(Canadian dollars except as indicated)
This news release contains "forward-looking
information and statements" within the meaning of applicable
securities laws. For a full disclosure of the forward-looking
information and statements and the risks to which they are subject,
see the "Cautionary Statement Regarding Forward-Looking Information
and Statements" later in this news release.
Precision Drilling Corporation ("Precision")
(TSX:PD; NYSE:PDS) is pleased to announce that it has entered into
an arrangement agreement (the "Arrangement Agreement") with
Trinidad Drilling Limited ("Trinidad") (TSX:TDG) pursuant to which
Precision has agreed to acquire all of the issued and outstanding
common shares of Trinidad (the "Trinidad Shares") on the basis of
0.445 common shares of Precision (the "Precision Shares") for each
outstanding Trinidad Share pursuant to a plan of arrangement (the
"Transaction").
The aggregate Transaction value is approximately
$1,028 million, including the assumption of approximately $477
million in Trinidad net debt. Upon completion of the Transaction,
existing holders of Trinidad Shares will collectively own
approximately 29% of Precision.
Kevin Neveu, President and Chief Executive
Officer of Precision remarked, "This transaction creates
exceptional value for both Trinidad and Precision shareholders. The
combination provides a truly unique opportunity to combine two
highly-focused drilling contractors that are pursuing similar
growth initiatives and competitive strategies and importantly,
operating similar Tier 1 assets."
"From a strategic perspective, Trinidad is a
perfect fit with Precision. We can realize immediate synergies,
estimated to be over $30 million, through fixed cost reductions,
operational efficiencies and reduced public company costs. Over the
long-term, the additional scale will further strengthen Precision’s
operating leverage and positions the company to service our
customers’ continued transition to High Performance drilling
services with high spec AC rigs. Additionally, this combination
allows us to better differentiate our service offering through our
combined industry leading drilling technology initiatives and a
larger operating platform."
"The incremental free cash flow generated
through this combination will ensure Precision meets or exceeds our
long-term debt reduction targets and improves our financial
flexibility to pursue growth opportunities in the United States and
in international markets."
Transaction Rationale
- Unique combination of two highly focused drilling
contractors pursuing similar strategies with complementary Tier 1
assets
- Trinidad’s fleet of 141 drilling rigs includes 61 high spec AC
rigs that fit 90% within Precision’s standardization protocols and
are equipped with major components that are well aligned for fleet
integration.
- Precision will have a North American fleet that includes over
200 active rigs and 322 total rigs. As the third largest driller in
the U.S., Precision will have strong positions in all key shale
plays and will be positioned for improving industry activity. The
company will have an expanded platform for technology deployment
and an increased inventory of economically upgradeable
rigs.
- The company will have improved cash flow generation
capabilities in Canada given excellent fixed cost leverage and
operating synergies. Trinidad’s customer mix and rig fleet is
complementary and the company is well positioned for LNG and Deep
Basin development. Precision has identified 50 rigs from the
combined fleet that it intends to hold as assets for sale.
- Immediate cost synergies enhanced by long-term
operating efficiencies from increased scale
- In 2019, Precision expects to realize more than $30 million in
annual synergies through corporate efficiencies and facility
consolidations. Precision will leverage its increased scale and
realize long term incremental operating efficiencies through its
recently upgraded IT infrastructure, technical support centers in
Nisku and Houston and its supply chain management and manufacturing
capabilities.
- Strong balance sheet and cash flow profile supports
Precision’s deleveraging plan and improves financial flexibility to
pursue attractive growth opportunities
- Precision will have a strong balance sheet and significant cash
flow to fund growth and manage debt maturities. Further, at
closing, through an RBC Capital Markets underwritten US$100 million
capacity expansion, Precision will increase the size of its
revolving credit facility to US$600 million.
- Expanded platform for U.S. and international growth and
technology deployment
- Precision will benefit from the deployment of international
rigs into long-term contracts and Precision’s operating experience,
infrastructure and scale in Saudi Arabia and Kuwait will support
successful project execution. With an expanded international
platform, Precision is well positioned to win future tenders and to
leverage the combined company’s fleet of 26 international
rigs.
- Leveraging the technology capabilities of both companies will
be a priority and Precision’s Process Automation Control (PAC)
platform was designed to incorporate third party technologies such
as those in the Trinidad technology portfolio. Precision is an
industry leader in technology and through the combination Precision
will have a total of 167 AC rigs capable of running automation
technologies.
