Parker Drilling Acquires International Tubular Services Limited, A Premier International Rental Tools and Well Services Provider
Parker Drilling Company, an international drilling contractor anddrilling services and rentaltools provider, announced today the acquisition of International Tubular Services Limited and certain affiliates(ITS),subsidiaries of ITS Tubular Services(Holdings) Limited, a privately held internationalrentaltools and wellservices company. In line with Parker?sstrategic goalto offer additional integrated products,services and expertise to international energy exploration and production (E&P) operators and drilling contractors,the acquisition significantly expands Parker?s Rental
Tools businessto include ITS?strong customer base in growing internationalmarkets and additional well
services. The business combination also creates opportunitiesto increase financial performance by
leveraging operating costs and realizing tax benefits.
ITS is a leading independent provider ofrentaltools and wellservices with 2012 annualrevenues of $119million. Principal activities are renting drilling tubulars and pressure control equipment and providing casing running and fishing services. ITS serves an extensive customer base of E&P companies, drilling contractors and service companiesfrom 22 operating facilities primarily located in the Middle East, Latin America,U.K. and Europe, and the Asia?Pacific region. Underthe terms ofthe agreement,Parker paid $125million forITS. An initial purchase price of $101million was paid atthe closing and an additional $24million was deposited into an escrow account, which will either be paid to ITS Tubular Services(Holdings) Limited as additional purchase price when certain consents are obtained or, in certain circumstances,released to Parker. The transaction wasfinanced with a $125million term loan provided by Goldman Sachs BankUSA.
?Today we are furtherinvesting in a businesssegment we know well and an internationalrentaltools growth strategy that we?ve focused on forsome time,? said Gary Rich, president and chief executive officer of Parker Drilling. ?ITS is one ofthe industry?sleading independentinternationalrentaltools and wellservice companies with a broad footprint and a strong portfolio of products and service capabilities.By expanding our geographic presence and services offering, we are positioning ourselvesto better serve the growing needs of international E&P operators and drilling contractors.? Joe Chandler, previously chief executive officer of International Tubular Services(Holdings) Limited and now vice president of Parker?sInternational Rental Tools business unit, commented, ?Thisis an exciting combination. With the support of Parker, ITS is now in a better condition to provide the bestsolutions for our customers. As part of Parker, a company with a respected reputation, financialstrength, process discipline and dedication to people, we expectto continue to grow our ability to deliver premier rentaltoolsservices on a globalscale.?
?This acquisition createsimmediate advantagesfor Parker,? Mr. Rich said. ?Itincreases our geographicand productline diversity and enhances our ability to deliverinnovative,reliable and efficientresultsto our customers. We are confidentthistransaction will provide attractive financialreturns and compelling cost and tax benefitsthat will improve profitability and drive increased value for our shareholders.?
Forthistransaction,Goldman, Sachs&Co. acted asfinancial advisor, Ernst&Young LLP provided advisory services, and Baker Botts LLP acted as Parker?slegal advisor.
