Drilling Tools International (NASDAQ:DTI) said it has entered into a definitive agreement to acquire Saltire Energy Limited and Foxley Energy Limited, collectively known as Saltire, in a transaction designed to expand its international downhole tool rental operations and increase its exposure to Eastern Hemisphere markets.
The consideration includes approximately $80 million in cash and 17.4 million fixed shares of DTI common stock. The market value of the share consideration will vary with DTI’s stock price. DTI expects to fund the cash portion through new debt financing and borrowings under its existing credit facility.
International Expansion and Product Reach
DTI Chairman and Chief Executive Officer Wayne Prejean described Saltire as an international downhole tool rental company with operations across the North Sea, Middle East and other Eastern Hemisphere markets. Saltire rents bottom-hole assembly components, pipe and tubulars, and pressure-control equipment, among other tools.
Prejean said the acquisition would increase DTI’s Eastern Hemisphere exposure to about 40% of pro forma revenue, compared with approximately 18% in the second quarter of 2026. DTI’s Eastern Hemisphere revenue exposure was about 8% in 2024 and 14% in 2025, he said.
The combined company would have a rental fleet of more than 100,000 tools, up from roughly 63,000 for DTI on a standalone basis. Prejean said the companies have similar operating models, limited customer overlap and complementary geographic footprints.
DTI also sees an opportunity to introduce its ClearPath, Drill-N-Ream and Deep Casing technologies to Saltire’s customer base through Saltire’s distribution network. Prejean said Saltire brings established relationships with international operators and national oil companies that DTI historically has not served at scale.
According to figures cited by Prejean from Spears & Associates, the Eastern Hemisphere is expected to have about 910 active rigs and $69 billion in drilling and completion spending in 2026, with regional spending projected to reach approximately $88 billion by 2030. He said the Middle East is expected to lead regional rig-count growth.
Financial Expectations and Leverage Plan
Chief Financial Officer David Johnson said Saltire is expected to contribute approximately $50.4 million of run-rate revenue and $22.5 million of adjusted EBITDA, equating to an adjusted EBITDA margin of about 45%.
On a pro forma basis, DTI expects the combined company to generate:
- Approximately $205 million to $220 million in revenue;
- Approximately $58 million to $68 million in adjusted EBITDA;
- An adjusted EBITDA margin of 28% to 31%; and
- Approximately $33 million to $38 million in adjusted free cash flow.
Johnson said the transaction is expected to increase adjusted free cash flow by more than 80% relative to DTI’s 2026 guidance and pro forma expectations. Management expects the deal to be accretive to adjusted EBITDA margin and adjusted free cash flow per share in the first year after closing.
DTI said those projections do not rely on cost reductions, revenue synergies or pricing gains. Potential commercial pull-through, technology deployment and selective operating efficiencies would be incremental to the company’s base expectations.
Based on the transaction methodology outlined in its announcement materials, DTI said the purchase price represents about 5.5 times Saltire’s run-rate adjusted EBITDA. Johnson said pro forma net debt to trailing 12-month adjusted EBITDA is expected to be about 2.2 times at closing.
While that level is at the upper end of DTI’s historical comfort range, Johnson said management expects the combined business’s free cash flow generation to reduce net leverage to approximately one times within 24 months of closing. Until that target is reached, debt repayment will be the primary use of free cash flow alongside high-return growth investments, he said.
Saltire Management and Ownership Alignment
Saltire Founder and CEO Mike Loggie said the company’s family owners were not seeking an exit but instead wanted a partner that shared its focus on service, reliability and technical expertise. The Loggie family will retain an approximately 30% ownership stake in the combined company, according to DTI.
All members of Saltire’s management team are expected to remain with the combined company after closing. Loggie said he also plans to remain involved to support the transition with customers and employees, while Prejean will continue as DTI’s chairman and CEO.
During the question-and-answer session, Prejean said Saltire operates with a lean overhead structure, concentrated work in certain locations and longer-term contracts that require fewer tool “touches” than DTI’s North American operations. Johnson added that Saltire’s product mix, contract profile and operating efficiency contribute to its higher margins and cash-flow profile.
Management emphasized that the acquisition remains subject to closing conditions and that projected financial and operating benefits are forward-looking expectations.
About Drilling Tools International (NASDAQ:DTI)
Drilling Tools International Corp. (NASDAQ: DTI) is an oilfield services company that provides downhole drilling tools and related equipment to exploration and production companies, drilling contractors and other energy-sector customers. The company’s offerings are designed for use in onshore and offshore drilling operations, including applications involving directional drilling, well construction and completion.
Its product portfolio includes drill collars, heavy-weight drill pipe, stabilizers, subs, drilling jars, downhole motors and other specialized drilling tools.
