reuters reported the deal was worth around $700 million.
The sale is expected to close by the end of this year.
Ulterra is one of the fastest growing drill bit manufacturers, doubling its revenue since 2016. It had the fifth-largest share of the global drill bits industry in 2017, bringing in about $200 million in revenue, according to Reuters, which cited data from oilfield consultancy Spears & Associates.
With increased drilling and higher oil prices, oilfield services firms have been shopped around in recent weeks by their owners — many of whom are private equity firms.
Ulterra CEO John Clunan and CFO Maria Mejia will remain in their roles at the 600-employee company, which has manufacturing plants in Fort Worth and Alberta, Canada. American Securities, which bought Ulterra from Esco Corp. in 2016, also will keep a minority stake in the firm.
Esco paid $325 million for the company when it bought it in 2012.
Eric Liaw, senior managing director of Blackstone Energy Partners, said in a statement that Ulterra is “poised to benefit from drilling activity, particularly in the most economic oil and gas plays in North America.” Ulterra’s bits are used extensively in the Permian and Eagle Ford shale plays.
The Permian Basin is the nation’s largest oil producing region.
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