Blackstone to buy drill parts maker Ulterra Drilling Technologies

Blackstone Group reportedly has plans to purchase Texas-based manufacturer of drill parts and downhole tools Ulterra Drilling Technologies in a $700m deal.

Two sources familiar with the matter told Reuters that the private equity firm is acquiring Ulterra from another private equity firm American Securities.

American Securities acquired Ulterra in 2016.

Data from oilfield consultancy Spears & Associates indicates that Ulterra was the fifth leading player in the global drill bits industry in 2017. It had around $200m in revenue or 8% of the share in the global market last year.

According to the consultancy firm, Schlumberger leads the global drill bit market with an estimated $787m in revenue for 2017. This was followed by Baker Hughes, Halliburton and National Oilwell Varco.

One of the sources told the news agency that the purchase of Ulterra is being supported through a debt facility, which is currently being pre-marketed before a formal launch.

Ulterra is one of the many oilfield services firms reportedly being sold as increased drilling activity and higher oil prices have encouraged owners to seek buyers.

Among the many transactions seen in the oilfield services segment in recent days include the sale of Magnum Oil Tools, a downhole technology firm, to Nine Energy Services for $493m. In addition, there was the acquisition of offshore oil and gas platforms equipment provider EnerMech by Carlyle Group from Lime Rock Partners for an undisclosed amount.