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HOUSTON, TX / ACCESSWIRE / July 31, 2023 / Dril-Quip, Inc. (NYSE:DRQ), (the "Company" or "Dril-Quip"), a developer, manufacturer, and provider of highly engineered equipment, service, and innovative technologies for use in the energy industry, today announced it has acquired Great North Wellhead and its subsidiaries (collectively "Great North") for approximately $80 million in an all-cash transaction, subject to customary purchase price adjustments. Great North is a leading provider of mission-critical wellhead products and well-completion solutions. Dril-Quip is purchasing Great North from Industrial Growth Partners, the majority stakeholder in the business since 2018.
Founded in 2001 and based in Edmonton, Canada, Great North will grow Dril-Quip's highly engineered solutions portfolio while expanding its geographic exposure. The transaction will integrate Great North's products and services within Dril-Quip's existing Well Construction segment, creating a strong presence for the Company in Canada, the fourth largest provider of oil and gas globally.
Great North generates annual revenue of approximately $100 million with highly accretive EBITDA margins resulting in an annual EBITDA of approximately $25 million, and encompasses a suite of equipment, rental, and service solutions:
"We are excited to welcome Great North to the Dril-Quip team. Great North has a talented employee base that brings a wealth of expertise and a solid reputation for delivering technologically different products to a diverse base of blue-chip clients," said Jeff Bird, Dril-Quip's President and Chief Executive Officer. "This acquisition marks a milestone in our mission to expand our Well Construction portfolio and we are excited for the growth opportunities that lie ahead. Our clients' satisfaction will remain our top priority; combining Great North's differentiated product offering with Dril-Quip's extensive footprint brings many benefits to our valued clients. In addition, this transaction will be immediately accretive to our shareholders in terms of returns on invested capital, adjusted EBITDA, and free cash flow."
Stephen Forberg, Great North's Chief Executive Officer, added, "We are excited to become a part of Dril-Quip as we look to enhance their existing Well Construction portfolio through our extensive experience in wellhead systems and well-completion solutions. We have been working closely with Dril-Quip to maximize our offerings while maintaining a seamless transition for our employees and our clients."
Transaction Benefits
Transaction Terms
Dril-Quip acquired Great North on a cash-free, debt-free basis utilizing cash on hand for total upfront consideration of approximately $80 million, subject to customary purchase price adjustments. In addition to the upfront consideration, there are potential earn-out payments of up to approximately $23 million to be paid over the course of 2024 and 2025 if Great North meets specific revenue growth targets. The closing occurred on July 31, 2023.
Posted In: DRQ