Hicks Equity Partners has bought a majority stake in Directional Rentals. Financial terms were not disclosed. Lafayette, La.-based Directional rents tools to directional drilling companies for bottom hole assemblies used in onshore and offshore horizontal and directional drilling. Hicks Equity is the PE investment vehiclde of the Thomas O. Hicks family.
Hicks Equity Partners (“HEP”), the private equity investment vehicle of the Thomas O. Hicks family, today announced that it is leading an investor group that has acquired a majority interest in Directional Rentals, Inc., a privately held oilfield services company. Financial terms of the transaction were not disclosed.
Based in Lafayette, Louisiana with satellite locations in Houston, Texas, Casper, Wyoming and Bakersfield, California, Directional rents tools primarily to directional drilling companies for bottom hole assemblies used in onshore and offshore horizontal and directional drilling. The company’s rental equipment portfolio consists of nearly 5,000 drill collars, stabilizers and sub-assemblies in a wide range of sizes made from non-magnetic, nickel-based specialty metal and basic carbon steel.
Directional’s previous owners, Mike Domino, Jr. and Ronnie Russo have both retained minority equity stakes in the company. Mr. Domino, who joined Directional in 2009 and has been instrumental in the company’s recent growth and success, has been named Chief Executive Officer of Directional. Mr. Russo, who founded the company in 1984, will remain involved in the business. In addition, Wesley DeHaven has joined Directional as Chief Operating Officer and Chief Financial Officer.
HEP has significant experience in this segment of the oilfield services industry through its previous investment in Gammaloy, Inc. A group led by the Hicks family acquired Gammaloy in 1996 and sold the business to National Oilwell Varco in 2007 for more than 13 times its invested capital. William F. Goerner, the former Chief Executive Officer of Gammaloy, has also invested in Directional and joined the company’s Board of Directors. As part of the Directional transaction, Mr. Goerner and the Hicks family have contributed to Directional their ownership of Allegiant Tool & Machine, LLC, a company they founded that operates a facility in Bakersfield, California with 170 non-magnetic drill collars that services directional drilling companies operating in California and the western Rocky Mountains.
Thomas O. Hicks, Chairman and Chief Executive Officer of Hicks Equity Partners, said, “We are delighted to invest in Directional, an outstanding company in a sector we know exceptionally well as a result of our very successful investment in Gammaloy. We believe that new technologies that enable drillers to extract oil & gas from shale formations are a game changer for the energy sector and Directional is well-positioned to capitalize on this compelling trend. We are excited to partner with Mike Domino and his team, and to provide important capital, to accelerate Directional’s growth trajectory driven by the continuing strong demand for its equipment.”
Mr. Domino said, “We are proud that Directional has attracted Tom Hicks and his family, together with their investment partners, as our new majority owners. Throughout his distinguished career, Tom has created value through leading investments in a wide range of energy-related businesses. Our executive team is excited to begin working with Tom and the outstanding Board of Directors we have assembled to further enhance the products and services we offer our customers. In particular we are actively considering new locations to serve our customers as they expand into attractive oil-producing regions.”
Capital One Leverage Finance has provided Directional with a term financing facility that is fully available to help fund the company’s future capital expansion.
Energy Capital Solutions served as financial advisor to the sellers in connection with the transaction.
About Hicks Equity Partners
Hicks Equity Partners is the private equity arm for Hicks Holdings LLC, a holding company for the Thomas O. Hicks family’s assets. With 35 years of private equity experience, Mr. Hicks pioneered the “buy and build” strategy of investing and founded Hicks Muse Tate & Furst, which raised more than $12 billion of private equity across six funds and completed over $50 billion of leveraged acquisitions. HEP looks for established companies with proven track records, strong free cash flow characteristics, a strong competitive industry position and an experienced management team looking to partner with long-term capital.