Flotek Industries, Inc has announced that it has entered into a Definitive Agreement to purchase substantially all of the assets of International Artificial Lift, LLC.
IAL is a developmental-stage company that specialises in the design, manufacturing and service of next-generation Hydraulic Pumping Units that serve to increase and maximise production for oil and natural gas wells. Founded and led by Larry Best, a 40 plus year veteran of hydraulic and electrical computerised controls and lift systems, IAL has developed patented and patent-pending designs and technology that provide Flotek with proprietary advances in hydraulic lift and control systems.
“We are delighted to welcome Larry and his team to the Flotek family and look forward to adding IAL’s advanced hydraulic technology to our growing array of production technologies,” said John Chisholm, Flotek’s Chairman, President and Chief Executive Officer. “Larry’s experience and expertise as an innovator in hydraulic pumping and lift technology not only creates a technology advantage for Flotek but it also instantly expands Flotek’s market through Larry’s contacts and reputation as a best-in-class hydraulic lift developer. This strategic acquisition also stands in support of our strategy to find leading niche technologies that will expand our market opportunities and that provide solid value for our shareholders.”
The acquisition of IAL provides Flotek with complete control over the manufacturing and service quality of a next-generation, proprietary design in the rapidly expanding Hydraulic Pumping Units market. The IAL/Flotek HPU design features continuous horsepower with a patent-pending synchronised lifting system that allows operators to produce more efficiently and at a significantly reduced cost compared to other hydraulic lift designs.
“The IAL team is delighted to join the Flotek family which will allow us to accelerate the commercialisation of the next-generation of Hydra-Lift pumping systems and assist John Chisholm, David McMahon and the team in their expansion of the production technologies business,” said Larry Best, President of International Artificial Lift, LLC. “We believe, regardless of the current market environment, that demand for efficient HPU systems will continue to grow meaningfully over the next several years, and the combination of IAL’s advanced hydraulic technologies and expertise with Flotek’s distribution network and reputation for providing superior service will prove to be very successful as this business further develops.”
Larry Best brings over 40 years of experience in the development, distribution and service of hydraulic and electrical systems to Flotek in both the energy and aerospace industries. Beginning in the early 1980s, Mr. Best developed advanced variable speed control and drive systems for controlling pump jacks and hydraulic systems to enhance production of maturing oil and gas wells. In 1996, Mr. Best became the general manager of Hydradine Hydraulics where he designed and developed hydraulic regen systems for testing helicopter transmissions, providing technology for companies such as Boeing, Sikorsky and Bell Helicopter.
Longing to return to the oilfield, Mr. Best founded Chaparral Automation, LLC in 2006 where he and his team developed the Dura-Lift long stroke, heavy lift HPU with a patented hydraulic-electrical regen system with a variable speed pump control system. Chaparral was purchased by privately-held Global Oilfield Services, Inc. in 2009 which in turn was purchased by an international, integrated oilfield services company in 2011.
In 2012, Mr. Best formed International Artificial Lift, LLC, again looking for ways to improve on precision pumping and control equipment used in oil and gas production. The result was the Hydra-Lift product line which features IAL’s patented new hydraulic accumulator and other proprietary components.
“The products offered by IAL give Flotek a tangible competitive advantage, especially as the market for HPUs continues to grow,” said David McMahon, Flotek’s Vice President of Production Technologies. “The advances in hydraulic pumping technology – since the original units were introduced in the 1980s – have been driven by entrepreneurs of which Larry is among the best in the business. The IAL design focuses on providing precision pumping functions with the fewest components, creating a more reliable system with significantly less maintenance downtime at a very competitive price. It also creates a significantly smaller environmental footprint versus traditional pumping units. We look forward to combining Larry’s expertise and superior technology with our distribution and service acumen to quickly become a meaningful player in the hydraulic lift business.”
Flotek provided total consideration of US$2.25 million for the purchase of substantially all of the assets of IAL including all intellectual property, finished goods and inventory. Flotek also assumed the lease on IAL’s corporate headquarters in Boyd, Texas in the Dallas-Ft. Worth metroplex. Mr. Best has agreed to remain with the Company for a minimum of two years from the effective date of the transaction.
“We look forward to introducing Larry and his team to our clients and stakeholders in the coming weeks and a successful commercial launch of the Hydra-Lift product lines,” concluded Chisholm. “While a small operation today, the technological advances seen in IAL’s hydraulics provide Flotek with an opportunity to become a difference maker in hydraulic lift in short order.”
Adapted from a press release by David Bizley