Press Release

Nabors Announces Agreement to Acquire Tesco Corporation in an All-Stock Transaction

Company Release - 8/14/2017 6:00 AM ET

HAMILTON, Bermuda, Aug. 14, 2017 /PRNewswire/ --

Transaction Highlights:

  • Accelerates the automation and integration of tubular services into Nabors rigs and creates immediate global scale for Nabors Drilling Solutions
  • Combines complementary portfolio of products, services and technologies to enhance Nabors position as a leading worldwide player in drilling equipment and performance software
  • Strengthens Nabors financial position through substantial commercial and operational synergies
  • Brings experienced Tesco management, employees, and technology into Nabors operations

Nabors Industries Ltd. ("Nabors") (NYSE: NBR) is pleased to announce that the company has signed an Arrangement Agreement ("Agreement") to acquire all of the issued and outstanding common shares of Tesco Corporation ("Tesco") (NASDAQ: TESO), with each outstanding share of common stock of Tesco being exchanged for 0.68 common shares of Nabors. This transaction will create a leading rig equipment and drilling automation provider by combining Canrig, Nabors rig equipment subsidiary, with Tesco's rig equipment manufacturing, rental and aftermarket service business. Additionally, Tesco operates a tubular services business in numerous key regions globally, which will immediately benefit Nabors Drilling Solutions' operation.

Nabors is uniquely positioned to automate and integrate tubular services into its global rig footprint. By combining its complementary products, tools and technologies, they will be able to offer customers more fit-for-purpose products, services and solutions. This expanded capability will enable them to further improve operational efficiency, accelerate and scale its development of new and innovative equipment on its new generations of rigs as well as upgrade older classes of rigs for a new age of drilling.

This transaction values Tesco common stock at $4.62 per share based on the closing price of Nabors shares on the New York Stock Exchange on August 11, 2017, which represents a 19% premium of the closing value of Tesco shares on the NASDAQ Stock Market on August 11, 2017. The transaction is subject to regulatory approval and customary closing conditions and is expected to close in the fourth quarter.

"The addition of Tesco to our company represents another step forward for both our rig equipment and Nabors Drilling Solutions business. Tesco is respected for the quality of their product offerings and aftermarket service levels. I am eager to realize the benefits to our combined customers and shareholder groups that this combination will provide," said Nabors Chairman, President and Chief Executive Officer Anthony G. Petrello.

Michael W. Sutherlin, Tesco's Non-Executive Chairman of the Board, said, "With this transaction, Tesco will now have an expanded platform, which will allow for acceleration of its strategy and increase the potential for market share gains around key industry trends. The combination will provide significant value to Tesco shareholders by participating in a stronger and broader offering of complementary rig equipment product lines and tubular services." 

Fernando Assing, Tesco's President and Chief Executive Officer, commented, "This is a very exciting opportunity to combine two world class companies that are highly focused on delivering best-in-class services to the oil and gas industry. This combination will further reinforce Nabors position as a leading rig equipment and drilling automation provider by integrating Tesco's advanced tubular services technology and products into the Nabors global rig footprint and NDS services. The new expanded platform also creates significant career opportunities for Tesco's employees as part of a much larger international organization."

Mr. Petrello concluded, "This transaction accelerates the strategy I presented at our Analyst Day in November of 2016. Several years ago we concluded that the drilling rig will serve as the delivery platform for future rig services. The early success of our service integrations efforts are substantiating this strategy. Now, with the largest land drilling fleet and with the automation features of our Rigtelligence® operating system, Nabors is uniquely positioned to further deploy Tesco's premium casing running tools and automation technologies globally. Additionally, the combination of our complementary rig equipment product lines and technologies will deliver enhanced value to both our customers and our shareholders. Finally, the incremental cash flow and the realization of expected synergies combined with Tesco's solid balance sheet will further strengthen our financial position. First year operating synergies are expected to approach $20 million with full run-rate operating synergies of $30 to $35 million. In addition, we expect to realize capital savings from facility rationalization and the planned build out of our casing running operation. We are excited about Tesco's respected management team and highly skilled employees joining Nabors and helping to deliver the benefits of this combination to our customers and shareholders."   

