Strengthens Position as Leading Offshore
DrillerAdds High-Quality Portfolio of Floater and Jackup Assets$65
Million of Annual Expense Synergies Anticipated from
TransactionComplementary Fleet Composition and Geographic
PresenceLargest Customer Base of Any Offshore DrillerWell
Capitalized with Adjusted Combined Liquidity of $3.9 Billion
Ensco plc (NYSE: ESV) and Atwood Oceanics, Inc. (NYSE: ATW)
jointly announced today that they have entered into a definitive
merger agreement under which Ensco will acquire Atwood in an
all-stock transaction. The definitive merger agreement was
unanimously approved by each company’s board of directors.
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Under the terms of the merger agreement, Atwood shareholders
will receive 1.60 shares of Ensco for each share of Atwood common
stock for a total value of $10.72 per Atwood share based on Ensco’s
closing share price of $6.70 on 26 May 2017. This represents a
premium of approximately 33% to Atwood’s closing price on the same
date. Upon close of the transaction, Ensco and Atwood shareholders
will own approximately 69% and 31%, respectively, of the
outstanding shares of Ensco plc. There are no financing conditions
for this transaction.
Ensco expects to realize annual pre-tax expense synergies of
approximately $65 million for full year 2019 and beyond. The
combination is expected to be accretive on a discounted cash flow
basis.
Ensco Chief Executive Officer Carl Trowell said, “The
combination of Ensco and Atwood will strengthen our position as the
leader in offshore drilling across a wide range of water depths
around the world – creating a broad platform that we can build upon
in the future. This acquisition significantly enhances our
high-specification floater and jackup fleets, adding
technologically advanced drillships and semisubmersibles, and
refreshing our premium jackup fleet to best position ourselves for
the market recovery. We believe that the purchase price for these
assets represents a compelling value to our shareholders, which is
augmented further by expected synergies from the transaction.”
Mr. Trowell added, “By bringing together our high-specification
rig fleets, technology and innovation, and talented rig crews, we
plan to continue delivering high levels of operational and safety
performance to an even larger group of clients. We will remain one
of our industry’s best capitalized companies. Our combined
financial strength, diverse customer base and larger scale should
lead to greater strategic and competitive advantages as well as
cost efficiencies, allowing for opportunistic investments through
the market cycle.”
Atwood’s Chief Executive Officer Rob Saltiel stated, “The
combination is an ideal strategic fit. Both companies are
passionate about operational excellence, safety and customer
satisfaction with core values and cultures that are perfectly
aligned. We believe the combined company will offer an unmatched
rig fleet and workforce. These attributes, anchored by a strong
balance sheet, should enable the company to thrive as market
conditions improve and allow Atwood shareholders to fully
participate in the market recovery.”
Strategic Fit
The transaction will join two leading offshore drillers –
combining long-established histories of operational, safety and
technical expertise with high-quality assets that cover the world’s
most prolific offshore drilling basins.
The acquisition will strengthen Ensco’s position as the leading
offshore driller with exposure to deep- and shallow-water markets
that span six continents. Upon closing, Ensco will add six
ultra-deepwater floaters, including four of the most capable
drillships in the industry, and five high-specification jackups.
The combined company will have a fleet of 63 rigs, comprised of
ultra-deepwater drillships, versatile deep- and mid-water
semisubmersibles and shallow-water jackups, along with a diverse
customer base of 27 national oil companies, supermajors and
independents.
Combined Company Highlights
The combined company’s fleet will be among the most
technologically advanced in the industry and will meet the deep-
and shallow-water drilling requirements of an expanded base of
clients around the world. Within the fleet of 26 floating rigs
(semisubmersibles and drillships) are 21 ultra-deepwater drilling
rigs, capable of drilling in water depths of 7,500′ or greater,
with an average age of five years – establishing this fleet among
the youngest and most capable in the industry.
