Allis-Chalmers Closes DLS Acquisition
Allis-Chalmers Energy Inc. on Monday announced the closing of its acquisition of DLS Drilling Logistics and Services Corporation, from Bridas International Holdings Limited, Bridas Central Company Limited and Associated Petroleum Investors Limited. The acquisition purchase price consisted of approximately $93.7 million in cash, 2.5 million newly issued shares of Allis-Chalmers' common stock and approximately $8.6 million of assumed debt.
Headquartered in Buenos Aires, DLS is a major provider of services for drilling, workover/completion and repair of oil and gas wells in Argentina and Bolivia. With over 1,500 employees, DLS currently operates a fleet of 51 rigs, including 21 drilling rigs, 18 workover rigs and 12 pulling rigs in all major basins in Argentina and Bolivia.
Micki Hidayatallah, Allis-Chalmers' Chairman and Chief Executive Officer stated, "We are extremely excited about closing the DLS acquisition. We now have a significant entry into the international drilling, workover and production business, and we expect this entry to facilitate our international expansion of services. We plan to grow DLS' strong South American drilling business, and to capitalize on its oilfield market presence by cross-selling our directional drilling, production services, underbalanced drilling, casing and tubing installation and rental fleet services to DLS' present and future customers outside the United States." Mr. Hidayatallah added, "We are particularly pleased with DLS' strong recent financial performance. DLS has informed us that its estimated, preliminary second quarter 2006 results include revenues of $43.2 million, income from operations of $6.3 million, net income of $2.7 million and EBITDA of $8.4 million. We look forward to an even stronger performance resulting from combining Allis-Chalmers' and DLS' operations."
As part of the acquisition, Alejandro Pedro Bulgheroni and Carlos Alberto Bulgheroni have joined the Allis-Chalmers board of directors, filling vacancies created by the resignations of Jens H. Mortensen, Jr. and Thomas O. Whitener, Jr. With respect to these changes to the Allis-Chalmers' board, Mr. Hidayatallah stated, "We thank Jens Mortensen and Thomas Whitener for their outstanding service on our board, and we look forward to new direction, opportunities and management input from Carlos and Alejandro Bulgheroni. This marks the beginning of an exciting new era in our company's history based in large part on forthcoming management contribution from Carlos and Alejandro and their renowned international business success and experience."
In connection with this acquisition, RBC Capital Markets acted as exclusive financial advisor to Allis-Chalmers, and Simmons & Company International advised the sellers.
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