HOUSTON, Oct. 17, 2016 /PRNewswire/ -- Dril-Quip, Inc.
(NYSE: DRQ) today announced that it has entered into an agreement
to acquire TIW Corporation, a 100-year old industry-leading
manufacturer of consumable downhole products for the global oil and
gas market, for approximately $143
million, subject to closing adjustments. TIW provides liner
hanger systems and related equipment and services worldwide and is
based in Houston, Texas.
Blake DeBerry, Dril-Quip's
President and Chief Executive Officer, remarked, "We are pleased to
include TIW Corporation as part of the Dril-Quip family, and look
forward to significantly expanding our product offerings to our
customers. TIW has a long history of success as a
family-owned company and we intend to preserve that legacy by
continuing to reliably serve our customers with our combined teams
around the world. TIW is a market leader in the liner hanger
business and we are particularly excited about its expandable liner
hanger technology that is frequently utilized in deepwater or high
pressure/high temperature environments.
"This acquisition will be the first in Dril-Quip's history and
allows us to use our strong balance sheet to increase shareholder
value in the long-term. TIW's products and services fit
squarely with and complement our current product offerings.
In addition to its offshore market, TIW's onshore presence,
particularly in the Middle East
and South America, will provide
Dril-Quip with more market opportunities."
Steve Pearce, President of TIW,
commented, "I believe this transaction will positively position our
business for further expansion. Both TIW and Dril-Quip have a
long and proud tradition of innovation and commitment to the oil
and gas industry, along with a shared culture of customer service,
quality products and continual product development.
Dril-Quip's wider product offering and broader international
footprint should allow for long-term growth of our liner hanger
business."
TIW is being acquired on a debt-free, cash-free basis and
Dril-Quip intends to fund the consideration with cash on
hand. Dril-Quip anticipates synergies to be realized from
this transaction, primarily driven by cost efficiencies as well as
expanded sales opportunities. The transaction is subject to
regulatory approvals and other customary closing conditions.
It is anticipated that the closing of the transaction will occur
during the fourth quarter of 2016.
TIW reached peak revenues of approximately $140 million in 2014. Revenue is expected
to trough between $60 million and $70
million in 2016 and is expected to increase to between
$80 million and $100 million by
2018. EBITDA margins are expected to be similar to
Dril-Quip's margins once synergies are realized. Additional
transaction details are available in the Investor section of
Dril-Quip's website at www.dril-quip.com.
Evercore served as Dril-Quip's exclusive financial advisor and
PPHB served as TIW's exclusive financial advisor for this
transaction.
About TIW
TIW Corporation, founded in 1917, is globally recognized as a
leading manufacturer of liner hanger systems, including expandable
liner hangers, for both onshore and offshore applications.
TIW's products also include kelly valves, safety valves and a
comprehensive line of packers. In addition, TIW provides
rental tools and services for the installation of its products and
other wellbore construction activities.
About Dril-Quip
Dril-Quip is a leading manufacturer of highly engineered
offshore drilling and production equipment, which is well suited
for use in deepwater, harsh environment and severe service
applications.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995 regarding the potential acquisition of TIW, including
statements regarding the expected timing of the closing of the
acquisition, the satisfaction of the conditions to the closing of
the acquisition, the anticipated benefits of the acquisition and
expectations regarding projected revenue and EBITDA margins.
Forward-looking statements are based upon certain assumptions and
analyses made by the Company in light of its experience and
perception of historical trends, current conditions, expected
future developments and other factors. These statements are subject
to risks, some of which are beyond the Company's control, including
but not limited to, costs and difficulties related to the
integration of TIW's business and operations, including the
potential benefits of the acquisition, delays, costs and
difficulties relating to the acquisition, the volatility of oil and
natural gas prices and cyclicality of the oil and gas industry, the
Company's international operations, decisions made by the Company's
customers and suppliers, operating risks, and other factors
detailed in the Company's public filings with the Securities and
Exchange Commission. Investors are cautioned that any such
forward-looking statements are not guarantees of future performance
and actual outcomes may vary materially from those indicated.
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SOURCE Dril-Quip, Inc.