2010-08-31-2010-08-13-2011-02-24
Acquired Houston-based oilfield services company with international assets.
Seawell Ltd., Hamilton, Bermuda, a subsidiary of Seadrill Ltd., Oslo, (NYSE: SDRL; Oslo: SDRL) has completed the acquisition of Houston-based oilfield services company Allis-Chalmers Energy Inc. (NYSE: ALY) for US$890 million, including assumed debt. Allis-Chalmers will merge into Wellco Sub Co., a wholly owned subsidiary of Seawell.
Subsequently, each share of Allis-Chalmers stock will be converted into either $4.25 in cash or 1.15 common shares of Seawell, depending on elections made by the Allis-Chalmers stockholders. Seawell and Allis-Chalmers anticipate that the final election results will be determined by March 4.
Allis-Chalmers provides oilfield drilling services and equipment to domestic oil and gas E&Ps primarily in Texas, Louisiana, New Mexico, Oklahoma, Arkansas and offshore in the Gulf of Mexico. Additionally, the company has international services in Argentina, Brazil, the North Sea, the Middle East, Africa, Southeast Asia/Pacific and Mexico.
The combined company will have approximately 6,500 employees and is projected by equity research analysts to have estimated revenues of US$1.3 billion, and a contribution to capital or EBITDA of US$195 million in 2010.
The combined drilling services offering includes platform drilling, land contract drilling, modular rigs, maintenance of drilling systems, directional drilling technology, underbalanced drilling, facility engineering services, rig and riser inspections and oilfield rentals. The company will be able to provide its customers with fully integrated drilling services, both onshore and offshore, with more than 4,000 experienced drilling crew members and senior directional drillers.
The well services offering includes electric and mechanical wireline services, production logging services, coil tubing services, ultrasonic investigation logging services, down-hole cameras, and advanced well fishing services. The combined company has a long track record of safe and efficient operations in the North Sea, USA and South America.
Seawell's executive chairman Jorgen Peter Rasmussen is now the combined company's new chief executive officer and president, and a board member. The new company's chief operating officer and executive vice president is Seawell Management AS CEO Thorleif Egeli.
The nonexecutive chairman of Seawell is Lime Rock Partners V LP managing director Saad Bargach, and Tor Olav Trøim will continue as vice chairman. Other board members include Alejandro Bulgheroni, Cecilie Fredriksen, Giovanni Dell' Orto and John Reynolds of Lime Rock. Allis-Chalmers chairman and CEO Munawar H. Hidayatallah is senior advisor to the new board.
Lime Rock previously entered an agreement with Seawell pursuant to which Lime Rock has, among other things, agreed that if it voted in favor of the merger, it would elect to receive Seawell common shares in respect of the Allis-Chalmers preferred and common stock that it holds. Pursuant to this agreement, Lime Rock has also agreed to vote its Allis-Chalmers shares against any alternative transaction for a period of nine months following any termination of the merger agreement.
Alpha Corporate Finance and Goldman Sachs International were financial advisors to Seawell. Skadden, Arps, Slate, Meagher & Flom LLP and Wiersholm, Mellbye & Bech, advokatfirma AS were legal advisors to Seawell.
RBC Capital Markets Corp. was financial advisor to Allis-Chalmers, and rendered a fairness opinion to its board. Andrews Kurth LLP and Thommessen were legal advisors to Allis-Chalmers.