The transaction has been approved by the boards of directors of both companies and is subject to approval by Tesco shareholders and the satisfaction of customary closing conditions and regulatory approvals. Intrepid Partners served as exclusive financial advisor to Nabors. Milbank, Tweed, Hadley, & McCloy LLP and Stikeman Elliott LLP served as legal advisors to Nabors. 

About Nabors Industries

Nabors Industries (NYSE: NBR) owns and operates the world's largest land-based drilling rig fleet and is a leading provider of offshore platform rigs in the United States and numerous international markets. Nabors also provides directional drilling services, performance tools, and innovative technologies throughout many of the most significant oil and gas markets. Leveraging our advanced drilling automation capabilities, Nabors highly skilled workforce continues to set new standards for operational excellence and transform our industry.

MEDIA CONTACT:

Dennis A. Smith, Vice President of Corporate Development & Investor Relations, +1 281-775-8038 or Nick Swyka, Director of Corporate Development & Investor Relations, +1 281-775-2407.

To request investor materials, contact Nabors corporate headquarters in Hamilton, Bermuda at +441-292-1510 or via e-mail at mark.andrews@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 (the "Securities Act") 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. Risks and uncertainties related to the Acquisition include, but are not limited to: the failure of the Tesco shareholders to approve the proposed transaction; the risk that the conditions to the closing of the proposed transaction are not satisfied; the risk that regulatory approvals required for the proposed transaction are not obtained or are obtained subject to conditions that are not anticipated; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed transaction; uncertainties as to the timing of the proposed transaction; competitive responses to the proposed transaction; costs and difficulties related to the integration of Tesco's businesses and operations with Nabors business and operations; the inability to obtain, or delays in obtaining, cost savings and synergies from the proposed transaction; unexpected costs, charges or expenses resulting from the proposed transaction; litigation relating to the proposed transaction; the inability to retain key personnel; and any changes in general economic and/or industry specific conditions. 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. 

Additional Information About the Proposed Transaction

This release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of a vote or proxy. The proposed transaction anticipates that the sale of Nabors shares will be exempt from registration under the Securities Act, pursuant to Section 3(a)(10) of the Securities Act. Consequently, the Nabors shares will not be registered under the Securities Act or any state securities laws.

In connection with the proposed transaction, Tesco intends to file with the SEC a proxy statement in respect of the meeting of its shareholders to approve the Arrangement, and other relevant documents to be mailed by Tesco to its shareholders in connection with the Arrangement. Tesco's proxy statement will also be filed with the Canadian securities regulators. WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION about Tesco, 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 and the Canadian securities regulators free of charge at the SEC's website, www.sec.gov and at the System for Electronic Document Analysis and Retrieval (SEDAR) maintained by the Canadian Securities Administrators at www.sedar.com. In addition, a copy of Tesco's proxy statement (when it becomes available) may be obtained free of charge from Tesco's investor relations website at http://www.tescocorp.com. Investors and security holders may also read and copy any reports, statements and other information filed by Tesco, with the SEC, at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SEC's website for further information on its public reference room.

Participants in the Solicitation

Tesco and its directors, executive officers and certain other members of management and employees may be deemed to be participants in the solicitation of proxies for its security holder approvals to be obtained for the proposed transaction. Information regarding Tesco's directors and executive officers is available in its proxy statement filed with the SEC by Tesco on March 27, 2017 in connection with its 2017 annual meeting of shareholders. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC and the Canadian securities regulators when they become available. This release shall not constitute an offer to sell or the solicitation of any offer to buy any securities, 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.

 

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SOURCE Nabors Industries Ltd.