Weatherford International has signed a definitive agreement to purchase Precision Drilling Corporation's Energy Services Division and International Contract Drilling Division for $2.28 billion.
Under the terms of the agreement, Weatherford will make up the purchase price through transferring 26 million common shares and approximately $900 million in cash. The cash portion of the consideration will be paid in Canadian dollars.
Acquired net book value is about $1.63 billion. Weatherford expects the transaction to be accretive to its earnings per share and cash flow per share for 2005, before consideration of potential synergies.
Precision’s Energy Services division is a global provider of cased hole and open hole wireline services, drilling and evaluation services (directional drilling, MWD, LWD and rotary steerable systems) and production services (primarily underbalanced drilling).
Precision’s International Contract Drilling division is an international land rig contractor. It became a major player in the international market after its acquisition of the worldwide land drilling assets of Global Santa Fe Corporation in May 2004. Precision currently has 48 rigs, with a strong presence in the Middle East and North Africa.
In the 12 months ending December 2004, Precision Energy Services and International Drilling had revenues of C$1.1 billion. The combined divisions have approximately 5,300 employees operating in 25 countries.
The transaction is expected to be completed during the third quarter of 2005.