Tesco Corporation (NASDAQ: TESO) today announced that it has entered in to an Arrangement Agreement with Nabors Industries Ltd. (NYSE: NBR) to combine with Nabors in a stock-for-stock transaction. TESCO shareholders will be issued 0.68 common shares of Nabors for each outstanding share of common stock of TESCO. Upon consummation of this transaction, TESCO shareholders will own approximately 10% of the outstanding shares of Nabors. The transaction has been approved by the board of directors of both companies and is subject to approval by TESCO security holders and satisfaction of customary closing conditions and regulatory approvals, including court approval required by Section 3(a)(10) of the Securities Act of 1933, as amended.
This transaction values TESCO common stock at $4.62 per share based on Nabors closing share price of $6.80 on the New York Stock Exchange on August 11, 2017. This represents a premium of 19% to TESCO’s closing price on the NASDAQ Stock Market on the same date, and represents a premium of 30% to TESCO’s enterprise value based on TESCO’s June 30, 2017 cash balance.
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 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,” said Nabors’ Chairman, President and Chief Executive Officer Anthony G. Petrello.
Fernando Assing, TESCO’s President and Chief Executive Officer,commented, “This is a very exciting opportunity to combine two world class companies that are highly focused on delivering best in class services to the oil and gas industry. This combination will further reinforce Nabors position as a leading rig equipment and drilling automation provider by integrating TESCO’s advancedtubular services technology and products into the Nabors global rig footprint and NDS services. The new expanded platform also creates significant career opportunities for TESCO’s employees as part of a much larger international organization.”
J.P. Morgan Securities LLC served as exclusive financial advisor and Norton Rose Fulbright served as legal advisor to TESCO.
Tesco Corporation is a global leader in the design, manufacture and service of technology based solutions for the upstream energy industry. The Company's strategy is to change the way people drill wells by delivering safer and more efficient solutions that add real value by reducing the costs of drilling for and producing oil and natural gas. TESCO® is a registered trademark in the United States, Canada and the European Union.