Blue Wolf Capital Partners has acquired a majority interest in Petrosmith, a provider of production equipment and oilfield tubular goods to the domestic oil and gas industry.
Petrosmith manufactures storage tanks (including oilfield storage tanks and wash tanks) and vessels (including heater treaters, separators and vapor recovery towers) used by large exploration and production (E&P) companies primarily in the Permian Basin, Eagle Ford and Mid-Continent region. The company also sells a variety of new and used oilfield tubular goods (drill pipe, casing and tubing commonly referred to as OCTG) and provides an array of OCTG refurbishment services. Petrosmith also provides plug and abandonment services to E&P companies.
The company has state-of-the-art coating facilities that service the company’s tank, vessel and OCTG divisions. Petrosmith, founded by Cliff Smith in 1983, has approximately 300 employees and is headquartered in Abilene, TX (www.petrosmith.com).
Mr. Smith will remain with Petrosmith as Chief Executive Officer and will retain an ownership stake in the company. “We are extremely pleased to have partnered with Blue Wolf and are eager to collaborate with them,” said Mr. Smith. “Our new partners have shown a commitment to supporting our employees and providing us with the capital and guidance to execute on our growth plan. We believe that this new partnership will be instrumental in helping our company extend its leading position in the market.”
“Cliff and his team have built a business that is recognized in the industry for the quality and reliability of its products and the flexibility of its manufacturing process to meet evolving customer demands,” said Blue Wolf Partner Charlie Miller. “Petrosmith is well positioned to benefit from the ongoing recovery in the domestic energy market.”
Blue Wolf invests in companies in which management of relationships with complex constituencies – such as government and labor – can change organizations and create value. The firm’s investment criteria are minimum revenues of $25 million; minimum transaction size of $20 million; and a minimum investment size of $10 million. The firm focuses its efforts on companies based in the United States and Canada. Blue Wolf is headquartered in New York (www.blue-wolf.com).
The buy of Petrosmith is the first investment made by Blue Wolf Capital Fund IV which closed in October 2017 with $540 million of capital commitments. It is also Blue Wolf’s second investment in the energy services sector, following the firm’s December 2016 acquisition of Extreme Plastics Plus, an environmental containment company that provides lining, above ground storage tanks, and secondary steel wall containment systems to the domestic oil and gas industry.
© 2018 Private Equity Professional | February 12, 2018
