Nabors Industries, a US-based provider of advanced technology for energy sector, is set to acquire Parker Wellbore, a leading global drilling services group.

The acquisition will involve Nabors acquiring 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 the US, the Middle East, Latin America, and Asia, with a fleet of 17 drilling rigs in the US 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.”

The acquisition is expected to materially strengthen Nabors Drilling Solutions business, adding a large-scale, high-performance tubular rental and repairs services operation to the Nabors portfolio.

The combination of Parker's casing running business complements Nabors' own tubular services and allows the opportunity to migrate to Nabors' integrated casing running model.

The transaction is expected to result in immediate accretion to Nabors' free cash flow and be increasingly accretive to valuation metrics as expense and revenue synergies are realised.

Nabors expects to realise up to $35 million of annualised expense synergies, with the majority achieved during the first 12 months post-closing.The primary drivers of these savings include reductions in duplicate overhead and operational expenses, as well as savings in procurement.

 Nabors plans to combine its existing drill pipe rental operations in the US with Quail Tools, resulting in additional efficiency savings and revenue opportunities. The transaction has been approved by the Nabors and Parker Boards of Directors. -TradeArabia News Service