HAMILTON, BERMUDA & HOUSTON, TEXAS (August 12, 2010): Seawell Limited (NOTC: SEAW) and Allis-Chalmers Energy Inc. (NYSE: ALY) today announced that their Boards of Directors have unanimously approved a definitive merger agreement providing for the acquisition of Allis-Chalmers by Seawell in a transaction valued at approximately USD 890 million (including assumed debt).
The combined company will have approximately 6,500 employees and is projected by equity research analysts to have an estimated revenues of USD 1.3 billion and a contribution to capital or EBITDA of USD 195 million in 2010. The combined company will operate its Drilling and Well Services offerings with a global footprint covering more than 30 of the world's key oil and gas regions including the US, Gulf of Mexico, Brazil, Argentina, North Sea, Middle East, Africa and Southeast Asia / Pacific.
The combined Drilling Services offering will include platform drilling, land contract drilling, modular rigs, maintenance of drilling systems, directional drilling technology, underbalanced drilling, facility engineering services, rig and riser inspections, and oilfield rentals. The company will be able to provide its customers with fully integrated drilling services, both onshore and offshore, with more than 4,000 experienced drilling crew members and senior directional drillers. The Well Services offering will include electric and mechanical wireline services, production logging services, coil tubing services, ultrasonic investigation logging services, down-hole cameras, and advanced well fishing services. The combined company has a long track record of safe and efficient operations in the North Sea, USA and South America...
Seadrill got into the platform drilling business through the acquisition of Smedvig in 2006. Since the platform drilling and well service business doesn't have all that many synergies with mobile unit contract drilling, Seawell was partially spun out of Seadrill in 2007. Seawell has since then grown in size by acquiring the platform drilling operations of Pride and Noble(Pride still operates the Thunder Horse and Kizomba platforms).
John Fredriksen's right hand man Tor Olav Trøim indicated that more acquisitions are likely to follow.
Looks like about 80 million new shares will be issued to the shareholders of Allis-Chalmers Energy so that the new Seawell will have 190 million shares outstanding. Seadrill now owns ~70 % of Seawell's shares so the transaction will dilute the ownership stake to 40 %. In the past John Fredriksen's companies have often, but not always distributed the shares of spin-off-companies to the shareholders of the "mother companies" e.g. Marine Harvest-Lighthouse Caledonia, Frontline-Shipfinance, Frontline-Golden Ocean.
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