HAMILTON,
Bermuda, Oct. 15, 2024 /PRNewswire/ -- Nabors
Industries Ltd. ("Nabors") (NYSE: NBR) and Parker Wellbore
("Parker") today announced a definitive agreement under which
Nabors will acquire all of Parker's issued and outstanding common
shares in exchange for 4.8 million shares of Nabors common stock,
subject to a share price collar.
Parker provides drilling services across
global energy markets. Through its Quail Tools subsidiary, Parker
is the leading rental provider of high-performance downhole
tubulars in the U.S. market. Internationally, Parker provides
tubular rentals and repair services, with state-of-the-art
facilities located in key geographies. Parker offers
differentiated, casing and tubular running services in the U.S.,
the Middle East, Latin America, and Asia. Its portfolio also includes a fleet of
17 drilling rigs in the U.S. and international markets, as well as
Operations & Maintenance services primarily in Canada and Alaska.
Anthony
Petrello, Chairman, President & CEO of Nabors,
commented, "This transaction brings together two of the storied
names in our industry. The acquisition of Parker expands our high
margin, capex-light Nabors Drilling Solutions global business,
while solidifying the geographical footprint of our international
drilling rig business. With Parker's resilient free cash flow and
healthy capital structure, this acquisition also is expected to
deliver profitable growth together with improved leverage
metrics.
"Over the past five years, Parker has
achieved an impressive record of increasing results and we expect
this expansion to continue. We are excited to welcome Parker's
highly capable team to Nabors. With Nabors' extensive global
technology platform, we are confident we will extend Parker's
success even further."
Sandy
Esslemont, President and CEO of Parker commented,
"We believe Nabors is the ideal partner to build on
Parker's 90-year reputation and performance. Parker's leading
position across key product lines and geographic markets aligns
neatly with the Nabors' footprint. Our portfolio and technology
offerings combined with Nabors' leading drilling solutions business
and strong capital structure are expected to provide
significant benefits to both Nabors' and Parker's customers,
investors and the industry at large."
Robust Strategic and Financial
Rationale
Materially strengthens Nabors Drilling
Solutions business
This acquisition adds a large-scale, high
performance tubular rental and repairs services operation to the
Nabors portfolio. Growth in wellbore lateral lengths is a key
driver to increasing demand for drill pipe, both in the U.S. and in
other important markets.
Parker's casing running business
complements Nabors' own tubular services and affords the
opportunity to migrate to Nabors' integrated casing running model.
Nabors expects this combination will establish the industry's third
largest provider, with presence in several key
geographies.
Immediately additive to Free Cash
Flow
The transaction is expected to result in
immediate accretion to Nabors' free cash flow. It is further
expected to be increasingly accretive to valuation metrics as
expense and revenue synergies are progressively
realized.
Enhances scale and improves leverage
metrics
On a combined company basis, adjusted
EBITDA for the first six months of 2024 totaled $527 million. For the full year 2024, Parker
expects to generate EBITDA of $180
million. With meaningful incremental EBITDA and only
$100 million in additional net debt,
the transaction is projected to improve Nabors' leverage
metrics.
Significant synergy
potential
Nabors expects to realize up to
$35 million of annualized expense
synergies, with the majority achieved during the first 12 months
post-closing. The primary drivers of these savings include
reductions in both duplicate overhead and operational expenses, as
well as savings in procurement. In addition to these amounts,
Nabors expects to combine its existing drill pipe rental operations
in the U.S. with Quail Tools, resulting in additional efficiency
savings and revenue opportunities. Nabors also plans to leverage
its global operations footprint to expand Parker's international
business.
Transaction details
The transaction has been approved by the
Nabors and Parker Boards of Directors. Nabors will acquire Parker
for 4.8 million shares and the assumption of net debt totaling
approximately $100 million. The
transaction is expected to close in early 2025, subject to
customary closing conditions, as well as shareholder and regulatory
approvals.
Conference call and
webcast
Nabors will host a conference call to
discuss the transaction. A slide presentation to accompany the
conference call will be posted to Nabors' investor relations
website. The call will be held on October
15, 2024, at 11:00 am CT with
Anthony Petrello, Nabors' Chairman,
President and CEO, William Restrepo,
Nabors' CFO, and other members of Nabors' senior management team.
Date:
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October 15,
2024
|
Time:
|
11:00 a.m. CT (12:00
p.m. ET)
|
|
|
Dial-in-number(s):
|
|
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US Toll
Free:
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(888)
317-6003
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Canada Toll
Free:
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(866)
284-3684
|
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International:
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(412)
317-6061
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Participant Elite Entry
Number:
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1384453
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About Nabors Industries
Nabors Industries (NYSE: NBR) is a leading
provider of advanced technology for the energy industry. With
presence in more than 20 countries, Nabors has established a global
network of people, technology and equipment to deploy solutions
that deliver safe, efficient and responsible energy production. By
leveraging its core competencies, particularly in drilling,
engineering, automation, data science and manufacturing, Nabors
aims to innovate the future of energy and enable the transition to
a lower-carbon world. Learn more about Nabors and its energy
technology leadership:
www.nabors.com.
