FX.co ★ Nabors Industries To Buy Parker Wellbore In Stock, Debt Deal; Stock Down In Pre-market

Nabors Industries Ltd. announced on Tuesday its intent to acquire Parker Wellbore, a drilling services provider, through the issuance of 4.8 million Nabors shares along with taking on net debt amounting to approximately $100 million. This deal is subject to a share price collar.

Nabors’ stock experienced a decline of about 2.7% in pre-market trading on the NYSE, falling to $75.40.

Both the Boards of Nabors and Parker have approved the transaction, which is anticipated to be finalized in early 2025, contingent upon customary closing conditions and requisite approvals from shareholders and regulatory bodies.

The acquisition is poised to deliver immediate positive effects on Nabors' free cash flow, with further accretion expected as synergies in expenses and revenues are realized over time.

Parker Wellbore operates in global energy markets, notably through its subsidiary Quail Tools, which is a significant provider of high-performance downhole tubular rentals in the U.S. Its assets include a fleet of 17 drilling rigs operating in both the U.S. and international markets.

This acquisition enhances Nabors' portfolio by incorporating a large-scale, high-performance tubular rental and repair service operation.

The combined entity reported an adjusted EBITDA of $527 million for the first half of the year. Parker projects an EBITDA of $180 million for the full year of 2024.

Nabors anticipates capturing up to $35 million in annualized expense synergies, with the majority being realized within the first year following the deal’s completion.

Anthony Petrello, Chairman, President, and CEO of Nabors, stated, "Acquiring Parker expands our high-margin, capital-expenditure-light Nabors Drilling Solutions globally, while reinforcing our geographical presence in the international drilling rig market. This acquisition is expected to ensure profitable growth and improved leverage metrics owing to Parker’s robust free cash flow and solid capital structure."