Ensco plc to
Acquire Atwood Oceanics, Inc.
Strengthens Position as Leading
Offshore Driller
Adds High-Quality Portfolio of Floater and Jackup Assets
$65 Million of Annual Expense Synergies Anticipated from
Transaction
Complementary Fleet Composition and Geographic Presence
Largest Customer Base of Any Offshore Driller
Well Capitalized with Adjusted Combined Liquidity of $3.9
Billion
London & Houston - 30 May 2017 - 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.
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 on a discounted cash flow basis.
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 http://www.enscoplc.com/ and
http://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
http://www.enscoplc.com and http://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.
Investor and Media Contact(s):
Ensco
plc
Nick Georgas
Director - Investor Relations and Communications
713-430-4607
Ensco plc
Tim Richardson
Manager - Investor Relations
713-430-4490
Atwood Oceanics, Inc.
Mark W. Smith
Senior Vice President and Chief Financial Officer
281-749-7840
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Atwood Oceanics, Inc. via Globenewswire
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