Maxim Labkouski
Drill Quip (NYSE:DRQ) +4.7% post-market Monday after agreeing to merge with Innovex Downhole Solutions (INVX) in an all-stock deal, creating a diversified energy industrial platform with pro forma revenues in excess of $1 billion and adjusted EBITDA for fiscal 2023 of 221 million dollars.
The company is expected to merge derives 56% of its revenues from international and offshore markets and 44% from onshore markets in the United States and Canada.
Dril-Quip (DRQ) said it expects the merger to provide substantial and immediate earnings and free cash flow accumulation, with expected pro forma adjusted EBITDA margins above 20% including synergies, achieving approximately $30 million in synergies of annual costs within 24 months of the deal closes and commercializes Dril-Quip’s onshore Canadian wellhead business in the U.S. onshore market through Innovex’s (INVX) sales and operations infrastructure.
Innovex (INVX) CEO Adam Anderson will become CEO of the combined company and join its board of directors, while current Innovex CFO Kendal Reed will serve as CFO of the combined company.