In a significant move towards global energy technology investments, ADNOC Drilling Company and Alpha Dhabi Holding, one of Abu Dhabi’s largest investment entities, have established a new joint venture. This venture is set to pursue global investments in energy technology and expand tech-enabled energy services, marking a strategic shift in the energy sector.
The joint venture’s inaugural investment is Alpha Dhabi’s 25 percent stake in Gordon Technologies, a US-based company specializing in measurement while drilling technology for the oil and gas industry. This stake, valued at approximately $180 million, represents a substantial commitment to the future of energy technology.
ADNOC Drilling holds a majority stake of 51 percent in the venture, with both parties having equal representation on the board of directors. This joint venture’s financial results will be integrated into ADNOC Drilling’s financial reporting using the equity method, starting from the first quarter of 2024.
Hamad Al Ameri, Managing Director and Group CEO of Alpha Dhabi, reflected on the strategic importance of this partnership. “Since acquiring a minority stake in Gordon Technologies in 2022, Alpha Dhabi has been instrumental in supporting its growth in the US market. We have established a strong foundation for its expansion into the Middle East, further enhancing our portfolio in the energy sector,” he stated.
A notable aspect of Gordon Technologies is its financial health. The company operates with zero leverage, making its acquisition economically beneficial for the joint venture partners. It stands out in terms of profitability, valuation multiple, cash flow generation, and dividend potential. Furthermore, Gordon Technologies is expected to have a free cash flow yield exceeding 10 percent for the fiscal year 2023.
This joint venture between ADNOC Drilling and Alpha Dhabi is not just a business transaction; it’s a forward-thinking move in the ever-evolving landscape of global energy. By investing in innovative technologies like Gordon Technologies, the partners are positioning themselves at the forefront of the energy transition, exploring new opportunities and contributing to the growth of tech-enabled energy services on a global scale.
