- Drilling Tools International ("DTI"), with roots dating back to
1984, is a leading oilfield services company that manufactures and
provides a differentiated, rental-focused offering of tools for use
in horizontal and directional drilling in the oil and gas
industry
- The PIPE transaction, which totaled $40.8 million, included meaningful participation
by Fifth Partners, an affiliate of ROC's sponsor, as well as DTI's
existing preferred shareholders
- The transaction generated $25.9
million of cash from a common stock PIPE and $1.7 million of cash from ROC's trust account,
after giving effect to shareholder redemptions
- Existing DTI shareholders elected to reinvest $10.8 million of the cash they were to receive
from the merger into a common stock PIPE and affiliates of ROC's
sponsor reinvested the $4.1 million
owed to them under convertible promissory notes into the common
stock PIPE
- As a result, existing DTI shareholders rolled over 100% of
their common shares and over 98% of their preferred shares into
common stock of the combined company
- Affiliates of Hicks Equity Partners and other existing DTI
shareholders own approximately 73.0% of DTI immediately following
the transaction
- DTI utilized a portion of the proceeds from the transaction to
repay all amounts outstanding under DTI's revolving credit
facility
- The transaction positions DTI, which has a proven acquisition
history and strong pipeline of M&A targets, to further pursue
accretive consolidation efforts within the small-cap oilfield
services market
- DTI is expected to benefit from a streamlined capital
structure, with no warrant overhang, a strong, debt-free balance
sheet, competitive scale with operations from 22 locations across
North America, Europe and the Middle East, and a blue-chip customer base
- Drilling Tools International Corp. common stock is expected to
begin trading on Nasdaq at market open on June 21, 2023 under the ticker "DTI"
HOUSTON, June 20,
2023 /PRNewswire/ -- Drilling Tools
International Holdings, Inc., a leading oilfield services company
that manufactures and provides a differentiated, rental-focused
offering of tools for use in horizontal and directional drilling,
announced today that it completed its business combination with ROC
Energy Acquisition Corp. ("ROC"). The combined company will operate
under the name Drilling Tools International Corp. ("DTI" or the
"Company").
Commencing June 21, 2023, at the
open of trading, DTI's common stock will trade on the Nasdaq
Capital Market ("Nasdaq") under the symbol "DTI". The Company will
continue to be led by Wayne Prejean,
Chief Executive Officer, and David
Johnson, Chief Financial Officer, alongside the rest of the
current DTI management team.
The transaction was approved by ROC's shareholders at a special
meeting held on June 1, 2023 (the
"Special Meeting"). Over 83% of the votes cast on the business
combination proposal at the Special Meeting were in favor of
approving the business combination. ROC's shareholders also voted
to approve all other proposals presented at the Special
Meeting.
"We are enthusiastic about what lies ahead for DTI as we begin
our next chapter as a publicly-traded company," said Wayne Prejean, Chief Executive Officer of DTI.
"We close this transaction in a strong strategic position, with
zero debt and poised to execute on a pipeline of growth
opportunities within our core competency. We could not have reached
this point without the dedication and support of our employees,
customers and partners, for whom we are grateful. Thank you
all."
Daniel Kimes, Chief Executive
Officer of ROC added, "The merger between ROC and DTI is the
culmination of an incredible amount of work and trust between both
parties. We share the belief that it is a very advantageous time to
go public. Secular trends in the energy industry point towards
increased activity levels across the globe, which will help drive
organic growth for DTI. Further, the oilfield services sector is
ripe for consolidation, which will spur inorganic growth through
M&A. DTI has the balance sheet and the distribution network to
make it a natural acquiror in the sector. Finally, the shared
vision, industry dynamics and trust in management is why we've
committed significant PIPE capital in support of the Company."
Transaction Overview
The transaction generated
$25.9 million of cash from a common
stock PIPE and $1.7 million of cash
from ROC's trust account, after giving effect to shareholder
redemptions. In addition, existing DTI shareholders elected to
reinvest $10.8 million of the cash
they were to receive in the merger into the common stock PIPE, and
affiliates of ROC's sponsor reinvested the $4.1 million owed to them under convertible
promissory notes into the common stock PIPE. The PIPE transaction,
which totaled $40.8 million, included
meaningful participation by Fifth Partners, an affiliate of ROC's
sponsor, as well as DTI's existing preferred shareholders. A
portion of the net proceeds of the transaction was used to repay
all amounts outstanding under DTI's revolving credit facility,
leaving DTI with zero indebtedness under that facility at
closing.
