A Houston-based energy services company plans to make its first acquisition ever to expand its product offerings.
Dril-Quip Inc. (NYSE: DRQ) is buying Houston-based downhole energy product company, TIW Corp., for about $143 million, according to a release. The deal is expected to close by the end of the year.
Dril-Quip is funding the acquisition with cash. The company mostly produces offshore drilling and production equipment.
TIW is expected to generate about $60 million to $70 million in revenue in 2016. The company reported about $140 million in revenue in 2014, per the release. It’s expected to increase its revenue to around $100 million by 2018.
“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,” Dril-Quip President and CEO Blake DeBerry said in the release. “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.”
TIW, which stands for Texas Iron Works, started in 1917 during the early Texas oil exploration period, according to its website. The company began as an oil field repair facility and has since expanded globally.