Varel Acquires Downhole Products Plc
Strategic Objective Realized: New Holding Company Created for Future Acquisitions and Growth
(Dallas, Texas - 21 April 2008) - Varel International announced today that it has acquired Aberdeen-based, Downhole Products Plc (DHP), a leader in high-end centralizers and reamer shoes utilized in the construction and completion of oil and gas wells. The acquisition was supported by Arcapita, Varel's primary investor, with financing support made possible through the Royal Bank of Scotland (RBS). Additionally, as part of this acquisition, a new holding company called Varel International Energy Services (VIES) was established. This holding company owns both Downhole Products and Varel International, the world's fastest growing drill bit company.
"This acquisition demonstrates the continued growth and success we are experiencing with our new investors, Arcapita," said Jim Nixon, President and CEO of Varel International. "This transaction includes two important milestones for our company: the creation of Varel International Energy Services-our new holding company-and our first acquisition under Arcapita. Both activities have been part of our strategic growth plan. We appreciate the support given by Arcapita and RBS, our financing partner, with regards to this transaction. Their hard work and cooperation allowed us to close the transaction within a compressed timetable."
Acquisition Will Strengthen Global Sales of DHP Products
DHP was founded in 1994 by Bill Barron, Alistair Clark and Ian Kirk, who will lead the operations of Downhole Products as a separate division of Varel International Energy Services. The company's range of patented centralizers, reamer shoes and well completion products provide significant benefits to end users, particularly in challenging extended reach wells. The new relationship with VIES will provide DHP financial and operational support, which will help accelerate growth with current and new customers, as well as increase the company's ability to deliver innovative solutions for customers responsible for well completion.
Presently, DHP has a global presence with affiliates located in Houston and Venezuela. The firm has achieved significant growth in the past few years by leveraging innovative technology with several global blue chip customers.
"As a result of the acquisition," said Nixon, "we will leverage Varel's established network of global sales and distribution resources to strengthen the usage and sales of DHP products around the world."
"We are really pleased that a company like Varel with such forward-thinking has acquired Downhole Products-this will help accelerate our growth in both existing and new market places," said Ian Kirk, one of the founders of Downhole Products. "There are many synergies between the groups that will also give rise to new innovation, job security and new employment opportunities. We look forward to exciting times ahead as a Varel International Energy Services Company."
Downhole Products to Exhibit with Varel International at Industry's Largest Event-OTC .08
DHP personnel will be available, and their products will be on display, in the Varel International booth, #10551, in Reliant Stadium at the 2008 Offshore Technology Conference scheduled 5 - 8 May at Reliant Park in Houston.
"As the industry's largest conference, OTC is the ideal platform to showcase our new partnership with DHP and to strengthen global awareness for the company and their products," said Nixon. "DHP and Varel products complement each other very well; having them as a sister organization will provide incredible value to the global drilling industry."
About Varel International
Founded in 1947, Varel International is the world's largest independent supplier and the fifth largest company operating in the global oil & gas drill bit market. Headquartered in Carrollton, Texas, Varel services oil & gas, mining, and industrial markets with its comprehensive suite of roller cone and fixed cutter drill bits. The company employs more than 1,000 people and has manufacturing facilities in Carrollton, Texas; Houston, Texas; Matamoros, Mexico and Tarbes, France, as well as sales offices throughout the world. Varel's proprietary design capabilities, efficient manufacturing, and global sales force uniquely positions the company to provide high-quality drill bits that deliver excellent performance and value to its customer base. For more information, visit http://www.varelintl.com/.
About Downhole Products Plc
Founded in 1994 in Aberdeen, Scotland, Downhole Products Plc designs, manufactures and markets a wide range of technologically-advanced oilfield tools used in the construction and completion of oil and gas wells. Product offerings include high-end centralizers and reamer shoes for use in the running of well casing and completion strings. The company's proprietary products include BladeRunner, the company's flagship solid body centralizer; and three centralizer products Spir-o-lizer, Spir-o-mizer and Econ-o-glider, Pen-o-trator, a patented reamer shoe; and GRIPPY Cable Protectors. For more information, visit http://www.downhole.co.uk/.
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