Precision Drilling has Canadian company CWC Energy Services in a cash and stock deal valued at C$141m ($103.2m).
As per the terms of the deal, which expands Precision鈥檚 operations in the US and Canada, CWC shareholders will get 947,909 Precision shares worth C$88m and C$14m in cash.
The deal also includes assumption of CWC鈥檚 debt of around C$40m.
Specifically, with this deal Precision expands its fleet by adding 62 marketed servicing rigs and seven marketed drilling rigs in Canada, and 11 marketed drilling rigs in the US, including seven AC triple rigs.
The other acquisition highlights include well-maintained assets in areas spread across Canada and the US, supported by knowledgeable and experienced staff and solid client connections, Precision noted.
Following CWC鈥檚 integration, Precision hopes to achieve annual operating savings of around C$20m.
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By GlobalDataFurthermore, the drilling company has identified excess CWC real estate worth around C$20m, which is expected to be monetised after the deal closes.
Precision president and CEO Kevin Neveu said: 鈥淭his acquisition supports our high-performance, high-value strategy as it allows us to expand our service offering in both Canada and the US with high-quality rigs and field personnel.
鈥淲ith the expected synergies and by further leveraging our scale, we believe the transaction will be accretive to earnings and provide significant cash flow to drive shareholder returns and support our debt-reduction strategy.鈥�
CWC president and CEO Duncan Au : 鈥淭oday we announce a strategic combination with Precision which has the size and scale that will allow for expanded opportunities for our employees, enhanced services for our customers, and CWC shareholder participation in one of the leading innovative companies in our industry.鈥�
Subject to customary closing conditions, the deal is expected to close in the fourth quarter of 2023.
