Nabors acquiring Tesco for $215 million
Nabors Industries said Monday it will buy Houston-based Tesco Corp. in an all-stock deal that values Tesco at more than $215 million as Nabors bids to enhance its strengths in drilling and well construction.
The all-stock deal buys Tesco at a 19 percent premium from its closing share price Friday, which was less than half of its value at the beginning of 2017.
The deal combines two oilfield services companies that operate out of Houston, although Nabors is formally domiciled in Bermuda for tax purposes. Tesco was founded in Calgary, but moved its headquarters to Houston a decade ago, although much of its manufacturing remains in Canada.
“The addition of Tesco to our company represents another step forward for both our rig equipment and Nabors Drilling Solutions business. Tesco is respected for the quality of their product offerings and aftermarket service levels,” said Nabors Chairman and CEO Anthony Petrello in the announcement.
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Nabors touts itself as the world’s largest owner of land-based drilling rigs, a business positioned to benefit from the latest shale oil boom in Texas. Tesco focuses on drilling rig equipment, tools and technologies.
The deal values Tesco at $4.62 per share, versus its Friday close of $3.90. Tesco traded at $9 per share at the beginning of 2017 and at more than $20 per share in mid-2014 before the oil bust sank in.
As part of the deal, Tesco shareholders would own about 10 percent of Nabors’ outstanding shares.