NEW YORK, March 12, 2008 - Castle Harlan, Inc., the New York private equity investment firm, announced today it has signed a definitive agreement to purchase Anchor Drilling Fluids USA, Inc., the nation's largest independent provider of drilling fluids and fluid-handling services for onshore oil and gas drilling, in a purchase valued at $250 million. Anchor is a portfolio company of American Capital Strategies, Ltd. (Nasdaq: ACAS), a private equity firm based in Bethesda, Maryland.
The transaction is expected to close in a few weeks, subject to the satisfaction of customary conditions, including debt financing for the transaction.
Anchor, based in Tulsa, Oklahoma, has more than 20 operating facilities in Texas, Oklahoma, Arkansas, Colorado, Montana, New Mexico, Utah and Wyoming. The company's operations focus on regions that have complex onshore drilling environments, which require proprietary drilling fluid blends and customized engineering services. Drilling fluids are used to remove cuttings from oil and gas drilling sites, to lubricate drill bits and to control formation pressures.
In addition to drilling fluids, the company's fluid-handling operations include freshwater and production water transport services in the Piceance Basin in Colorado, one of the fastest growing drilling regions in the United States.
William Pruellage, the managing director who led the negotiations for Castle Harlan, noted that the company has an experienced management team with strong customer relationships and a growing position in the most active onshore oil and natural gas regions in the country.
"Over the past 35 years, Anchor has worked in close partnership with some of the most active land drilling companies in the country," Pruellage said. "We are confident that Anchor will continue to show solid growth in the years ahead."
Existing management, including Chief Executive Officer Bob West and his son, President and Chief Operating Officer Phil West, will continue to hold a significant equity interest in the company, Pruellage said.
Castle Harlan is buying the company from American Capital, which had partnered with Bob and Phil West to acquire Anchor in July 2005. Since 2005, Anchor has purchased Ozark Mud & Chemical Inc., a provider of drilling fluid services and equipment rentals in the Fayetteville Shale, and Toby's Vacuum Truck Service Inc., a fluid-handling business servicing the Piceance Basin.
Castle Harlan has previously owned a number of companies in the energy industry, including RathGibson, a leading manufacturer of highly engineered premium stainless steel and alloy welded tubular products used in oil and gas drilling, among other applications; Universal Compression, one of the world's largest providers of natural gas compression equipment and services; Statia, a global leader among independent marine terminal companies, and US Synthetic, the world's largest independent manufacturer of synthetic diamonds used in oil and gas drill bits.
Castle Harlan, founded in 1987, invests in controlling interests in the buyout and development of middle-market companies in North America, Europe and, together with CHAMP Private Equity, in Australasia. It has completed 48 acquisitions since its inception with a total value in excess of $9 billion.
Castle Harlan's current portfolio companies, which employ more than 42,000 people, include AmeriCast Technologies, a leading designer and manufacturer of large, complex steel castings weighing more than 10,000 pounds used for mining trucks, locomotives and energy equipment; Ames True Temper, a leading manufacturer of lawn and garden tools and accessories; and Baker & Taylor, the leading global distributor of books and entertainment products to libraries and retailers.