BREAKING NEWS: The $300 Million Sale of Orem-based US Synthetic Will Enable the $7.8 Billion Acquisition of its Parent Company, ChampionX

On the surface, the news seems pretty straightforward, but it's not.

So here's both the straightforward news, as well as the more complex backstory.

The Straightforward News: Orem, Utah-based US Synthetic is Being Bought for ~$300 Million

Orem, Utah-based US Synthetic is being sold for approximately $300 million to Stamford, Connecticut-based LongRange Capital (a private equity firm), in an all-cash transaction by its parent company, The Woodlands, Texas-based ChampionX (NASDAQ:CHX).

Although the LongRange acquisition news release does not disclose the amount it will spend to acquire US Synthetic, the Form 8-K filed by ChampionX with the U.S. Securities and Exchange Commission does.

According to the Form 8-K filing, the ~$300 million sale of US Synthetic is expected to close by 02 April 2025, but could be extended to as late in the year as 31 December 2025 without violating the acquisition terms.

{AUTHOR'S NOTE: More on this below.}

The US Synthetic Journey

Formed in 1978, US Synthetic develops and produces top-quality polycrystalline diamond cutter (PDC) drill bits, inserts, bearings, valves, and mining tools for oil exploration and development projects.

US Synthetic was acquired for an undisclosed amount in August 2004 by New York City-based Dover Corporation (NYSE:DOV).

Then, in May 2018, Dover spun-off some of its assets into a newly minted, publicly traded firm known as Apergy, assets that included US Synthetic.

A little over two years later, June 2020 to be precise, Apergy merged with the upstream energy business of Ecolab Inc.; this merged company then changed its name to ChampionX.

Based upon the financial details shared in the 2024 ChampionX Annual Report, ended 31 December 2024 (as filed with the SEC on Form 10-K), the company's Drilling Technologies revenue (aka, US Synthetic's sales) topped $211.8 million in 2024.

Now here's where it gets complicated.

The Pending ChampionX Acquisition has been Teetering in the Balance

Last Spring (on 02 April 2024 to be precise), ChampionX announced that it had agreed to be acquired by SLB (NYSE:SLB), pending review and approval of various governmental bodies, including the U.S. Justice Department, under terms outlined in the Hart-Scott-Rodino Antitrust Improvements Act of 1978.

However, because SLB's already owns a business segment (known as MegaDiamond) that competes with US Synthetic, legal concerns were quite real about the potential antitrust implications if SLB (the formerly named Schlumberger) was allowed to proceed forward with its ChampionX purchase, enabling it to also acquire US Synthetic in the process.

In fact, in the months following the planned acquisition announcement, the Justice Department twice requested additional information from SLB and ChampionX, putting the transaction somewhat in doubt.

However, SLB announced on Monday, 25 February 2025 that it was "... legally permitted to close the ChampionX transaction in the United States ..." because "... all applicable waiting periods under the U.S. Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 have expired...."

Additionally, SLB also explained in this release that "The ChampionX transaction remain(ed) subject to antitrust review in other jurisdictions," including regulatory bodies in both Norway and the United Kingdom.

Nevertheless, in an apparent move to appease foreign regulators, ChampionX separately announced on Monday, 25 February 2025, that it had entered into a "Definitive Agreement" to sell its US Synthetic business to LongRange Capital, a Stamford, Connecticut-based private equity firm.

{NOTE: Since its 2019 formation, LongRange has acquired $1.5 billion in Assets Under Management (AUM).}

Taken together, and as outlined above, the intent of both parties — ChampionX and SLB — is that the sale of Orem-based US Synthetic will close on/before 02 April 2025.

As of today.

So, complicated or not, you now know the full story behind the $300 million sale of US Synthetic.

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