JSA advised and assisted Downhole Products Limited (“DHP”), a wholly owned subsidiary of Varel Oil and Gas Inc., (“Varel”) on its acquisition of 100% stake in Sledgehammer Oil Tools Private Limited (the “Company”). The transaction was structured as a two-tranche acquisition, within a 2-year period, with DHP acquiring 78% of the shareholding of the Company in June, 2022 and the remaining 22% in October, 2024.
Varel is one of the largest manufacturers of downhole drilling and completions products in the energy sector.
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The transaction was structured for the acquisition to be completed in 2 tranches, either through a share purchase or a buyback.
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The consideration for the first tranche was structured pursuant to a locked box mechanism and was paid out in 2 phases: (i) an initial fixed amount; and (ii) a deferred amount accounting for any leakages.
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The properties owned by the Company were sold to the promoter group as part of the transaction and leased back to the Company on a long-term basis.