Helmerich & Payne, Inc. and KCA Deutag International Limited have announced a definitive agreement under which H&P will acquire KCA Deutag for $1.9725 billion in cash.
KCA Deutag, a diverse global drilling company, has a significant land drilling presence in the Middle East, representing approximately two-thirds of its calendar year 2023 Operating EBITDA. The company also operates in South America, Europe, and Africa. Additionally, KCA Deutag manages asset-light offshore operations in the North Sea, Angola, Azerbaijan, and Canada, boasting a robust backlog and long-term earnings visibility. The company’s Kenera segment includes manufacturing and engineering businesses, such as Bentec, which serve the energy industry and represent long-term growth opportunities.
John Lindsay, president and CEO of H&P, stated, “This is a historic and transformative transaction for the Company. We are excited about what this means for H&P’s future, as it accelerates our international expansion, particularly in the Middle East, and enhances the Company’s global leadership in onshore drilling solutions. KCA Deutag’s assets and operations will add resilient revenues, providing greater earnings visibility and cash flow generation. As a result, we expect to generate sizeable incremental cash flows and are confident this transaction will deliver near- and long-term growth and value creation for H&P shareholders.”
Lindsay emphasized H&P’s managed approach to business amidst crude oil and natural gas volatility, highlighting the importance of this acquisition. He noted that acquiring KCA Deutag provides immediate scale in core Middle East markets, a feat challenging to achieve organically. Lindsay views the transaction as more than an asset acquisition, but as acquiring operations with quality personnel.
Joseph Elkhoury, CEO of KCA Deutag, remarked, “This announcement represents a significant milestone in the strategic transformation journey of KCA Deutag and delivers benefits to all stakeholders: our employees, customers, shareholders, and the communities where we live and work. We look forward to joining H&P, combining the strengths of our people together with our geographical footprint, to create an organization with an unrivalled global network, service capability, and technology offering. The size, scale, and financial strength of the combined organization will provide a stable foundation for long-term growth and diversification to safeguard a sustainable and prosperous future for our people.”
Elkhoury highlighted the similar customer-centric cultures of both companies, focused on safety and delivering quality services and innovative technology. He believes the transaction will accelerate efficiencies and optimize operational excellence for customers, delivering growth opportunities for employees and customers while facilitating value realization for investors.
John Lindsay concluded, “As a combined company, we will maintain our shared customer-centric approach and safety focus. We look forward to welcoming KCA Deutag’s talented employees to the H&P family and working together to provide exceptional performance and value to customers across our global markets, now on a much larger scale.”
For more information visit www.helmerichpayne.com