The jackup fleet will be the largest in the world, composed of
37 rigs, including 27 premium units. These jackups are all equipped
with many of the advanced features requested by clients for
shallow-water drilling programs, such as increased leg length,
expanded cantilever reach, greater hoisting capacity and offline
handling capabilities.
The combined company will be among the most geographically
diverse drillers with current operations and drilling contracts
spanning six continents in nearly every major deep- and
shallow-water basin around the world. Regions will include major
markets such as the Gulf of Mexico, Brazil, West Africa, Middle
East, North Sea, Mediterranean and Asia Pacific.
Customers will include most of the leading national and
international oil companies, plus many independent operators. In
total, the combined company will benefit from a diversified client
base with the largest number of current customers of any offshore
driller.
Ensco’s executive management will continue with Carl Trowell as
President and Chief Executive Officer, Carey Lowe as Executive Vice
President and Chief Operating Officer, and Jon Baksht as Senior
Vice President and Chief Financial Officer.
Ensco plc’s Chairman will continue to be Paul Rowsey and the
board of directors will include Carl Trowell, plus two members from
Atwood’s current board effective at closing.
Ensco will continue to be domiciled in the UK and senior
executive officers will be located in London and Houston. Ensco plc
shares will continue to trade on the New York Stock Exchange under
the symbol “ESV”.
Financial Highlights
Future revenue growth opportunities are anticipated with an
expanded fleet serving a larger customer base across a wide
geographic footprint. While current market conditions are
challenging, Ensco will be ideally positioned to meet increasing
levels of customer demand as the market recovers.
Annual expense savings of $65 million are estimated to be
realized in full year 2019 and beyond, and 2018 cost synergies are
projected to be more than $45 million. Expense savings are
anticipated from the consolidation of offices that include
corporate staff departments and shore-based operations in
overlapping markets, as well as the standardization of systems,
policies and procedures across the organization.
Based on the anticipated annual savings, the planned combination
is expected to be accretive to projected discounted cash flows.
The balance sheet of the combined company will remain strong.
Adjusted for the expected retirement of Atwood’s outstanding
revolving credit facility with cash and short-term investments on
hand, total available liquidity was $3.9 billion on 31 March 2017
and included $1.6 billion of cash and short-term investments.
The estimated enterprise value of the combined company is $6.9
billion, based on the closing price of each company’s shares on 26
May 2017. The combined company will have approximately $3.7 billion
in revenue backlog.
Conditions and Timing
The transaction is subject to approval by the shareholders of
Ensco and Atwood, as well as other customary closing conditions.
The transaction is not subject to any financing conditions. Ensco
and Atwood intend to file a joint proxy statement/prospectus with
the Securities and Exchange Commission as soon as possible. The
companies anticipate that the transaction could close as soon as
calendar third quarter 2017.
Advisors
Morgan Stanley & Co. LLC is lead financial advisor to Ensco.
DNB Markets, part of DNB Bank ASA and HSBC Securities (USA) Inc.
also provided financial advice to Ensco. Ensco’s legal advisor is
Latham Watkins LLP. The financial advisor for Atwood is Goldman
Sachs & Co. LLC and its legal advisor is Gibson, Dunn &
Crutcher LLP.
Conference Call/Webcast
Ensco and Atwood will conduct a conference call to discuss the
proposed acquisition today at 10:00 a.m. CDT (11:00 a.m. EDT and
4:00 p.m. London time). The call will be webcast live at
www.enscoplc.com and www.atwd.com. Alternatively, callers may dial
1-855-239-3215 within the United States or +1-412-542-4130 from
outside the U.S. Please ask for the Ensco conference call. It is
recommended that participants call 20 minutes ahead of the
scheduled start time. Callers may avoid delays by pre-registering
to receive a dial-in number and PIN at
http://dpregister.com/10108374.
Shortly before the conference call begins, slides will be posted
under the investor relations sections of each company’s website
that will be referred to during the call.