The public listing enables the Company, which has a proven
acquisition history and a strong pipeline of M&A targets, to
further pursue its strategic consolidation opportunities within the
small-cap oilfield services market. DTI expects to benefit from a
strong balance sheet, streamlined capital structure, a global
footprint of facilities and a blue-chip customer base, which are
expected to support continued growth and value creation.
Advisors
Bracewell LLP served as legal advisor to DTI.
Winston & Strawn LLP acted as legal advisor to ROC. Jefferies
served as capital markets advisor and private placement agent to
ROC. Kirkland & Ellis LLP acted as legal counsel for Jefferies.
EarlyBirdCapital, Inc. served as financial advisor to ROC.
About Drilling Tools International
DTI (Nasdaq: DTI)
is a Houston, Texas based leading
oilfield services company that manufactures and rents downhole
drilling tools used in horizontal and directional drilling of oil
and natural gas wells. DTI operates from 22 locations across
North America, Europe and the Middle East. DTI's largest shareholder is an
affiliate of Hicks Equity Partners LLC. To learn more about DTI
visit: www.drillingtools.com.
About ROC Energy Acquisition Corp.
ROC was a blank
check company formed for the purpose of effecting a merger, capital
stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination with one or more businesses. While
ROC could have pursued an acquisition in any business industry or
sector, it concentrated its efforts on the traditional energy
sector in the U.S. ROC was led by Chief Executive Officer
Daniel Jeffrey Kimes and Chief
Financial Officer Rosemarie
Cicalese. To learn more, visit: https://rocspac.com.
Forward-Looking Statements
This press release may
include, and oral statements made from time to time by
representatives of the Company may include, "forward-looking
statements" within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Statements regarding the business combination
and the financing thereof, and related matters, as well as all
other statements other than statements of historical fact included
in this press release are forward-looking statements. When used in
this press release, words such as "anticipate," "believe,"
"continue," "could," "estimate," "expect," "intend," "may,"
"might," "plan," "possible," "potential," "predict," "project,"
"should," "would" and similar expressions, as they relate to DTI,
ROC, or the Company, or their respective management teams, identify
forward-looking statements. These forward-looking statements also
involve significant risks and uncertainties, some of which are
difficult to predict and may be beyond the control of DTI, ROC, and
the Company. These risks could cause the actual results to differ
materially from the expected results. Factors that may cause such
differences include, but are not limited to: (1) the outcome of any
legal proceedings that may be instituted in connection with the
business combination, (2) the risk that the business combination
disrupts current plans and operations of DTI, (3) the inability to
recognize the anticipated benefits of the business combination,
which may be affected by, among other things, competition, the
ability of the Company to grow and manage growth profitably,
maintain relationships with customers and suppliers and retain key
employees, (4) costs related to the business combination, (5) the
ability to continue meeting stock exchange listing standards
following consummation of the business combination, (6) changes in
applicable laws or regulations, (7) the possibility that the
Company may be adversely affected by other economic, business,
and/or competitive factors, (8) the impact of the global COVID-19
pandemic, and (9) other risks and uncertainties separately provided
to you and indicated from time to time described in filings and
potential filings by ROC or the Company with the Securities and
Exchange Commission ("SEC"). In addition, there are risks and
uncertainties described in the definitive proxy
statement/prospectus/consent solicitation statement related to the
business combination filed with the SEC by ROC on May 12, 2023 (the "Proxy Statement"). Such
forward-looking statements are based on the beliefs of management
of DTI, ROC and the Company, as well as assumptions made by,
and information currently available to, DTI's, ROC's and the
Company's management. Actual results could differ materially from
those contemplated by the forward-looking statements as a result of
certain factors detailed in the Proxy Statement. All subsequent
written or oral forward-looking statements attributable to the
Company or persons acting on its behalf are qualified in their
entirety by this paragraph. Forward-looking statements are subject
to numerous conditions, many of which are beyond the control of
each of DTI, ROC, and the Company, including those set forth in the
Risk Factors section of the Proxy Statement. The Company undertakes
no obligation to update these statements for revisions or changes
after the date of this release, except as required by law.
References to a debt-free balance sheet refer to borrowings under
DTI's revolving credit facility.
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SOURCE ROC Energy Acquisition Corp.