Uralmash is Russia's leading manufacturer of heavy drilling rigs, and a significant producer of drilling tools. Major customers include Gazprom, LUKoil, TNK-BP, Surgutneftegaz, Burgaz, Sibneft, Rosneft and Tatneft. The Company's main manufacturing facilities are located in the Volga-Urals with additional facilities in Ekaterinburg, Perm, Kotovo, Pavlovsk, and Moscow.
This transaction, which closed on September 23, 2005, will have a transformational impact on Integra and increase its projected pro forma 2005 revenues from $120 million to $200 million.
Felix Lyubashevskiy, President and CEO of Integra and Co-Chairman of the Association of Oil and Gas Equipment Producers said, "The acquisition of Uralmash-Drilling Equipment and VNIIBT-Drilling Tools demonstrates Integra's desire to strengthen its business profile. Building upon our long-established, engineering technology and operations expertise, this combination will create a stable, consolidated oilfield service company able to deliver a leading offer to customers and the greater marketplace."
John Fitzgibbons, Chairman of Integra and President of Brookline Partners, a private investment firm that founded Integra, said, "We are attracted to the investment opportunities within the Russian oilfield service sector and look forward to making further investments in this space. All the pieces are in place for Integra to lead the inevitable change and consolidation that we foresee in the sector."
Mikhail Kosolapov, CEO of MNP Group, said, "We are delighted to complete the sale of Uralmash-Drilling Equipment and VNIIBT-Drilling Tools to Integra. Integra's planned injection of additional capital, the introduction of advanced oilfield technologies, and extensive marketing, will help these assets realize their full market potential. This sale is consistent with MNP's strategy of divesting its drilling equipment and other divisions unrelated to MNP's primary focus of offshore shipbuilding."
The acquired business will be headed by Vitaly Tkachev who has many years of experience in the oil and gas industry. His primary focus will be to develop business processes so that manufactured products and provided services will meet all customers' requirements.
Integra also announces the completion on September 23, 2005 of the private placement of $90 million of senior secured notes. JP Morgan acted as lead arranger and sole bookrunner. On October 11, 2005, Integra completed the private placement of convertible preferred stock resulting in net proceeds of $40 million.
Skadden, Arps, Slate, Meagher & Flom acted as counsel to Integra with respect to the financing. White and Case acted as counsel to Integra with respect to the Uralmash acquisition.
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