A webcast replay and transcript of the call will be available
within 36 hours at www.enscoplc.com and www.atwd.com. A replay will
also be available by phone for six days after the call by dialling
1-877-344-7529 within the United States or +1-412-317-0088 from
outside the U.S. (conference ID 10108374).
ABOUT ENSCO
Ensco plc (NYSE: ESV) brings energy to the world as a global
provider of offshore drilling services to the petroleum industry.
For more than 29 years, the company has focused on operating safely
and going beyond customer expectations. Ensco is ranked first in
total customer satisfaction in the latest independent survey by
EnergyPoint Research — the seventh consecutive year that Ensco has
earned this distinction. Operating one of the newest
ultra-deepwater rig fleets and a leading premium jackup fleet,
Ensco has a major presence in the most strategic offshore basins
across six continents. Ensco plc is an English limited company
(England No. 7023598) with its corporate headquarters located at 6
Chesterfield Gardens, London W1J 5BQ. To learn more, visit our
website at www.enscoplc.com.
ABOUT ATWOOD
Atwood Oceanics, Inc. (NYSE:ATW) is a leading offshore drilling
company engaged in the drilling and completion of exploration and
development wells for the global oil and gas industry. The Company
currently owns 9 mobile offshore drilling units and is constructing
two ultra-deepwater drillships. The Company was founded in 1968 and
is headquartered in Houston, Texas. For more information about the
Company, please visit www.atwd.com.
Forward-Looking Statements
Statements included in this release regarding the proposed
transaction, benefits, expected synergies and other expense savings
and operational and administrative efficiencies, opportunities,
timing, expense and effects of the transaction, financial
performance, accretion to discounted cash flows, revenue growth,
future dividend levels, credit ratings or other attributes of Ensco
plc (“Ensco”) following the completion of the transaction and other
statements that are not historical facts, are forward-looking
statements (including within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended, and Section 27A of the
Securities Act of 1933, as amended). Forward-looking statements
include words or phrases such as “anticipate,” “believe,”
“contemplate,” “estimate,” “expect,” “intend,” “plan,” “project,”
“could,” “may,” “might,” “should,” “will” and words and phrases of
similar import. These statements involve risks and uncertainties
including, but not limited to, actions by regulatory authorities,
rating agencies or other third parties, actions by the respective
companies’ security holders, costs and difficulties related to
integration of Atwood Oceanics, Inc. (“Atwood”), delays, costs and
difficulties related to the transaction, market conditions, and
Ensco’s financial results and performance following the completion
of the transaction, satisfaction of closing conditions, ability to
repay debt and timing thereof, availability and terms of any
financing and other factors detailed in the risk factors section
and elsewhere in Ensco’s and Atwood’s Annual Report on Form 10-K
for the year ended December 31, 2016 and September 30, 2016,
respectively, and their respective other filings with the
Securities and Exchange Commission (the “SEC”), which are available
on the SEC’s website at www.sec.gov. Should one or more of these
risks or uncertainties materialize (or the other consequences of
such a development worsen), or should underlying assumptions prove
incorrect, actual outcomes may vary materially from those
forecasted or expected. All information in this release is as of
today. Except as required by law, both Ensco and Atwood disclaim
any intention or obligation to update publicly or revise such
statements, whether as a result of new information, future events
or otherwise.
