View:
United States securities and exchange commission logo
June 3, 2024
Jeffrey Bird
Chief Executive Officer
Dril-Quip, Inc.
2050 West Sam Houston Parkway S., Suite 1100
Houston, TX 77042
Re: Dril-Quip, Inc.
Registration
Statement on Form S-4
Filed May 1, 2024
File No. 333-279048
Dear Jeffrey Bird:
We have reviewed your
registration statement and have the following comments.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe a comment applies to your
facts and circumstances
or do not believe an amendment is appropriate, please tell us why in
your response.
After reviewing any amendment to your registration statement and
the information you
provide in response to this letter, we may have additional comments.
Registration Statement on Form S-4
The Mergers
Opinion of Dril-Quip's Financial Advisor, page 103
1. You disclose that,
during the approximate two-year period prior to the date of Citi s
opinion, Citi and its
affiliates provided investment banking, commercial banking and other
similar financial
services to Innovex and/or certain of its affiliates. Please revise to
describe and quantify
all compensation paid to Citi by Innovex or its affiliates as a result
of their material
relationship. Refer to Item 1015(b)(4) of Regulation M-A.
Unaudited Pro Forma Condensed Combined Statement of Operations, page 202
2. Please revise your cost
of sales caption to note that the amounts are presented exclusive of
depreciation and
amortization shown below.
Jeffrey Bird
FirstName LastNameJeffrey Bird
Dril-Quip, Inc.
Comapany
June 3, 2024NameDril-Quip, Inc.
June 3,
Page 2 2024 Page 2
FirstName LastName
Notes to the unaudited pro forma condensed combined financial statements
Transaction Accounting Adjustments, page 209
3. We note that you recorded Gain on bargain purchase in the amount of
$185.7M. Please
fully explain to us how you determined the fair value of the property,
plant and equipment
of Dril-Quip. Please specifically address why the gain on bargain
purchase you recognized
was so significant relative to the purchase price. Describe to us, in
sufficient detail, the
reassessment you performed pursuant to ASC 805-30-25-4 before
recognizing the gain on
bargain purchase.
Index to Innovex's financial statements, page F-1
4. Please revise your registration statement to include updated Innovex's
financial statements
and related disclosures in accordance with Rule 3-12 of Regulation
S-X.
Innovex Downhole Solutions, Inc.'s financial statements
Notes to Consolidated Financial Statements
Equity Method Investment, page F-12
5. Please tell us how you considered the disclosures required by ASC
323-10-50-3(c). In
addition, please revise to include your policy on presenting
distributions received from the
equity method investments in your consolidated statements of cash
flows. We refer you to
ASC 230-10-45-21D and 235-10- 50-1 to 50-6.
Lease, page F-24
6. We note from your disclosure on page F-25 that the weighted-average
discount rate used
for finance leases is 6.20% and 5.04%, and the weighted-average
discount rate used for
operating leases is 5.27% and 3.46% for years ended December 31, 2023
and 2022,
respectively. Please provide us with additional details regarding how
you determined or
calculated the weighted-average discount rates for each class of your
leases as a lessee. In
this regard, please clarify whether you are utilizing a risk-free
discount rate for the leases
instead of your incremental borrowing rate. Refer to ASC 842-20-30-3.
Jeffrey Bird
FirstName LastNameJeffrey Bird
Dril-Quip, Inc.
Comapany
June 3, 2024NameDril-Quip, Inc.
June 3,
Page 3 2024 Page 3
FirstName LastName
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
Please contact Becky Chow at 202-551-6524 or Stephen Krikorian at
202-551-3488 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Lauren Pierce at 202-551-3887 or Matthew Derby at 202-551-3334 with any
other
questions.
Sincerely,
Division of
Corporation Finance
Office of Technology
cc: Gerry Spedale