UAE’s ADNOC Drilling, Alpha Dhabi Holding to become majority shareholders in Gordon Tech

ADNOC Drilling, a subsidiary of the Abu Dhabi National Oil Company (ADNOC), along with Alpha Dhabi Holding, announced a significant expansion of their investment in the oil and gas engineering sector.

Through their joint venture, Enersol, the companies have agreed to acquire an additional 42.2 per cent equity stake in Gordon Technologies for $270m. This purchase brings Enersol’s total holding in the company to a commanding 67.2 per cent, making it the majority shareholder.

Strategic Acquisition Expands Influence

The transaction, detailed in a regulatory filing on the Abu Dhabi Securities Exchange (ADX), builds upon previous investments in Gordon Technologies.

Alpha Dhabi, a subsidiary of Abu Dhabi’s International Holding Company (IHC), initially acquired a 25 per cent stake in Gordon for $164m in November 2022.

Earlier this year, ADNOC Drilling and Alpha Dhabi formed the Enersol joint venture, with Alpha Dhabi contributing its 25 per cent stake to the partnership.

 

View this post on Instagram

 

A post shared by Gordon Technologies LLC (@gordontechnologies)

The latest stake acquisition maintains the valuation metrics set during the initial purchase earlier this year.

Upon completion of the deal, approximately 80 per cent of the $270m consideration will be paid, with the remaining balance expected to be settled over the next two years, contingent on certain performance criteria being met.

Enhancing market position

Prior to this agreement, Gordon Technologies, based in Louisiana, was primarily owned by Houston-based private equity firm Pelican Energy Partners. The acquisition by Enersol marks a strategic move to solidify its influence in the oil and gas engineering market.

In a statement, the companies highlighted the financial robustness and growth prospects of Gordon Technologies. “Gordon is debt-free, and its acquisition is economically accretive to Enersol, enhancing profitability, valuation multiples, cash flow generation, and dividend potential. The FY2023 free cash flow yield exceeds 10 per cent,” the statement noted.

Future growth and investments

Enersol, the joint venture between ADNOC Drilling and Alpha Dhabi, plans to continue its growth trajectory by targeting additional acquisitions and investments that can enhance market value and operational efficiencies.

This approach is expected to bolster Enersol’s position within the industry, driving significant value for stakeholders.

This move underscores the commitment of ADNOC Drilling and Alpha Dhabi Holding to expanding their footprint in the global energy sector, leveraging their resources to acquire high-value assets and optimise operational performance.

Read: UAE’s ADNOC pays off $1.19bn to ADNOC Distribution bondholders