Hunting PLC and Rival Downhole Tools announced that Rival has acquired the operating assets of Hunting Energy Services, a wholly owned subsidiary of Hunting, in exchange for Hunting securing a minority equity interest in Rival.
The complementary technologies, manufacturing, geographical footprints and engineering capabilities of the combined organizations – with 37 years’ experience in downhole technologies – will further establish Rival’s market position in the onshore US market. In addition, the deal will provide the catalyst for future international expansion in the Middle East and, in particular, Saudi Arabia.
“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,” said Neil Fletcher, CEO of Rival. “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.”
“The combination of Hunting’s Drilling Tools assets with Rival creates a business with a larger operating footprint, with leading technology and products,” said Jim Johnson, Chief Executive of Hunting. “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.”
Rival’s leadership team will remain in their existing roles and Hunting Energy Service’s General Manager will join the expanded business. Rival looks forward to welcoming the majority of Hunting employees. Rival’s Board of Managers will be expanded with Hunting appointing a Board Manager to oversee its rights and obligations as a minority equity holder.