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PetroSmith Acquires Lone Star Pipe & Supply

Based in Midland, TX, Lone Star Pipe & Supply's Asian corporate parent sought to divest the Company to a strategic acquirer motivated to maintain the existing supply chain relationship to its mills. Lone Star also possessed proprietary pipe connection technology that was under-utilized due to capacity restrictions in its current facilities.

 

Pritchard Griffin conducted a strategic divestiture process aimed at identifying potential acquirers best suited to create bi-lateral synergies through the acquisition of Lone Star. Ultimately, PetroSmith acquired Lone Star in order to grow its oilfield tubulars business – providing capacity expansion for Lone Star and opening new markets for its threading and connections products. PetroSmith also benefits from Lone Star physical location in Midland which is a critical need for oilfield service companies operating in the Permian Basin. Finally, PetroSmith was able to establish a direct-to-mill relationship for its tubular steel without the need (or lost margin) for a middle-man distributor.

 

Lone Star’s divestiture to PetroSmith created a strategic win-win for both parties as Lone Star’s shareholders optimized exit value while maintaining its desired supply chain relationship to create ongoing revenue pull-through for its tubular steel.

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