M1 Capital acquires two drilling equipment firms

The firm is structuring the financing for the acquisition of two oil and gas drilling equipment companies in the US for $82m, and has agreed to acquire another in China.

M1 Capital Group, a direct investment and merchant banking company with offices in Shanghai and New York, is acquiring two US oil and gas drilling equipment companies for $82 million (€51 million) through Integrated Drilling Equipment (IDE), a company created for the acquisition.

 

The companies are IEC Systems and Advanced Rig Services, Houston-based sister companies that operate in complementary vertical segments of the drilling industry, the firm said.

 

Robert Abbanat, managing director of M1 Capital Group, told PEO that IDE is also looking to acquire FPI Group, a Chinese manufacturer of rig parts for $39 million. He said the details of the acquisition have been agreed and the deal will complete within two to three months.

 

The firm said that FPI’s acquistion will enable IDE to take advantage of leading technology from the US and China’s low costs of manufacturing. The integrated company will be the second largest land-based drilling rig manufacturer in the world in terms of capacity, M1 Capital said.

 

Abbanat said that the firm plans to take IDE public in the coming weeks through a reverse merger with a publicly traded shell company. This will be done simultaneously with the acquisitions of IEC and Advanced Rig Services.

 

Theodore Swindells, principal of M1, said in a statement that through the acquisition of the three companies, “IDE will offer customers a unique ‘one-stop-shop’ for complete land-based drilling rigs, rig parts, drilling equipment and rig electrical systems”.

 

M1 Capital makes direct investments and organises investments on behalf of strategic investors including institutional investors and hedge fund investors. The firm invests in a variety of sectors and focuses on deals in core industrial sectors such as manufacturing, retailing, natural resources, processing, distribution and energy.

 

The firm provides expansion capital and other financial services to companies in various countries. It has operated in China since 2006.