Important Additional Information Regarding the Transaction
Will Be Filed With the SEC
In connection with the proposed transaction, Ensco will file a
registration statement on Form S-4, including a joint proxy
statement/prospectus of Ensco and Atwood, with the SEC. INVESTORS
AND SECURITY HOLDERS OF ENSCO AND ATWOOD ARE ADVISED TO CAREFULLY
READ THE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS
(INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
TRANSACTION, THE PARTIES TO THE TRANSACTION AND THE RISKS
ASSOCIATED WITH THE TRANSACTION. A definitive joint proxy
statement/prospectus will be sent to security holders of Ensco and
Atwood in connection with the Ensco and Atwood shareholder
meetings. Investors and security holders may obtain a free copy of
the joint proxy statement/prospectus (when available) and other
relevant documents filed by Ensco and Atwood with the SEC from the
SEC’s website at www.sec.gov. Security holders and other interested
parties will also be able to obtain, without charge, a copy of the
joint proxy statement/prospectus and other relevant documents (when
available) by directing a request by mail or telephone to either
Investor Relations, Ensco plc, 5847 San Felipe, Suite 3300,
Houston, Texas 77057, telephone 713-430-4607, or Investor
Relations, Atwood Oceanics, Inc., 15011 Katy Freeway, Suite 800,
Houston, Texas 77094, telephone 281-749-7840. Copies of the
documents filed by Ensco with the SEC will be available free of
charge on Ensco’s website at www.enscoplc.com under the tab
“Investors.” Copies of the documents filed by Atwood with the SEC
will be available free of charge on Atwood’s website at
www.atwd.com under the tab “Investor Relations.” Security holders
may also read and copy any reports, statements and other
information filed with the SEC at the SEC public reference room at
100 F Street N.E., Room 1580, Washington D.C. 20549. Please call
the SEC at (800) 732-0330 or visit the SEC’s website for further
information on its public reference room.
Participants in the Solicitation
Ensco and Atwood and their respective directors, executive
officers and certain other members of management may be deemed to
be participants in the solicitation of proxies from their
respective security holders with respect to the transaction.
Information about these persons is set forth in Ensco's proxy
statement relating to its 2017 General Meeting of Shareholders and
Atwood’s proxy statement relating to its 2017 Annual Meeting of
Shareholders, as filed with the SEC on 31 March 2017 and 9 January
2017, respectively, and subsequent statements of changes in
beneficial ownership on file with the SEC. Security holders and
investors may obtain additional information regarding the interests
of such persons, which may be different than those of the
respective companies' security holders generally, by reading the
joint proxy statement/prospectus and other relevant documents
regarding the transaction, which will be filed with the SEC.
No Offer or Solicitation
This release is not intended to and does not constitute an offer
to sell or the solicitation of an offer to subscribe for or buy or
an invitation to purchase or subscribe for any securities or the
solicitation of any vote in any jurisdiction pursuant to the
proposed transaction or otherwise, nor shall there be any sale,
issuance or transfer of securities in any jurisdiction in
contravention of applicable law. Subject to certain exceptions to
be approved by the relevant regulators or certain facts to be
ascertained, the public offer will not be made directly or
indirectly, in or into any jurisdiction where to do so would
constitute a violation of the laws of such jurisdiction, or by use
of the mails or by any means or instrumentality (including without
limitation, facsimile transmission, telephone and the internet) of
interstate or foreign commerce, or any facility of a national
securities exchange, of any such jurisdiction.
Service of Process
Ensco is incorporated under the laws of England and Wales. In
addition, some of its officers and directors reside outside the
United States, and some or all of its assets are or may be located
in jurisdictions outside the United States. Therefore, investors
may have difficulty effecting service of process within the United
States upon those persons or recovering against Ensco or its
officers or directors on judgments of United States courts,
including judgments based upon the civil liability provisions of
the United States federal securities laws. It may not be possible
to sue Ensco or its officers or directors in a non-U.S. court for
violations of the U.S. securities laws.
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version on businesswire.com: http://www.businesswire.com/news/home/20170530005599/en/
Ensco plcNick Georgas, 713-430-4607Director – Investor Relations
and CommunicationsorEnsco plcTim Richardson, 713-430-4490Manager –
Investor RelationsorAtwood Oceanics, Inc.Mark W. Smith,
281-749-7840Senior Vice President and Chief Financial Officer
Atwood Oceanics (NYSE:ATW)
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