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ADNOC Drilling Co., a unit of Abu Dhabi National Oil Company (ADNOC), and investment holding company Alpha Dhabi Holding said on Tuesday their joint venture (JV) Enersol RSC LTD has agreed to acquire an additional equity stake in oil and gas engineering company Gordon Technologies LLC for approximately $270 million.
The additional 42.2% stake will make Enersol the majority equity holder in Gordon with a total of 67.2%.
The acquisition price was based on a valuation in line with the one underpinning the initial 25% stake purchase announced in January 2024, the companies said in a regulatory disclosure on ADX.
Investment holding company Alpha Dhabi, a subsidiary of Abu Dhabi's International Holding Company, had acquired a 25% stake in Gordon Technologies for $164 million in November 2022. Early this year, the Abu Dhabi companies set up the JV with Alpha Dhabi contributing its 25% stake in Gordon to Enersol.
In the latest deal, approximately 80% of the consideration for additional stake acquired by Enersol will be funded upon closing. The remaining part of the consideration is expected to be paid in the next two years, subject to certain performance conditions.
Prior to this transaction, Louisiana-based Gordon was majority owned by Houston-based private equity company Pelican Energy Partners.
"Gordon is debt-free, and its acquisition is economically accretive to Enersol from a profitability, valuation multiple, cash flow generation and dividend potential standpoint, along with a FY2023 free cash flow yield of more than 10%," the statement said.
Enersol plans to acquire and/or invest in multiple businesses that will add market value and improve operational efficiencies, it said.
(Writing by Brinda Darasha; editing by Seban Scaria)
