Dril-Quip, a provider of engineered offshore and onshore oil and gas equipment and services, has signed a definitive merger agreement with Innovex Downhole Solutions, a provider of mission-critical technologies for the oil and gas industry.

The all-stock transaction will establish an energy industrial platform, which will combine the two companies' complementary product portfolios, service quality, global infrastructures and customer relationships.

Upon completion, Dril-Quip stockholders will own approximately 52% of the new entity while Innovex stockholders will have a 48% stake, on a fully diluted basis.

The combined company will offer solutions for both onshore and offshore applications. It is projected to have more than $1bn in annual revenue and $221m in adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA), including synergies, for fiscal 2023.

Furthermore, the new entity will boast a strong balance sheet, with a pro forma year-end 2023 net cash position of $99m.

Innovex CEO Adam Anderson will lead the new company as CEO and join its board of directors.

Innovex is majority owned by funds affiliated with Amberjack Capital Partners, which will hold approximately 43% of Innovex International, the new company name post-merger.

The common stock of the combined company will trade on the New York Stock Exchange while Dril-Quip's offshore products will retain their brand names.

Anderson said: “We are bringing together the great traditions and capabilities of Dril-Quip with Innovex’s proven operating model. By empowering the combined organization using Innovex’s collaborative ‘No Barriers’ culture, we will unleash the capabilities of the combined company to create a unique energy industrial platform with durable margins, low capital intensity and the potential for superior returns on capital throughout industry cycles.”

Subject to regulatory approval and Dril-Quip stockholder approval, the transaction is expected to close in the third quarter of 2024.

Dril-Quip president and CEO Jeffrey Bird said: “The multi-decade legacy and strong reputation of Dril-Quip’s technology, brand and expertise, paired with the customer-centric, innovative and execution-oriented cultures of both companies, will help us continue to manufacture and deliver innovative products and service to our customers and create opportunities for our employees.”

In November 2023, Dril-Quip was selected as a supplier of drill-through systems for Brazilian company Petrobras' pre-salt development wells.