Nabors Industries Ltd. on Monday said it offered to buy Superior Well Services Inc., a hydraulic fracturing (hydrofracing) pumping services specialist, in a transaction worth an estimated $900 million, including debt.
Superior, based in Indiana, PA, specializes in hydrofracing. Nabors, headquartered in Bermuda, offered Superior $22.12/share, which is an 18% premium to its closing price Friday on the New York Stock Exchange.
"For some time now, we have evaluated integrating more service offerings into our business, particularly internationally," said Nabors CEO Gene Isenberg. "Although we expect this acquisition by itself to be significantly accretive to 2011 results, our major motivator was the opportunity to leverage this well respected franchise into a global force utilizing our extensive international footprint and resources.
"In addition to the upside associated with expanding internationally, we expect to derive significant synergies in North America by integrating pumping services with our drilling and workover offerings. The most readily identifiable economies will be derived from our own oil and gas entities, with further benefits dependent upon how quickly we can increase activity across more of our fleet."
Superior's "broad U.S. presence complements that of both our U.S. land drilling and well-servicing operations and augments our expansion into areas such as the Marcellus Shale region," said Isenberg.
Superior has one of the newest fleets in the industry with more than 430,000 hp.
"This complementary combination of the largest land drilling contractor in the world with a leader in technical pumping will make both organizations stronger and better able to meet our customers' needs not only in the U.S., but around the world," said Superior CEO David Wallace.
Owners of about one-third of Superior's outstanding shares of common stock already have agreed to tender their shares to Nabors. Once the tender offer is completed, which is expected by the end of September, Nabors said it would acquire any remaining shares of Superior through a second-step merger at the same price paid in the tender offer.
The merger agreement requires Superior to pay Nabors a termination fee of about $22.5 million and reimbursable expenses of up to $5 million if the agreement is terminated for certain reasons.
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