Weatherford Acquires Precision Energy Services and International Drilling Divisions for $2.28 billion
Posted: 06 June 2005
Weatherford International Ltd. has signed a definitive agreement to purchase Precision Drilling Corporation’s Energy Services Division and International Contract Drilling Division
Under the terms of the agreement, Weatherford will pay approximately US$2.28 billion, consisting of 26 million Weatherford common shares and approximately US$900 million in cash, based on current exchange rates. The cash portion of the consideration is payable in Canadian dollars. Acquired net book value is about US$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.
Hank B, Swartout, Chairman, President and Chief Executive Officer of Precision stated, “This transaction is the result of an extensive process undertaken by the board of directors to explore possible avenues of value creation for our shareholders. After careful consideration of various strategic alternatives, the board determined this opportunity to be the best for our shareholders and for employees of the respective divisions. We believe the strategic fit with Weatherford will strengthen their global presence and provide opportunities for all stakeholders affected by this expanded Weatherford organization – shareholders, customers and employees. It is currently anticipated that a portion of the consideration received by Precision will be distributed to our shareholders following completion of the sale.”
Bernard J. Duroc-Danner, Chairman, President and Chief Executive Officer of Weatherford commented, “What we are adding from Precision consolidates, strengthens and broadens critical segments of our business. Weatherford in turn will provide the Precision operations with the full support of our infrastructure, in particular in the Eastern Hemisphere . This is a growth strategy for shareholder value.”
Posted by Editor Pipeline Magazine
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