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SDI could change hands at USD 500mn valuation: Reuters
Posted on Friday, 10 August 2018 09:28
The Van Steenwyk family is exploring a sale of its Texan directional drilling firm Scientific Drilling International (SDI) in a deal expected to be worth more than USD 500.00 million, Reuters reported.

Citing people familiar with the matter, the news provider noted a sales process has only just begun and both strategic players and financial sponsors have been invited to bid for the firm.

SDI has been active since 1969 and is now billed as a leading provider in the global wellbore navigation market, as well as the US directional services industry.

The company has a presence in 40 locations across 26 countries and claims to be the only supplier of complete navigation capabilities to the energy sector.

SDI has been controlled by the Van Steenwyk family for more than 30 years and is said to be working with investment bank Tudor Pickering & Holt & Co on the sales process.

Sources declined to elaborate on the price tag for the firm when asked by Reuters but did say private equity investors will likely be interested in the potential target to buy, grow and eventually take the company public.

Reuters cited market researcher Spears & Associates as saying SDI is the fourth largest directional-drilling service provider by 2017 revenue worldwide.

The group sits behind Schlumberger, Baker Hughes and GE and Halliburton.

SDI’s precision-drilling capabilities operate in an advanced technology market that is projected to have USD 3.57 billion in revenue this year, Reuters observed.

According to the news provider, a sale comes as oilfield service firms are reaping benefits from rising crude oil prices, with production in the industry at its highest level in decades.

However, that being said, some businesses in the sector are still tied into long-term contracts made when prices were at the lower-end of the scale.

Zephyr, the M&A database published by Bureau van Dijk, shows there have been 547 deals targeting oil and gas extraction firms announced worldwide since the start of 2018.

Nine such transactions are worth USD 2.00 billion, or more, with the top four announced or completed purchases being worth in excess of USD 10.00 billion.

The largest deal involves Energy Transfer Equity buying Energy Transfer Partners for USD 27.19 billion.

© Zephus Ltd