Drilling Tools International Holdings and ROC Energy Acquisition Corp. are merging to create Drilling Tools International Corp. (Source: Shutterstock)
Hicks Equity Partners-backed Drilling Tools International Holdings Inc. completed its merger with ROC Energy Acquisition Corp., creating Drilling Tools International Corp. and trading on Nasdaq as DTI.
ROC’s shareholders approved the merger on June 1 upon the end of the typical 18-month deadline for the special purpose acquisition corporation (SPAC) to close a deal. ROC's IPO had begun trading on Dec. 2, 2021.
DTI operates in 22 locations in North America, Europe and the Middle East, providing drill collars, stabilizers, crossover subs, wellbore conditioning tools, drill pipe and tubing.
The merger generated a total of $25.9 million in cash from a common stock private investment in public equity (PIPE), as well as $1.7 million in cash from ROC’s trust account, according to a press release.
The PIPE transaction totaled $40.8 million, including a total of $10.8 million reinvested by existing DTI shareholders, as well as a total of $4.1 million reinvested by affiliates of ROC’s sponsor, Fifth Partners. A portion of the proceeds paid off DTI’s debt.
“Secular trends in the energy industry point towards increased activity levels across the globe, which will help drive organic growth for DTI,” said Daniel Kimes, CEO and a co-founder of ROC. “Further, the oilfield services sector is ripe for consolidation, which will spur inorganic growth through M&A.
"DTI has the balance sheet and the distribution network to make it a natural [acquirer] in the sector.”
Wayne Prejean, DTI's CEO since 2013, is continuing as CEO. Kimes remains as a member of the board.
The formation of ROC in 2021 was led by Jim Drysdale, chairman of Fifth Partners. Co-founder Kimes was a managing director at Arch Energy Partners and was formerly with NGP Energy Capital Management.
DTI is a portfolio company of Hicks Equity Partners. Thomas Hicks, who has been on the DTI board since 2012, controls up to 44% of DTI shares since the deal's closing and he remains on the DTI board.
Bracewell LLP was counsel to DTI. Winston & Strawn LLP was counsel to ROC. Jefferies was capital markets adviser and private placement agent to ROC. EarlyBirdCapital Inc. was financial advisor to ROC.
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