KRG Capital Partners Completes the Recapitalization of Varel International
KRG Capital Partners, a Denver-based private equity firm, has completed the recapitalization of its portfolio company Varel International (Varel), a worldwide designer and manufacturer of roller-cone and polycrystalline diamond compact ("PDC") drill bits for the oil & gas and mining industries.
Apollo Investment Corporation led the $115 million senior unirate loan and junior subordinated debt with American Capital Strategies participating. Varel also structured a $10 million asset-based revolver with Fifth Third Bank to complete the financing. KRG maintains its majority ownership of the Company.
Founded in 1947, Varel is a leading designer and manufacturer of roller-cone and PDC drill bits for the global oil & gas and mining industries. A global business, Varel markets drill bits in 85 countries and generates approximately half of its revenues outside North America. Varel's major customers include ExxonMobil Corporation, Occidental Petroleum Company, Saudi Arabian Oil Company, Total, Sonatrach, Kuwait Oil Company and Royal Dutch Shell plc. The Company is headquartered in Carrollton, TX. It has manufacturing facilities in Carrollton; Houston, TX; Matamoros, Mexico; and Tarbes, France; as well as sales offices throughout the world. Varel has more than 1,000 employees and currently generates in excess of $140 million of revenue.
Founded in 1996, KRG is a Denver-based private equity firm that currently has over $2.0 billion in cumulative capital deployed and remaining committed capital and is investing from its current $715 million Fund III. KRG specializes in acquiring and recapitalizing unique and profitable middle-market companies. The firm seeks investment opportunities for its partners where KRG can work in concert with owners and operating managers who are committed to expanding their companies and becoming industry leaders. The result is a partnership that focuses on creating a significantly larger enterprise through a combination of internal growth and complementary add-on acquisitions. Since inception, KRG has invested in 26 platform companies and has completed 70 add-on acquisitions for those platforms.
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