HOUSTON (AP) - Oilfield services provider Smith International said Tuesday
it will buy W-H Energy Services in a deal valued at roughly $3.2 billion, a
combination that will broaden Smith's offerings in key drilling services
markets.
Smith International Inc. will pay $56.10 cash and 0.48 Smith shares for each
W-H Energy Inc. share outstanding, the Houston-based companies said. Based on
Smith's closing price Monday, the deal values W-H at about $93.55 per share, a
9.4 percent premium to its close.
W-H Energy shares shot up more than 9 percent, or $7.86, to $93.40 in
trading Tuesday, well above their 52-week high. Smith shares rose 78 cents, or
about 1 percent, to $78.80.
The coupling gives Smith an important entry into the directional drilling
market, a growing arena as oil and gas companies find themselves extracting
fossil fuels in increasingly complex fields.
"The combined companies should be significantly strengthened in both
drilling and completion product and service offerings," said Smith chief
executive Doug Rock.
Oil companies hire service providers for a variety of well-site jobs that
can include seismic tests, directional drilling and reservoir management. Two of
the biggest players are Schlumberger Ltd. and Halliburton Co.
Companies in the sector have benefited in recent quarters from frenetic
oilfield activity spurred by record crude and high natural-gas prices.
Smith has about 200.9 million shares outstanding and plans to issue 15.5
million new shares to W-H Energy holders.
The combination, which requires regulatory approval, is expected to be
completed in the third quarter. At that time, Smith's current stockholders are
expected to own 93 percent of the company.
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