Nabors Industries Ltd. (NBR) announced Tuesday a definitive agreement to acquire drilling services provider Parker Wellbore in exchange for 4.8 million shares of Nabors stock, subject to a share price collar, and the assumption of net debt totaling around $100 million.
In pre-market activity on the NYSE, Nabors shares were losing around 2.7 percent to trade at $75.40.
The transaction, which has been approved by the Nabors and Parker Boards of Directors, is expected to close in early 2025, subject to customary closing conditions, as well as shareholder and regulatory approvals.
The acquisition is expected to result in immediate accretion to Nabors' free cash flow. It is further expected to be increasingly accretive to valuation metrics as expense and revenue synergies are progressively realized.
Parker provides drilling services across global energy markets. Parker, through its Quail Tools subsidiary, is a rental provider of high-performance downhole tubulars in the U.S. market. Its portfolio also includes a fleet of 17 drilling rigs in the U.S. and international markets.
The deal adds a large-scale, high performance tubular rental and repairs services operation to the Nabors portfolio.
On a combined company basis, adjusted EBITDA for the first six months totaled $527 million. For the full year 2024, Parker expects to generate EBITDA of $180 million.
Nabors further expects to realize up to $35 million of annualized expense synergies, with the majority achieved during the first 12 months post-closing.
Anthony Petrello, Chairman, President & CEO of Nabors, said, "The acquisition of Parker expands our high margin, capex-light Nabors Drilling Solutions global business, while solidifying the geographical footprint of our international drilling rig business. With Parker's resilient free cash flow and healthy capital structure, this acquisition also is expected to deliver profitable growth together with improved leverage metrics."
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