- Complementary cultures with commitment to people,
safety, technology and customers
- Trinidad and Precision have a shared commitment to customer
service, best in class assets, strong and effective safety culture,
well trained, professional crews and technology leadership. The
well-trained and highly-skilled employees at both companies are
core to the businesses’ success and Precision remains committed to
providing exceptional opportunities for the employees of both
organizations.
The Precision Board has unanimously approved the
Transaction and determined that the Transaction and the entry into
of the Arrangement Agreement are in the best interests of
Precision. The Precision Board has voted to recommend that holders
of Precision Shares vote in favour of the ordinary resolution
approving issuance of Precision Shares pursuant to the Transaction.
RBC Capital Markets, financial advisor to Precision, delivered a
fairness opinion to the Precision Board to the effect that, the
consideration to be paid under the Transaction is fair, from a
financial point of view, to Precision.
Similarly, the Trinidad Board has unanimously
approved the Transaction and determined that the Transaction and
the entry into of the Arrangement Agreement are in the best
interests of Trinidad and its shareholders. The Trinidad Board has
resolved to recommend that holders of Trinidad securities vote in
favour of the special resolution approving the Transaction. TD
Securities Inc., financial advisor to Trinidad, delivered a verbal
fairness opinion to the Trinidad Board to the effect that, the
consideration to be paid under the Transaction is fair, from a
financial point of view, to holders of Trinidad Shares.
Key Transaction Provisions
The Transaction is expected to be completed in
late 2018 and is subject to TSX, court and regulatory approvals and
the satisfaction of other customary closing conditions.
The Transaction will require approval by at
least 66 2/3% of the Trinidad securities represented in person or
by proxy at a special meeting of Trinidad security holders. The
issuance of the Precision Shares pursuant to the Transaction will
require approval by a simple majority of the Precision Shares
represented in person or by proxy at a special meeting of Precision
shareholders pursuant to the requirements of the TSX.
Precision and Trinidad expect to mail a joint
management information circular with respect to their respective
shareholder meetings in November 2018. A copy of the joint
information circular will be filed and available for viewing on
SEDAR under each of Precision's profile and Trinidad's profile when
it is mailed.
Pursuant to the terms of the Arrangement
Agreement, Trinidad has agreed that it will not solicit or initiate
discussions regarding any other business combination or sale of
material assets. Precision has the right to match any superior
proposals within a five day period. The Transaction provides for a
non-completion fee of $20 million payable by Trinidad in certain
circumstances if the Transaction is not completed.
One of Trinidad's current directors will be
appointed to the Precision Board, and one of Trinidad's current
directors will be nominated for election to the Precision Board at
the Precision shareholder meeting, with such appointment and
election to be effective upon closing of the Transaction and,
thereafter, subject at all times to the fiduciary duties of the
Precision Board and the requirements of applicable laws, agreements
will be in place with Precision to nominate and recommend such
directors for reelection through and including Precision's 2019
annual meeting.
Details of the terms of the Transaction are set
out in the Arrangement Agreement, which will be filed and available
for viewing on SEDAR under each of Precision’s and Trinidad's
profiles at www.sedar.com.
Advisors
RBC Capital Markets is acting as financial
advisor to Precision. Torys LLP is acting as Precision's legal
advisor.
TD Securities Inc. is acting as financial
advisor to Trinidad. Blake, Cassels & Graydon LLP is acting as
Trinidad's legal advisor.
Conference Call and Webcast Details
Precision Drilling Corporation has scheduled a
conference call and webcast to begin promptly at 6:30 a.m. MT (8:30
a.m. ET) on Friday, October 5, 2018.
The conference call dial in numbers are
1-844-515-9176 or 1-614-999-9312.
A live webcast of the conference call will be
accessible on Precision’s website at www.precisiondrilling.com by
selecting "Investor Relations", then "Webcasts &
Presentations". Shortly after the live webcast, an archived version
will be available for approximately 60 days.
An archived recording of the conference call
will be available approximately one hour after the completion of
the call until October 10, 2018 by dialing 1-855-859-2056 or
404-537-3406, pass code 3485388.
About PrecisionPrecision is a leading provider
of safe and High Performance, High Value services to the oil and
gas industry. Precision provides customers with access to an
extensive fleet of contract drilling rigs, directional drilling
services, well service and snubbing rigs, camps, rental equipment,
and wastewater treatment units backed by a comprehensive mix of
technical support services and skilled, experienced personnel.
