October 23, 2018
Blackstone Energy Partners Announces Acquisition of Ulterra Drilling Technologies from American Securities
Blackstone Energy Partners announced today that it has entered into binding agreements to acquire a controlling, majority interest in Ulterra Drilling Technologies (“Ulterra” or the “Company”) from affiliates of American Securities LLC. American Securities and certain members of management will retain a minority equity interest in the Company going forward. Financial terms were not disclosed. The transaction is expected to close prior to year-end 2018.
Ulterra is the largest pure-play, independent supplier of polycrystalline diamond compact (“PDC”) drill bits to the oil and gas industry. The Company is one of the fastest growing PDC drill bit manufacturers, having more than doubled total revenue since 2016. Ulterra currently has a leading position in many of the most active U.S. onshore oil and gas basins, including the Permian and Eagle Ford, and has a growing presence internationally. Ulterra’s singular focus on PDC drilling technology allows it to deliver the highest level of customer service and customization to producers across a wide range of basins and geological formations, driving industry leading performance and durability.
The Company is led by a best-in-class management team who will continue in their current roles going forward, including Chief Executive Officer, John Clunan, and Chief Financial Officer, Maria Mejia, who are joined by a dedicated workforce of more than 600 employees worldwide. “We are very excited about having Blackstone as a partner as we enter the next phase of growth. 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. This new team will enable the continued expansion for our people, our culture, and our partners,” said John Clunan.
From Blackstone Energy Partners
“Drill bits 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. Ulterra is well-positioned to serve producers in these plays given its portfolio of premium PDC drill bits that deliver best-in-class performance and reliability. We look forward to partnering with American Securities and the Ulterra team as the Company enters this next phase of growth. 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 oil field services and equipment,” said Eric Liaw, Senior Managing Director of Blackstone Energy Partners.
From American Securities
“During our partnership, John and the talented Ulterra management team have established Ulterra as a market leader through their best-in-class products and focus on customer service,” said Kevin Penn, a Managing Director of American Securities. “We continue to believe in Ulterra and are excited to remain equity holders in the Company alongside the management team and Blackstone to pursue Ulterra’s next phase of growth,” added Michael Sand, a Managing Director of American Securities.
Kirkland & Ellis served as legal counsel to Blackstone. Barclays served as financial advisor to Blackstone. Simmons & Company International, Energy Specialists of Piper Jaffray and Wells Fargo Securities, LLC acted as financial advisors to American Securities and Ulterra. Weil Gotshal & Manges LLP acted as legal counsel to American Securities and Ulterra.