Hicks Equity-Backed Oilfield Services Firm DTI to Merge with ROC Energy Acquisition in $319M SPAC Deal

ROC Energy Acquisition Corporation (ROC), a special purpose acquisition company (SPAC), and Drilling Tools International Holdings have agreed to merge in a deal that will enable the oilfield services provider to become a public company.

The deal values DTI, which is majority owned by Dallas-based Hicks Equity Partners, at approximately $319 million. The transaction is expected to provide net cash proceeds of up to about $217 million, including approximately $209 million held in trust before potential redemptions and $45 million of private investment in public equity.

Hicks Equity Partners and other existing DTI shareholders will reinvest over 95% of their equity holdings into the combined company.

There has been underinvestment in drilling, but an even bigger one for equipment, which means it will take quite a drastic oil demand cut before oil-field service providers like DTI take a hit. The risk that oil-field services demand will decline appears lower than the possibility that oil demand will fall.

Led by Wayne Prejean, Houston-based DTI’s customers include energy producers Chevron, ConocoPhillips and Occidental Petroleum Corp, as well as large services players such as Baker Hughes Co and SLB.

Jefferies LLC is serving as capital markets advisor and private placement agent to ROC. Kirkland & Ellis LLP is providing legal counsel for Jefferies LLC. EarlyBirdCapital, Inc. is serving as financial advisor to ROC Energy Acquisition Corp.

Bracewell LLP is serving as legal advisor to Drilling Tools International. Winston & Strawn LLP is serving as legal advisor to ROC.