Smith International nabs driller for $3.2B
Oilfield services provider Smith International said Tuesday it will buy W-H Energy Services Inc. in a deal valued at roughly $3.2 billion, a combination that will broaden Smith’s offerings in key drilling services markets.
Smith International Inc (SII, Fortune 500). will pay $56.10 cash and 0.48 Smith shares for each W-H Energy share outstanding, the Houston-based companies said. Based on Smith’s closing price Monday, the deal values W-H at about $93.55 per share, a 9.4% premium to its close.
W-H Energy (WHQ) shares shot up more than 9%, or $7.86, to $93.40 in trading Tuesday, well above their 52-week high. Smith shares rose 78 cents, or about 1%, to $78.80.
The coupling of Smith with the diversified oilfield services company, gives Smith an important entry into the directional drilling market, a growing arena as oil and gas companies find themselves extracting fossil fuels in increasingly complex fields.
"The combined companies should be significantly strengthened in both drilling and completion product and service offerings," said Smith chief executive Doug Rock.
Oil companies hire service providers for a variety of well-site jobs that can include seismic tests, directional drilling and reservoir management payday loan. Two of the biggest players are Schlumberger Ltd. and Halliburton Co.
Companies in the sector have benefited in recent quarters from frenetic oilfield activity spurred by record crude and high natural-gas prices.
Smith has about 200.9 million shares outstanding and plans to issue 15.5 million new shares to W-H Energy holders.
The combination, which requires regulatory approval, is expected to be completed in the third quarter. At that time, Smith’s current stockholders are expected to own 93% of the company.
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