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Dril-Quip Declares the Closure of TIW Corporation Buyout

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Dril-Quip Inc. recently declared that it has closed the TIW Corporation acquisition. On Oct 17, 2016, the company entered into a deal to acquire Houston, TX-based TIW Corporation that provides liner hanger systems and related equipment and services.

The purchase will broaden Dril-Quip’s products portfolio. Notably, this is the first ever buyout by Dril-Quip, which provides products for onshore and offshore applications, to improve its offerings. We note that the product base of TIW Corporation complements that of the acquirer. 

Dril-Quip will likely fund the acquisition with cash on hand and hence, is keeping its balance sheet free from further debt. The takeover is expected to improve cost efficiencies and boost sales. These in turn should enable Dril-Quip to earn significant cash flows for shareholders in the long run.

Headquartered in Houston, TX, Dril-Quip manufactures highly engineered offshore drilling and production equipment for deepwater severe service applications and harsh environmental conditions. The company designs and manufactures subsea and surface wellheads, subsea and surface production trees, mudline hanger systems, specialty connectors, and associated pipe, drilling and production riser systems, wellhead connectors and diverters that are used on offshore rig equipment.

The company recently reported third-quarter 2016 results. Earnings per share of 39 cents beat the Zacks Consensus Estimate by a penny. Lower total expenses led to the outperformance.

Currently, Dril-Quip carries a carries a Zacks Rank #3 (Hold), implying that it will perform in line with the broader U.S. equity market over the next one to three months.

Some better-ranked players in the energy sector are Ultra Petroleum Corp. , EQT Midstream Partners LP and Helix Energy Solutions Group, Inc. (HLX - Free Report) .   

Ultra Petroleum is likely to witness year-over-year earnings growth of 425.8% in the current year. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

EQT Midstream is projected to witness year-over-year earnings growth of almost 12% in the current year. It has a Zacks Rank #2 (Buy).

Helix Energy posted an average positive earnings surprise of 56.42% in the last four quarters. The company has a Zacks Rank #2.

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