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Here is an opportunity that just doesn’t come along every day: the purchase of a dual entity company that has precision overseas manufacturing and a U.S. distribution platform. This is a consolidation of an Indian engineering company that makes oil and gas flowline equipment with a U.S. warehousing and sales subsidiary. Between them, they supply leading oilfield products to major players in the world’s energy industry.
A spin-off from the foreign company, this specialist precision engineering firm has extensive experience in oilfield flowline equipment. Its 116,000+ square foot manufacturing facility in India is equipped with the latest CNC machinery for production, forging & heat-treatment, coating, and testing of OEM/Aftermarket parts. This facility is leased and is anticipated to be available to the new owner at the close of the transaction.
Production is supported by a similar warehouse in Texas – a 14,000-square-foot facility that serves as the U.S. base for marketing, sales, and logistics. The Texas location provides direct access to the North American energy corridor regarding supply chain and quick product access to U.S. clients.
The company has become a respected provider to international oil and gas operators, including specialized oilfield services for onshore rig operations throughout North America and the Middle East. It also has a production project with a long-term contract with a major oil company that extends through 2025, indicating the credibility and stability of the project.
With a track record of deliveries and the cost-effectiveness of overseas production, the company has been growing its customer base, revenues, and international competition to meet the needs of its customers in two of the most dynamic oil markets in the world.
Revenue numbers include gains over all of 2022, though intercompany transfers between the Indian and U.S. businesses are not broken out.
There is rich soil for growth in the two-entity structure. Potential avenues include:
These opportunities offer an experience that is scalable for growth-hungry investors seeking both today’s operating stability and tomorrow’s growth prospects.
Current owners are looking for a full exit after any negotiated transition period. Flexible deal structures are envisaged to ease the transition, and this sale offers versatility to both strategic and financial buyers.
Texas continues to be a major center for the world of distribution and supply in oilfields. Competitors in markets like Houston, Abilene, and Brownsville bolster upstream and midstream operators with various needs — from hand tools and industrial heaters to specialized flowline systems. This two-prong acquisition sits in a unique location, given that it not only has a U.S. distribution foothold that others covet, but it also owns that network’s overseas production — a competitive advantage over many, if not most, Texas-based resellers that rely on third-party providers.
This offering represents a unique opportunity to purchase a vertically integrated foreign manufacturing powerhouse and a matured U.S. distribution footprint. With signed contracts, state-of-the-art infrastructure, and a tested international client base, the business is well-positioned for investors looking to expand or further diversify in the North American energy supply chain or internationally in oilfield services.
With an efficient overseas supply and a Texas distribution hub, the growth of the business can be developed across new geographies, product lines, or better long-term supply agreements.
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