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Oilfield Services Firm Tesco Wins Shareholders Nod for Acquisition by Nabors
Wednesday 06 December 2017

6 December 2017 - Shareholders of US-based oilfield services firm Tesco Corp. (NASDAQ: TESO) have approved the company's deal to be acquired by Bermuda-based drilling rig fleet operator Nabors Industries Ltd. (NYSE: NBR), the company said.

The approval process with the Federal Antimonopoly Service of the Russian Federation, which was initiated on October 10, 2017, remains ongoing. The companies expect the closing of the transaction to occur by year end.

In August, Nabors Industries announced it had signed an arrangement agreement to acquire all of the issued and outstanding common shares of Tesco, with each outstanding share of common stock of Tesco being exchanged for 0.68 common shares of Nabors, the company said on Monday.

This transaction will create a leading rig equipment and drilling automation provider by combining Canrig, Nabors rig equipment subsidiary, with Tesco's rig equipment manufacturing, rental and aftermarket service business. 

Additionally, Tesco operates a tubular services business in numerous key regions globally, which will immediately benefit Nabors Drilling Solutions' operation.

Nabors is uniquely positioned to automate and integrate tubular services into its global rig footprint. By combining its complementary products, tools and technologies, they will be able to offer customers more fit-for-purpose products, services and solutions.

This expanded capability will enable them to further improve operational efficiency, accelerate and scale its development of new and innovative equipment on its new generations of rigs as well as upgrade older classes of rigs for a new age of drilling.

This transaction values Tesco common stock at USD 4.62 per share based on the closing price of Nabors shares on the New York Stock Exchange on August 11, 2017, which represents a 19% premium of the closing value of Tesco shares on the NASDAQ Stock Market on August 11, 2017. 

The transaction is subject to regulatory approval and customary closing conditions and is expected to close in 4Q17.

First year operating synergies are expected to approach USD 20m with full run-rate operating synergies of USD 30m to USD 35m. 

In addition, the company expects to realise capital savings from facility rationalisation and the planned build out of its casing running operation. 

The transaction has been approved by the boards of directors of both companies and is subject to approval by Tesco shareholders and the satisfaction of customary closing conditions and regulatory approvals. 

Intrepid Partners served as exclusive financial advisor to Nabors. Milbank, Tweed, Hadley, and McCloy LLP and Stikeman Elliott LLP served as legal advisors to Nabors.
Details
Date Published: 06/12/2017
Target: Tesco Corp
Country: USA
Deal Size: 230m (USD)
Sector: Petroleum/Natural Gas/Coal
Type: Corporate acquisition
Financing: Stock
Status: Agreed
Vendor:
Buyer: Nabors Industries Ltd
Buyer Advisor: Intrepid Partners
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