Patterson-UTI to acquire Ulterra for $370M in cash, 34.9M shares

Patterson-UTI Energy (PTEN) has entered into a definitive agreement to acquire Ulterra Drilling Technologies for consideration of $370M of cash and 34.9M shares of Patterson-UTI common stock. Founded in 2005 and headquartered in Fort Worth, Texas, privately-owned Ulterra designs, manufactures, sells and rents PDC drill bits. With a global footprint, Ulterra supports customers in over 30 countries with sales, manufacturing, and repair facilities throughout North and South America, the Middle East, and Asia. In North America, Ulterra is a leading provider of PDC drill bits, with operations across the most active basins in the United States and Canada. Under the terms of the transaction, Patterson-UTI will acquire Ulterra Drilling Technologies, L.P. from affiliates of Blackstone Energy Partners (BX) on a debt-free basis for aggregate consideration of $370M of cash and 34.9M shares of Patterson-UTI common stock. Patterson-UTI intends to fund the $370M cash consideration using cash on hand and Patterson-UTI’s revolving line of credit. In connection with the transaction, Blackstone has entered into a voting agreement with NexTier Oilfield Solutions (NEX), whereby Blackstone will vote the shares of Patterson-UTI issued in the transaction and held by the stockholder at the time of the Patterson-UTI special meeting in a manner to facilitate the consummation of the merger between Patterson-UTI and NexTier. The pending transaction, which is expected to close in the third quarter of 2023, is subject to customary closing conditions and receipt of required regulatory approvals, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Act. The Ulterra business will continue to operate under the name Ulterra, and its headquarters will remain in Fort Worth, Texas.