Nabors to acquire Tesco in an all-stock transaction
Nabors Industries has signed an arrangement agreement to acquire all of the issued and outstanding common shares of Tesco, with each outstanding share of common stock of Tesco being exchanged for 0.68 common shares of Nabors. This transaction will create a leading rig equipment and drilling automation provider by combining Canrig, a Nabors rig equipment subsidiary, with Tesco’s rig equipment manufacturing, rental and aftermarket service business. Additionally, Tesco operates a tubular services business in numerous key regions, which will benefit Nabors Drilling Solutions’ operation.
This transaction values Tesco common stock at $4.62 per share based on the closing price of Nabors shares on the New York Stock Exchange on 11 August 2017, which represents a 19% premium of the closing value of Tesco shares on the NASDAQ Stock Market on 11 August 2017. The transaction is subject to regulatory approval and customary closing conditions and is expected to close in Q4.
“The addition of Tesco to our company represents another step forward for both our rig equipment and Nabors Drilling Solutions business. Tesco is respected for the quality of their product offerings and aftermarket service levels. I am eager to realize the benefits to our combined customers and shareholder groups that this combination will provide,” Anthony G. Petrello, Nabors Chairman, President and Chief Executive Officer, said.
Michael W. Sutherlin, Tesco’s Non-Executive Chairman of the Board, said, “With this transaction, Tesco will now have an expanded platform, which will allow for acceleration of its strategy and increase the potential for market share gains around key industry trends. The combination will provide significant value to Tesco shareholders by participating in a stronger and broader offering of complementary rig equipment product lines and tubular services.”
The transaction has been approved by the boards of directors of both companies and is subject to approval by Tesco shareholders and the satisfaction of customary closing conditions and regulatory approvals. Intrepid Partners served as financial advisor to Nabors. Milbank, Tweed, Hadley, & McCloy and Stikeman Elliott LLP served as legal advisors to Nabors.
