Daily Newsletter

08 September 2023

Daily Newsletter

08 September 2023

Precision Drilling signs deal to buy CWC Energy Services

CWC shareholders will get 947,909 Precision shares worth C$88m and C$14m in cash.

Shivam Mishra September 08 2023

Precision Drilling has signed a deal to buy Canadian company CWC Energy Services in a cash and stock deal valued at C$141m ($103.2m).

As per the terms of the deal, which expands Precision’s operations in the US and Canada, CWC shareholders will get 947,909 Precision shares worth C$88m and C$14m in cash.

The deal also includes assumption of CWC’s debt of around C$40m.

Specifically, with this deal Precision expands its fleet by adding 62 marketed servicing rigs and seven marketed drilling rigs in Canada, and 11 marketed drilling rigs in the US, including seven AC triple rigs.

The other acquisition highlights include well-maintained assets in areas spread across Canada and the US, supported by knowledgeable and experienced staff and solid client connections, Precision noted.

Following CWC’s integration, Precision hopes to achieve annual operating savings of around C$20m.

Furthermore, the drilling company has identified excess CWC real estate worth around C$20m, which is expected to be monetised after the deal closes.

Precision president and CEO Kevin Neveu said: “This acquisition supports our high-performance, high-value strategy as it allows us to expand our service offering in both Canada and the US with high-quality rigs and field personnel.

“With the expected synergies and by further leveraging our scale, we believe the transaction will be accretive to earnings and provide significant cash flow to drive shareholder returns and support our debt-reduction strategy.”

CWC president and CEO Duncan Au said: “Today we announce a strategic combination with Precision which has the size and scale that will allow for expanded opportunities for our employees, enhanced services for our customers, and CWC shareholder participation in one of the leading innovative companies in our industry.”

Subject to customary closing conditions, the deal is expected to close in the fourth quarter of 2023.

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