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Offshore Drillers Ensco, Rowan Close USD 12bn Merger
Friday 12 April 2019

12 April 2019 - UK-based offshore drilling contractor Ensco plc (NYSE: ESV) and closed its merger with Texas, US-based contract drilling services provider Rowan Companies plc (NYSE: RDC) in an all-stock transaction, the company said.

Under the terms of the transaction agreement, Rowan shareholders will receive 2.215 Ensco shares for each Rowan share. Upon closing, Ensco and Rowan shareholders will own approximately 60.5% and 39.5%, respectively, of the outstanding shares of the combined entity. There are no financing conditions for this transaction.

Based on the closing price of each company's shares on 5 October 2018, the estimated enterprise value of the combined company is USD 12bn.

Legacy Ensco and Rowan shareholders own approximately 55% and 45%, respectively, of the outstanding shares of EnscoRowan.

In conjunction with the closing of the transaction and the termination of the Rowan revolving credit facilities, the company has executed an agreement with its banking group to increase the capacity under its revolving credit facility.

As a result, the merged company, EnscoRowan, will have borrowing capacity under its unsecured revolving credit facility of approximately USD 2.3bn through September 2019, and approximately USD 1.7bn from October 2019 through September 2022.

EnscoRowan will maintain its headquarters in London, England, with a significant presence in Houston, Texas.

The combined company will be domiciled in the United Kingdom, where both Ensco and Rowan are currently domiciled, and senior executive officers will be located in London and Houston.

Ensco plc (NYSE: ESV) brings energy to the world as a global provider of offshore drilling services to the petroleum industry. For more than 30 years, the company has focussed on operating safely and going beyond customer expectations.

Rowan has a current fleet of 27 mobile offshore drilling units, composed of 23 self-elevating jack-up rigs and four ultra-deepwater drillships.

The company's fleet operates worldwide, including the United States Gulf of Mexico, the United Kingdom and Norwegian sectors of the North Sea, the Middle East, the Mediterranean Sea, and Trinidad.

Additionally, the company is a 50/50 partner in a joint venture with Saudi Aramco, entitled ARO Drilling that owns a fleet of five self-elevating jack-up rigs that operate in the Arabian Gulf.

Morgan Stanley and Co. LLC is lead financial advisor to Ensco. HSBC Securities Inc. and Citigroup Global Markets Inc. also provided financial advice to Ensco. Ensco's legal advisors are Gibson, Dunn and Crutcher LLP and Slaughter and May.

The financial advisor for Rowan is Goldman Sachs and Co. LLC and its legal advisors are Kirkland and Ellis LLP and Latham and Watkins LLP.
Date Published: 12/04/2019
Target: Rowan Companies
Country: USA
Deal Size: 12bn (USD)
Sector: Petroleum/Natural Gas/Coal
Type: Merger
Financing: Stock
Status: Closed
Buyer: Ensco
Buyer Advisor: Morgan Stanley and Co. , HSBC Securities , Citigroup Global Markets , Gibson, Dunn and Crutcher , Slaughter and May