ESCO Corp. has completed its $325-million all-cash acquisition of Ulterra Drilling Technologies L.P., a manufacturer of advanced drilling devices used in oil-and-gas exploration. The purchase was announced in mid August, with ESCO indicating Ulterra would complement the range of its products and expand its customer base.
Portland, OR-based ESCO has two business units: the Engineered Product Group, anchored by a steel foundry, produces “wear solutions” for mining, construction, wood processing, and other resource and infrastructure industries; the Turbine Technologies Group produces super-alloy investment castings for aerospace, energy and turbocharger manufacturing.
Ulterra is a Fort Worth, TX, designer and manufacturer of polycrystalline diamond (PCD) compact drill bits. It has about 400 employees in Fort Worth and Leduc, Alb., who will join ESCO as a new business unit, headed by Johnny Everett, who had been CEO of the independent company.
“It has always been important to us that Ulterra become part of an organization that understands our business model and robust service culture,” Everett said in August. “At the same time, we were looking for a partner that would provide the resources and infrastructure to support further expansion. Joining ESCO means we will achieve both goals.”
PCD drill bits are engineered drilling cutters fitted with synthetic diamond disks, about 1/8-in. thick and 0.5 to 1 in. in diameter, and used to shear rock with a continuous scraping motion. PCD bits are reported to be especially effective at drilling shale formations.
ESCO noted that Ulterra has established a strong North American presence and is growing in Latin America and the Middle East. It estimates the market for oil-and-gas drill bits/consumables at $5 billion, and noted that the new holding will allow ESCO to benefit from “global trends toward unconventional oil-and-gas recovery.”
It added that its own ESCO global sales network will be able to penetrate new markets thanks to the Ulterra product line.
“At ESCO, we are looking for businesses that share our strategy of providing customers with highly engineered, quality wear parts and solutions,” according to Cal Collins, president and CEO. “Today, we add Ulterra as a strong and important part of our growth strategy. Its product offering and expanding global presence makes it an ideal addition to ESCO. Ulterra has an exceptional team and culture and shares ESCO's customer focus and commitment to quality.”