Nabors Industries Ltd. and Parker Wellbore have announced a definitive agreement in which Nabors will acquire all of Parker’s issued and outstanding common shares in exchange for 4.8 million shares of Nabors common stock. This transaction is subject to a share price collar and is set to significantly enhance Nabors’ business operations across the global energy markets.
Parker Wellbore, a prominent provider of drilling services, operates through its Quail Tools subsidiary, which leads the U.S. market in high-performance downhole tubular rentals. Internationally, Parker offers tubular rentals, repairs, and differentiated casing and tubular running services across key regions, including the U.S., Middle East, Latin America, and Asia. Its portfolio includes a fleet of 17 drilling rigs as well as Operations & Maintenance services in Canada and Alaska.
Anthony Petrello, Chairman, president, and CEO of Nabors, expressed enthusiasm about the merger:
“This transaction unites two well-established names in the industry. The acquisition expands our high-margin, capex-light Nabors Drilling Solutions global business and enhances our international drilling rig footprint. Parker’s strong free cash flow and capital structure will also contribute to profitable growth and improved leverage.”
Petrello further praised Parker’s success over the past five years and welcomed the addition of Parker’s experienced team to Nabors. He highlighted the opportunities to leverage Nabors’ technology platform to extend Parker’s success globally.
Sandy Esslemont, president and CEO of Parker Wellbore, also remarked:
“Nabors is the ideal partner to build upon Parker’s 90-year reputation. Our strong market position in key regions and product lines aligns seamlessly with Nabors’ operations. Combining our strengths with Nabors’ capabilities will deliver substantial benefits to customers, investors, and the wider industry.”
Strengthening Nabors Drilling Solutions:
The acquisition will significantly bolster Nabors’ Drilling Solutions business, adding large-scale tubular rental and repair services. Parker’s casing running services will complement Nabors’ existing capabilities, positioning the combined company as the third-largest provider in the industry with an expanded presence in key geographies.
Immediate Cash Flow Boost:
The transaction is expected to contribute to Nabors’ free cash flow immediately and drive accretive valuation metrics as synergies are realized.
Enhanced Scale and Leverage Metrics:
With a combined adjusted EBITDA of $527 million for the first half of 2024 and Parker’s projected full-year EBITDA of $180 million, the merger is anticipated to improve Nabors’ leverage. The deal includes only $100 million in additional net debt, further strengthening financial metrics.
Synergy Potential:
Nabors anticipates realizing up to $35 million in annualized expense synergies within the first year of closing. These savings will come from reducing duplicate overhead, operational costs, and procurement efficiencies. Nabors also plans to combine its U.S. drill pipe rental operations with Quail Tools for added revenue opportunities and to expand Parker’s international business footprint through Nabors’ global operations.
The merger represents a robust strategic move for both companies, offering enhanced operational capabilities and growth potential in the energy sector.
For more information visit www.nabors.com
