ADNOC Drilling and Alpha Dhabi Holding announced today that their joint venture Enersol RSC LTD will acquire an additional 42.206 percent equity stake in Gordon Technologies for a consideration of around $270 million, making the joint venture the majority equity holder.
The $270 million consideration depends on a valuation in line with the one underpinning the initial 25 percent stake which the company announced in January 2024.
Upon closing, Enersol will fund 80 percent of the consideration for the additional stake. Moreover, it will fund the remaining 20 percent in the next two years, subject to certain performance conditions. The company also noted that the closing of the transaction is subject to customary regulatory approvals.
The ADNOC Drilling and Alpha Dhabi Holding joint venture’s acquisition is economically accretive from profitability, valuation multiple, cash flow generation, and dividend potential standpoint. In addition, the joint venture expects an FY2023 free cash flow yield of more than 10 percent. Enersol has been actively advancing plans to acquire and invest in multiple businesses to foster a growing ecosystem that enhances its market value and improves operational efficiencies.
Therefore, its acquisition of an additional stake in Gordon Technologies will allow it to expand its operations. Hence, the company is the leading provider of measurement while drilling (MWD) technology in the oil and gas industry. The technology measures key information near the drill bit and transmits data to the surface without interrupting normal drilling operations.
Notably, Gordon Technologies has completed setting up its Abu Dhabi business. The company now aims to start field operations in the MENA region in the second quarter of 2024.
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