HOUSTON - Dril-Quip, Inc. (NYSE:DRQ), a prominent offshore and onshore oil and gas equipment manufacturer, is set to merge with Innovex Downhole Solutions, Inc., a provider of critical oil and gas industry technologies and services. The all-stock transaction, announced today, will result in Dril-Quip stockholders owning approximately 52% and Innovex stockholders owning roughly 48% of the new entity on a fully diluted basis.
The merger is expected to create a diversified energy industrial platform with a pro forma revenue exceeding $1 billion and adjusted EBITDA of $221 million for the fiscal year 2023, including estimated cost synergies of about $30 million annually. The combined company aims to leverage complementary product lines and global infrastructure to enhance profitability and cash flow.
Jeffrey Bird, Dril-Quip's President and CEO, expressed confidence in the merger's alignment with growth strategies and its potential to drive value for stakeholders. Adam Anderson, CEO of Innovex, highlighted the combined company's robust margins, low capital intensity, and superior return potential through industry cycles.
Upon completion, expected in the third quarter of 2024, Adam Anderson will become the CEO of the combined entity, which will be renamed Innovex International, Inc. and trade under the ticker "INVX" on the New York Stock Exchange. The leadership team will include executives from both companies, and the board will consist of nine directors.
This strategic move is designed to enhance the companies' financial profiles, with a pro forma net cash position of $99 million at year-end 2023. The merger is also anticipated to be immediately accretive to earnings and free cash flow. The information is based on a press release statement.
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