Patterson-UTI To Acquire Multi-Shot From Denham Capital And NGP Energy Capital For US$215 Million

Published: Sep 05 2017
Deal Summary

Patterson-UTI Energy, Inc., an oilfield services company, entered into an agreement to acquire Multi-Shot, LLC (dba MS Energy Services), a provider of drilling services, from Denham Capital Management LP and NGP Energy Capital Management, L.L.C, both private equity firms. The transaction is estimated to be valued at approximately US$215 million (MM).

Under the terms, Patterson-UTI will finance the consideration through the payment of US$75 MM in cash, and the remaining US$140 MM will be payable through the issuance of 8.8 MM shares, based on the most recent closing price of Patterson-UTI common stock of US$15.94. Patterson-UTI will pay for the cash portion of the consideration through cash on hand and under its revolving line of credit.

Multi-Shot provides directional drilling services such as directional drilling, downhole performance motors, directional surveying, measurement while drilling, and wireline steering tools.

Simmons & Company International Ltd is acting as financial advisor to Denham Capital and NGP Energy Capital in the transaction. Vinson & Elkins LLP is acting as legal advisor to Multi-Shot, Denham Capital, and NGP Energy Capital in the transaction.

The transaction will enable Patterson-UTI to expand its service offerings. Denham Capital Management and NGP Energy Capital Management intend to use the proceeds from the sale to repay their outstanding debt.

The transaction is expected to be completed early in the fourth quarter of 2017, subject to customary closing conditions, receipt of approval from third parties, and expiration of waiting period under the Hart-Scott-Rodino Act.

Andy Hendricks, CEO of Patterson-UTI, said, "MS Energy has assembled a strong group of talented employees and is well known within the industry for their great reputation in directional drilling services and high-performance drilling motors. Additionally, they have differentiated themselves within the directional drilling industry through a strong focus on technology. MS Energy has proprietary mud motor, MWD and survey equipment that was designed, engineered and manufactured in-house. Their internally-developed and patented clean communications technology enables high-speed electromagnetic MWD telemetry independent of geological formation constraints in pad drilling, which saves E&P companies considerable drilling time and expense."

Allen R. Neel, chairman and CEO of Multi-Shot, said, “We look forward to combining our industry leading directional services and technology with Patterson-UTI's state of the art drilling rig technology to enhance Patterson-UTI's position as a leading oilfield services company."

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