Drilling and oil field services company BJ Services is buying Lafayette, LA-based OSCA Inc. for $28/share or about $420 million. OSCA is a major provider of oil and gas well completion fluids, completion services and downhole completion tools in the United States and select international markets, and will give BJ Services another solid completion product line to market to its broad geographic area.

OCSA’s board approved the deal following a thumbs-up from Great Lakes Chemical Corp., which owns 53% of OSCA’s common stock, and a special committee of independent members of OSCA’s board that reviewed the transaction on behalf of public shareholders. Great Lakes will receive after-tax proceeds of $200 million in cash.

BJ Services CEO J.W. Stewart said OSCA brings a premium completion fluids business that will broaden BJ’s completion services offering around the world. “The combination of BJ’s pressure pumping capabilities and OSCA’s completion tool and fluids technologies significantly strengthens our ability to meet the increasing demand for a ‘packaged’ completion services approach in meeting our customer’s needs.”

BJ’s existing credit facilities are sufficient to finance the transaction and the acquisition will result in the company’s debt to capitalization ratio increasing to 29%. The company believes it can achieve $15-20 million in operating cost synergies in the combination and it is expected to be earnings accretive in fiscal 2003.

The transaction is subject to regulatory and other customary approvals and is expected to close within 90 days.

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