Yesterday, Drillinginfo, an Austin Texas-based SaaS and data analytics provider to the energy industry, announced the acquisition of Oildex, a leading oil and gas financial automation software provider. It is the first acquisition by Drillinginfo since the company was itself acquired by Genstar Capital, a San Francisco-based private equity firm back in July. Terms of the deal were not announced. Drillinginfo currently delivers insights and digital tools to the energy, power, and commodities markets. The company offers solutions that deliver value across the upstream and downstream markets, and delivers actionable intelligence through its industry data and built-in analytics on where to find oil and gas and who controls mineral rights for each site. This acquisition will allow Drillinginfo to expand its reach across the oil and gas value chain.
Oildex, headquartered in Denver Colorado, and with offices in the US and Canada, has been focused on the financial supply chain within oil and gas since its founding in 1999. Oildex’s initial focus was on building out its electronic invoicing network within the oil and gas industry. Since then, the company has built a suite of solutions designed to manage not only electronic invoicing (eInvoicing), but also integrated field operations management software made specifically for oilfield suppliers. In 2014, Oildex was acquired by Accel-KKR, a private equity firm that specializes in B2B networks. Oildex has risen in prominence within oil and gas through its Accounts Payable automation solution that addresses the specific requirements of the industry, and by building out a B2B eInvoicing network that focuses on both buyers and suppliers in the space.
Ardent’s Deal Analysis
At the high level, the acquisition makes great sense for Drillinginfo as it looks to continue to expand its production and oilfield business services. Both companies have the same customer base, and offer similar platforms in the cloud. The information that Oildex provides should give Drillinginfo customers more data to help make better decisions for their business. Three specific solutions from Oildex that Drillinginfo should be able to integrate and expand include:
- OpenInvoice, Oildex’s AP automation solution. Oildex’s large supplier network has been optimized for oil and gas and automates key business processes. Drillinginfo believes that combining this network with its industry data and analytics, will be a great complement to each other in helping enable seamless and secure collaboration across business partners.
- Oilfield Services Suite, a solution suite designed to help small service providers manage all aspects of their business, from sales, inventory, purchasing, personal, safety, etc. The solution was built so that it requires no documentation and almost no training to use. With software on both the buyer and supplier side, Oildex can provide more data and increased visibility to its users. Drillinginfo sees oilfield services as an area of rapid growth and innovation for both companies.
- Field Ticket, a cloud-based document automation solution which was launched in 2016 to help oil and gas professionals out in the field reduce the time between the completion of a work assignment, and the submission and approval of an invoice. This solution helps to automate the cumbersome process of creating and delivering field tickets. Drillinginfo plans to combine its oilfield services mobile app with Oildex’s OpenTicket (and its broader suite of field services management tools) to provide an end-to-end SaaS platform for oilfield services.
Final Thoughts
The upstream oil and gas industry is unique from many others. The acquisition of Oildex by Drillinginfo makes sense for both companies and most importantly, their respective customer bases. The combination of Drillinginfo’s decision support solutions with Oildex’ operations automation solutions will create synergies by providing deep insights and operational efficiency for their customers in the energy sector. All in all, we think the combination of Oildex and Drillinginfo makes sense and ultimately, organizations in the oil and gas market sector will benefit in the long run.
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