Cathedral Energy Services recently announced its acquisition of Rime Downhole Technologies for a total purchase price of approximately $41 million. Rime Downhole Technologies, based in Texas, specializes in manufacturing products for the downhole measurement-while-drilling industry.
Leading Pulser Solutions in the U.S. Onshore Market
According to Cathedral, Rime’s Slick-HD Pulser and Agilis Driver are considered to be the top-notch pulser solutions available in the U.S. onshore marketplace. This acquisition is expected to further strengthen Cathedral’s position in this industry.
The acquisition deal comprises of a $21 million cash payment, as well as $20 million in subordinated exchangeable promissory notes. These promissory notes can be exchanged for approximately 25 million common shares of Cathedral.
Continued Operation as an Independent Brand
Cathedral has confirmed that Rime will continue to operate as an independent brand. The founders of Rime, Manoj Gopalan and Robert Weber, will remain in key leadership positions within the company. This move aims to ensure a seamless transition and maintain the brand’s integrity.
Investment in Cathedral-owned Measurement-While-Drilling Equipment
As part of this acquisition, Cathedral plans to invest $5 million to $10 million in the development of its own measurement-while-drilling equipment. This strategic move will reduce their reliance on third-party MWD products, resulting in increased Adjusted EBITDAS and stronger profit margins.
The acquisition of Rime Downhole Technologies by Cathedral Energy Services represents a significant development in the downhole measurement-while-drilling industry. With Rime’s leading pulser solutions and Cathedral’s investment in developing their own MWD equipment, this partnership is set to drive growth and enhance profitability for both companies.