Forward-looking Statements
The information included in this press
release includes forward-looking statements within the meaning of
the Securities Act of 1933 and the Securities Exchange Act of 1934.
Such forward-looking statements are subject to a number of risks
and uncertainties, as disclosed by Nabors from time to time in its
filings with the Securities and Exchange Commission. As a result of
these factors, Nabors' actual results may differ materially from
those indicated or implied by such forward-looking
statements. The forward-looking statements contained in this
press release reflect management's estimates and beliefs as of the
date of this press release. Nabors does not undertake to
update these forward-looking statements except as required by
law.
Non-GAAP Disclaimer
This press release may present certain "non-GAAP"
financial measures. The components of these non-GAAP measures
are computed by using amounts that are determined in accordance
with accounting principles generally accepted in the United States of America
("GAAP"). Adjusted EBITDA is computed similarly,
but also excludes depreciation and amortization expenses. In
addition, Adjusted EBITDA and adjusted operating income (loss)
exclude certain cash expenses that the Company is obligated to
make. Net debt is calculated as total debt minus the sum of cash,
cash equivalents and short-term investments.
Adjusted free cash flow represents net cash provided by
operating activities less cash used for capital expenditures, net
of proceeds from sales of assets. Nabors' management believes
that adjusted free cash flow is an important liquidity measure for
the company and that it is useful to investors and management as a
measure of the company's ability to generate cash flow, after
reinvesting in the company for future growth, that could be
available for paying down debt or other financing cash flows, such
as dividends to shareholders. Management believes that this
non-GAAP measure is useful information to investors when comparing
our cash flows with the cash flows of other companies.
Each of these non-GAAP measures has limitations and
therefore should not be used in isolation or as a substitute for
the amounts reported in accordance with GAAP. However, Nabors'
management evaluates the performance of its operating segments and
the consolidated Company based on several criteria, including
Adjusted EBITDA, adjusted operating income (loss), net debt, and
adjusted free cash flow, because it believes that these financial
measures accurately reflect the Company's ongoing profitability and
performance. Securities analysts and investors also use these
measures as some of the metrics on which they analyze the Company's
performance. Other companies in this industry may compute these
measures differently. These special items could
be meaningful.
Investor Contacts: William C. Conroy, CFA, Vice President of
Corporate Development & Investor Relations, +1 281-775-2423 or
via e-mail william.conroy@nabors.com, or
Kara Peak, Director of Corporate
Development & Investor Relations, +1 281-775-4954 or via
email kara.peak@nabors.com. To
request investor materials, contact Nabors' corporate headquarters
in Hamilton, Bermuda at
+441-292-1510 or via e-mail
mark.andrews@nabors.com
No Offer or Solicitation
This communication is not intended to and
shall not constitute an offer to sell or the solicitation of an
offer to sell or the solicitation of an offer to buy any securities
or a solicitation of any vote of approval, nor shall there be any
sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended.
Important Additional Information and
Where to Find It
In connection with the proposed transaction
Nabors will file with the SEC a Registration Statement on Form S-4
to register the shares of Nabors capital stock to be issued in
connection with the proposed transaction. The Registration
Statement will include a joint proxy statement/prospectus of Nabors
and Parker. The definitive joint proxy statement/prospectus will be
sent to the shareholders of each of Nabors and Parker seeking their
approval of the proposed transaction and other related
matters.
WE URGE INVESTORS AND SECURITY HOLDERS TO
READ THE REGISTRATION STATEMENT ON FORM S-4 AND THE JOINT PROXY
STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON
FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME
AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
PARKER, NABORS AND THE PROPOSED TRANSACTION. Investors and security
holders will be able to obtain these materials (when they are
available) and other documents filed with the SEC by Nabors or
Parker free of charge at the SEC's
website, www.sec.gov, or from Nabors
at its website, www.nabors.com, or from
Parker at its website,
www.parkerwellbore.com.
Participants in the
Solicitation
Nabors and certain of its directors,
executive officers and other employees, and Parker and certain of
its directors, executive officers and other employees may be deemed
to be participants in the solicitation of proxies for security
holder approvals to be obtained for the proposed transaction. A
description of participants' direct or indirect interests, by
security holdings or otherwise, will be included in the joint proxy
statement/prospectus relating to the proposed transaction when it
is filed with the SEC. Information regarding Nabors' directors and
executive officers is available in its proxy statement filed with
the SEC on April 25, 2024 in
connection with its 2024 annual meeting of shareholders (the
"Annual Meeting Proxy Statement") under "Proposal 1—Election of
Directors— Director Nominees," "Proposal 1—Election of
Directors—Other Executive Officers," "Compensation Discussion and
Analysis" and "Share Ownership of Directors and Executive
Officers." To the extent holdings of securities by potential Nabors
participants (or the identity of such participants) have changed
since the information printed in the Annual Meeting Proxy
Statement, such information has been or will be reflected on
Nabors' Statements of Change in Ownership on Forms 3 and 4 filed
with the SEC. You may obtain free copies of these documents using
the sources indicated above. Information regarding Parker's
directors and executive officers is available on Parker's website
as indicated above.
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SOURCE Nabors Industries Ltd.