Drilling Tools International to Buy Scotland's Saltire Energy for About $81 Million in Cash

What happened

Drilling Tools International Corporation, a Houston-based oil and gas field equipment company whose shares trade on Nasdaq under the ticker DTI, disclosed in a Form 425 filing on October 8, 2026 that it has agreed to acquire a Scottish oilfield services group.

According to the filing — which is a Form 8-K furnished under Rule 425 covering the same transaction — Drilling Tools International, acting through its wholly owned Scottish subsidiary Casing Technologies Group Limited, entered into a Share Purchase Agreement on October 8, 2026 with Saltire Energy Limited and Foxley Energy Limited, both private limited companies incorporated in Scotland.

The sellers are Michael David Loggie, Michael David John Loggie, Jack William Loggie, the Loggie Family Trust, and Optimus Corporate Services Limited as trustee of the Cansco Limited Employee Trust 2007. The agreement covers 1,240 ordinary shares of Saltire and 100 ordinary shares of Foxley — effectively the entire issued share capital of the two companies.

Under the deal, the sellers will receive 60,289,856.60 in cash — roughly $81 million at the exchange rate of $1.343 per 1.00 stated in the agreement — plus unsecured loan notes issued by the buyer that will be exchanged at closing for 17,355,139 shares of DTI common stock. The sellers are expected to own approximately 30% of DTI's outstanding common stock after closing.

DTI shares closed at $2.055 on the event date, down 12.92% from the previous close of $2.36. Volume was 612,749 shares, about 3.2 times the average volume of 191,183, according to the price data.

The filing does not state why the shares moved. It discloses the transaction terms and does not comment on trading.

The filing

The Form 425 is a communication filed with the SEC in connection with a proposed business combination. It is required when a company makes written communications relating to a merger or acquisition before the deal closes. In this case, the Form 425 attaches a Form 8-K current report filed by Drilling Tools International.

The 8-K describes the Share Purchase Agreement in detail, including the consideration, closing conditions, termination rights, indemnification terms and a lock-up and investor rights agreement signed alongside the deal.

The merger has not closed. The agreement requires DTI to file a registration statement on Form S-4 within 45 days, hold a stockholder meeting to approve the share issuance, and obtain Nasdaq approval to list the new shares. Closing is also conditioned on the buyer obtaining debt and/or equity financing sufficient to pay the cash consideration.

The agreement has an outside date of March 31, 2027, after which either side can terminate if the deal has not closed. The sellers can also terminate if financing is not obtained by November 30, 2026 and the parties determine there is no reasonable prospect of it being obtained by the outside date.

If the deal is terminated in specified circumstances and the sellers enter into an alternate transaction within 12 months, they must reimburse the buyer's documented out-of-pocket expenses up to 1,500,000.

What this means

A Form 425 is the SEC filing used for written communications about a merger or acquisition. It exists so that investors see the same deal-related material the companies are sharing. A Form 8-K, by contrast, is a current report companies file when a significant event occurs — here, the signing of the purchase agreement.

The deal has two parts of consideration. First, cash: 60,289,856.60, or about $81 million at the agreed exchange rate. Second, stock: the sellers will receive loan notes that convert at closing into 17,355,139 DTI shares. Loan notes are a form of debt, but in this structure they function as a placeholder that is swapped for equity — which is why the filing calls them 'rollover loan notes.' After closing, the sellers are expected to hold roughly 30% of DTI's common stock.

The cash portion is subject to adjustments described in the agreement. It increases by a 'daily profit ticker' of 23,354 for each day from July 1, 2026 until closing, and is reduced for agreed 'leakage' — cash or value that leaves the target company before closing — and for historic lease taxes, with a further adjustment for an employee benefit trust tax liability. The equity portion is fixed: the number of shares does not change if DTI's market price moves before closing.

Saltire Energy and Foxley Energy are the acquisition targets. The filing describes them as Scottish private limited companies. It does not describe their revenue, profit or business in detail, other than that they are being acquired by a DTI subsidiary and will become indirect wholly owned subsidiaries of Drilling Tools International after closing.

The sellers have agreed to a 24-month lock-up on the shares they receive, with tranches released at 12, 18 and 24 months. They also get the right to designate either a board member or a non-voting board observer, subject to ownership thresholds. The buyer has obtained warranty and indemnity insurance, with the premium split 50/50 and the buyer bearing the retention.

The filing says the buyer expects to fund the cash consideration through new debt financing and borrowings under DTI's existing credit facility. That financing has not yet been obtained, and the buyer's obligation to close is conditioned on getting it on terms consistent with those agreed in the purchase agreement.

What happens next depends on several steps the filing lays out: DTI must file the S-4 registration statement within 45 days, the registration statement must be declared effective, stockholders must approve the share issuance, and Nasdaq must approve listing of the new shares. The filing does not predict whether those conditions will be met or when the deal will close.