Ensco to acquire Atwood Oceanics

ENSCO 102Ensco are to acquire Atwood Oceanics. (Image source: Ensco/All rights reserved)Ensco plc and Atwood Oceanics, Inc. jointly announced on 30 May that they have entered into a definitive merger agreement under which Ensco will acquire Atwood in an all-stock transaction

The definitive merger agreement was unanimously approved by each company's board of directors. Under the terms of the merger agreement, Atwood shareholders will receive 1.60 shares of Ensco for each share of Atwood common stock for a total value of US$10.72 per Atwood share based on Ensco's closing share price of US$6.70 on 26 May 2017. According to Reuters, the deal is worth US$839mn.

Ensco expects to realize annual pre-tax expense synergies of approximately US$65mn for full year 2019 and beyond. 

Ensco Chief Executive Officer Carl Trowell said, "The combination of Ensco and Atwood will strengthen our position as the leader in offshore drilling across a wide range of water depths around the world - creating a broad platform that we can build upon in the future.  This acquisition significantly enhances our high-specification floater and jackup fleets, adding technologically advanced drillships and semisubmersibles, and refreshing our premium jackup fleet to best position ourselves for the market recovery."

The transaction will join two leading offshore drillers - combining long-established histories of operational, safety and technical expertise with high-quality assets that cover the world's most prolific offshore drilling basins.

The combined company will have a fleet of 63 rigs, comprised of ultra-deepwater drillships, versatile deep- and mid-water semisubmersibles and shallow-water jackups, along with a diverse customer base of 27 national oil companies, supermajors and independents.

 

The jackup fleet will be the largest in the world, composed of 37 rigs, including 27 premium units.  These jackups are all equipped with many of the advanced features requested by clients for shallow-water drilling programs, such as increased leg length, expanded cantilever reach, greater hoisting capacity and offline handling capabilities.

The combined company will be among the most geographically diverse drillers with current operations and drilling contracts spanning six continents in nearly every major deep- and shallow-water basin around the world.  Regions will include major markets such as the Gulf of Mexico, Brazil, West Africa, Middle East, North Sea, Mediterranean and Asia Pacific.

Ensco's executive management will continue with Carl Trowell as President and Chief Executive Officer, Carey Lowe as Executive Vice President and Chief Operating Officer, and Jon Baksht as Senior Vice President and Chief Financial Officer.

Ensco plc's Chairman will continue to be Paul Rowsey and the board of directors will include Carl Trowell, plus two members from Atwood's current board effective at closing.   

Adjusted for the expected retirement of Atwood's outstanding revolving credit facility with cash and short-term investments on hand, total available liquidity was US$3.9bn on 31 March 2017 and included US$1.6bn of cash and short-term investments.

The estimated enterprise value of the combined company is US$6.9bn, based on the closing price of each company's shares on 26 May 2017. The combined company will have approximately US$3.7bn in revenue backlog.

The transaction is subject to approval by the shareholders of Ensco and Atwood. The transaction is not subject to any financing conditions. The companies anticipate that the transaction could close as soon as calendar third quarter 2017.

Alain Charles Publishing, University House, 11-13 Lower Grosvenor Place, London, SW1W 0EX, UK
T: +44 20 7834 7676, F: +44 20 7973 0076, W: www.alaincharles.com

twn Are you sure that you want to switch to desktop version?