Drilling Tools International to become public in ROC Energy Acquisition pact

Drilling Tools International and ROC Energy Acquisition (ROC) announced a definitive agreement for a business combination that will result in DTI becoming a U.S. publicly listed company. Upon closing of the transaction, the combined company is expected to be listed under the new ticker symbol (DTI). The business combination implies a combined pro forma enterprise value of approximately $319M, which equates to 5.5x projected 2023 adjusted EBITDA of $58M and 7.8x estimated 2022 adjusted EBITDA of $41M. The transaction is expected to provide net cash proceeds of up to approximately $217M, including approximately $209M of cash from ROC’s trust account, before the impact of potential redemptions therefrom, and $45M of cash from a common stock PIPE, which is expected to include meaningful participation by Fifth Partners, an affiliate of ROC’s sponsor. Hicks Equity Partners and other existing DTI shareholders will reinvest over 95% of their equity holdings into the combined company for maximum cash on balance sheet. DTI’s capital structure positions the company to lead the consolidation of the small-cap oilfield services market. The boards of directors of each of DTI and ROC have unanimously approved the transaction. The transaction will require the approval of the stockholders of ROC and is subject to satisfaction or waiver of the conditions stated in the merger agreement and other customary closing conditions, including the receipt of certain regulatory approvals. The transaction is expected to close in the second quarter of 2023.