Flotek Completes Acquisition of CAVO Drilling Motors
Flotek Industries has completed its acquisition of the remaining fifty percent partnership interest in CAVO Drilling Motors for $12.5 million cash. The transaction was financed by expanding Flotek's equipment term loan facility and using existing capacity under the revolving line of credit.
CAVO offers a complete line of competitively priced high performance mud motors for the drilling industry. CAVO specializes in the sale and rental of quality drilling mud motors and other downhole equipment used in straight-hole, directional and workover drilling applications. Headquartered in Houston, Texas, CAVO serves domestic and international customers. The company was formed by a group of oil field technical professionals with extensive drilling motor knowledge and experience in design, engineering, manufacturing, sales, rentals, quality control and technical support.
"Our drilling tool group began purchasing motors from CAVO in 2005 and based on the superior performance of the motors Flotek acquired an initial 50% partnership interest in CAVO in January of this year," stated Jerry Dumas, Chairman and CEO of Flotek Industries. "We view expansion of our drilling tool rental business to be the most significant margin growth driver in the drilling segment over the next years. Full ownership of CAVO will allow us to grow the mud motor rental business rapidly and cost effectively."
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