Oil States International, Inc. (OIS - Free Report) is set to acquire private-backed GEODynamics, Inc. in a cash-and-equity transaction worth $525 million. Oil States will pay $300 million in cash and $200 million by issuing 8.66 million shares.
The company plans to fund the cash portion using borrowings under its amended revolving credit facility. The remaining $25 million will be financed by the unsecured promissory note payable to sellers, carrying an interest rate of 2.5%. Subject to satisfactory closing conditions and regulatory approvals, the deal is expected to complete during the first quarter of 2018.
With locations around the world, Oil States is a leading manufacturer of products for deepwater production facilities and subsea pipelines, and a leading supplier of a broad range of services to the oil and gas industry. Meanwhile, GEODynamics, also in the oilfield service space, is a provider of technical products and services – from locating hydrocarbons to optimizing production through the life of the field – to companies drilling oil and gas wells.
Therefore, the acquisition is expected to be accretive to Oil States.
The acquisition of complementary assets will boost the revenues and expand the current customer base of Oil States. In particular, it gives Oil States the exposure to the valuable and growing downhole consumables market.
The company expects to gain from the operational, commercial and financial synergies. Oil States is set to benefit from increased cost efficiencies by providing a broader set of product offerings through its combined global infrastructure and supply chain optimization.
GEODynamics is primarily focused in North America and is expected to benefit from a wider distribution footprint that Oil States offers, enhancing the growth potential of the combined business. The opportunity to leverage the technology through a wider distribution network provides a significant growth opportunity.
Oil States — which counts Matrix Service Company (MTRX - Free Report) and McDermott International, Inc. as its peers among others — is organized in three business segments Offshore Products, Tubular Services and Well Site Services.
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Oil States International, Inc. (OIS - Free Report) is set to acquire private-backed GEODynamics, Inc. in a cash-and-equity transaction worth $525 million. Oil States will pay $300 million in cash and $200 million by issuing 8.66 million shares.
The company plans to fund the cash portion using borrowings under its amended revolving credit facility. The remaining $25 million will be financed by the unsecured promissory note payable to sellers, carrying an interest rate of 2.5%. Subject to satisfactory closing conditions and regulatory approvals, the deal is expected to complete during the first quarter of 2018.
With locations around the world, Oil States is a leading manufacturer of products for deepwater production facilities and subsea pipelines, and a leading supplier of a broad range of services to the oil and gas industry. Meanwhile, GEODynamics, also in the oilfield service space, is a provider of technical products and services – from locating hydrocarbons to optimizing production through the life of the field – to companies drilling oil and gas wells.
Therefore, the acquisition is expected to be accretive to Oil States.
The acquisition of complementary assets will boost the revenues and expand the current customer base of Oil States. In particular, it gives Oil States the exposure to the valuable and growing downhole consumables market.
The company expects to gain from the operational, commercial and financial synergies. Oil States is set to benefit from increased cost efficiencies by providing a broader set of product offerings through its combined global infrastructure and supply chain optimization.
GEODynamics is primarily focused in North America and is expected to benefit from a wider distribution footprint that Oil States offers, enhancing the growth potential of the combined business. The opportunity to leverage the technology through a wider distribution network provides a significant growth opportunity.
Oil States — which counts Matrix Service Company (MTRX - Free Report) and McDermott International, Inc. as its peers among others — is organized in three business segments Offshore Products, Tubular Services and Well Site Services.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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