Oil States International Inc. has acquired oilfield elastomer product maker Barlow-Hunt Inc. of Tulsa, Okla., providing its Oil States Industries Inc. unit the opportunity to expand its geographic coverage and explore manufacturing synergies.
Oil States paid $7.5 million in cash for Barlow-Hunt, a privately held 18-year-old firm specializing in seals for the oil and gas, construction and marine industries. Barlow-Hunt employs 85 and reports annual sales of about $8 million.
Barlow-Hunt founders Jim Barlow and Rex Hunt will continue to serve the renamed Oil States Barlow-Hunt as president and vice president, respectively. Hunt also will be involved in helping the two companies blend their respective proprietary technologies, Barlow said.
Barlow-Hunt offers Oil States a number of competitive advantages, including innovative tooling and thermoset plastic/elastomer bonding technologies, according to Don Greenlee, vice president, elastomer group. The tooling expertise, especially, is an asset that can be used in Oil States' other plants, allowing the company to lower its costs and bid for a wider range of contracts, Greenlee said.
In addition, Barlow-Hunt has developed a compression co-molding process for mating plastics and rubber. The company developed the technology after concluding that plastic-to-rubber seals were well suited for the high-temperature/high-pressure environment of down-hole drilling seals, Barlow said.
Oil States had approached Barlow and Hunt about six months ago about a takeover, Greenlee said. Barlow said he and Hunt had not considered selling before that time, but after a few meetings with Greenlee and other Oil States' executives the pair became convinced the Texas company's offer made sense and would give them a chance to secure continuity for their firm and their employees.
Both Barlow and Hunt started their careers with another Tulsa company, FoMac, a specialty molder that was acquired by Fluorocarbon Co. in 1985. Shortly thereafter the pair left FoMac and started their own business.
Barlow said his firm and Oil States had many customers in common through the years, but with different product lines. That makes the acquisition truly complementary, he said.
Oil States Industries, which records about $20 million in elastomer-related sales, is actively pursuing further acquisitions, Greenlee said, but no details are available at this time.
When Oil States International went public in early 2001, one of its strategic goals was growth by acquisition, Greenlee said. It's taken until now, though, for the appropriate opportunity to appear.
Oil States operates a factory and separate elastomer research and development center in Arlington. In addition to seals used both in offshore and onshore oilfield activities, Oil States makes FlexJoints flexible metal-elastomeric bearings for military, marine and aircraft applications.
It also owns 60 percent of Elastomeric Actuators Inc., a maker of fabric-reinforced products used in pneumatic actuating devices.
Oil States disclosed the Barlow-Hunt purchase in its second-quarter earnings statement. For the period, the company reported net earnings of $8.2 million on sales of $150.8 million.