Business
Drilling Tools International, a Leading Oilfield Services Company, to List on Nasdaq through Business Combination with ROC Energy Acquisition Corp.
Drilling Tools International Holdings, Inc. ("DTI" or the "Company") has entered into a definitive business combination agreement with ROC Energy Acquisition
About this update from Drilling Tools International Corporation
[{"type":"text","content":"Drilling Tools International Holdings, Inc. (\"DTI\" or the \"Company\") has entered into a definitive business combination agreement with ROC Energy Acquisition Corp. (\"ROC\") (Nasdaq: ROC). Upon closing, the combined company (the \"Combined Company\") will be listed on the Nasdaq under the new ticker \"DTI\".Headquartered in Houston, Texas, with roots dating back to 1984, DTI manufactures and provides a differentiated, rental-focused offering of tools used for horizontal and directional drilling. DTI has been majority owned by an affiliate of Hicks Equity Partners LLC and led for almost 10 years by CEO Wayne Prejean and an experienced management team.DTI expects to achieve strong EBITDA margins of over 30% in 2022 and 2023 with consistent free cash flow generation, supported by its leading scale, market position and blue-chip customer base.The transaction implies an enterprise value of approximately $319 million, which equates to 5.5x projected 2023 adjusted EBITDA of $58 million and 7.8x estimated 2022 adjusted EBITDA of $41 million; an attractive entry valuation multiple for investors.The transaction is expected to provide net cash proceeds of up to approximately $217 million, including approximately $209 million of cash from ROC's trust account, before the impact of potential redemptions therefrom, and $45 million of cash from a common stock PIPE, which is expected to include meaningful participation by Fifth Partners, an affiliate of ROC's sponsor.Hicks Equity Partners and other existing DTI shareholders will reinvest over 95% of their equity holdings into the Combined Company to maximize cash on balance sheet.DTI's streamlined capital structure positions it to lead consolidation of the small-cap oilfield services market. DTI expects to benefit from a zero-debt balance sheet and a robust cash position, with common equity only and no warrants. The transaction is expected to close in the second quarter of 2023.DTI has a proven acquisition history and a strong pipeline of acquisition targets, which it expects to further pursue with the proceeds raised from this transaction.HOUSTON and DALLAS , Feb. 14, 2023 /PRNewswire/ -- Drilling Tools International Holdings, Inc. (\"DTI\" or the \"Company\"), a leading oilfield services company that rents downhole drilling tools used in horizontal and directional drilling, and ROC Energy ...