About TrinidadTrinidad is an industry-leading
contract driller, providing safe, reliable, expertly-designed
equipment operated by well-trained and experienced personnel.
Trinidad's drilling fleet is one of the most adaptable,
technologically advanced and competitive in the industry. Trinidad
provides contract drilling and related services in the US, Canada,
the Middle East and Mexico.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION AND STATEMENTS
Certain statements contained in this news
release, including statements that contain words such as "could",
"should", "can", "anticipate", "estimate", "intend", "plan",
"expect", "believe", "will", "may", "continue", "project",
"potential" and similar expressions and statements relating to
matters that are not historical facts constitute "forward-looking
information" within the meaning of applicable Canadian securities
legislation and "forward-looking statements" within the meaning of
the "safe harbor" provisions of the United States Private
Securities Litigation Reform Act of 1995 (collectively,
"forward-looking information and statements").
In particular, forward-looking information and
statements include, but are not limited to, the following:
- the anticipated closing of the Transaction and the timing
thereof;
- the post-Transaction ownership percentage in Precision of
Trinidad’s existing shareholders;
- the amount of Trinidad debt to be assumed by Precision;
- Precision’s business strategy and the anticipated impacts of
the Transaction thereon;
- the anticipated operational and strategic benefits of the
Transaction listed under the heading "Transaction Rationale";
- the contemplated activities post Transaction; and
- the anticipated mailing of the joint management information
circular and the timing thereof.
These forward-looking information and statements
are based on certain assumptions and analysis made by Precision in
light of its experience and its perception of historical trends,
current conditions, expected future developments and other factors
we believe are appropriate under the circumstances. These include,
among other things:
- that the Transaction will be completed in the timelines and on
the terms currently anticipated;
- that all necessary TSX, Court and regulatory approvals will be
obtained on the timelines and in the manner currently
anticipated;
- that all necessary Precision shareholder and Trinidad security
holder approvals will be obtained; and
- general assumptions respecting the business and operations of
both Precision and Trinidad, including that each business will
continue to operate in a manner consistent with past practice and
pursuant to certain industry and market conditions.
Undue reliance should not be placed on
forward-looking information and statements. Whether actual results,
performance or achievements will conform to our expectations and
predictions is subject to a number of known and unknown risks and
uncertainties which could cause actual results to differ materially
from our expectations. Such risks and uncertainties include, but
are not limited to:
- TSX, Court and regulatory approvals may not be obtained in the
timelines or on the terms currently anticipated or at all;
- Precision shareholder and/or Trinidad security holder approval
may not be obtained;
- the Transaction is subject to a number of closing conditions
and no assurance can be given that all such conditions will be met
or will be met in the timelines required by the Arrangements
Agreement; and
- the business, operational and/or financial performance or
achievements of Precision or Trinidad may be materially different
from that currently anticipated. In particular, the synergies and
benefits anticipated in respect of the Transaction are based on the
current business, operational and financial position of each of
Precision and Trinidad, which are subject to a number of risks and
uncertainties.
Readers are cautioned that the forgoing list of
risk factors is not exhaustive. Additional information on these and
other factors that could affect our business, operations or
financial results are included in reports on file with applicable
securities regulatory authorities, including but not limited to
Precision’s Annual Information Form for the year ended December 31,
2017, which may be accessed on Precision’s SEDAR profile at
www.sedar.com or under Precision’s EDGAR profile at www.sec.gov.
The forward-looking information and statements contained in this
news release are made as of the date hereof and Precision
undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of
new information, future events or otherwise, except as required by
law.
For further information, please contact:
Carey Ford, CFASenior Vice President and Chief
Financial Officer713.435.6111
Ashley Connolly, CFAManager, Investor
Relations403.716.4725
Precision Drilling Corporation800, 525 - 8th
Avenue S.W.Calgary, Alberta, Canada T2P 1G1Website:
www.precisiondrilling.com
None of the securities anticipated to be issued
pursuant to the Arrangement have been or will be registered under
the United States Securities Act of 1933, as amended (the "U.S.
Securities Act"), or any state securities laws, and any securities
issued in the Arrangement are anticipated to be issued in reliance
upon available exemptions from registration requirements pursuant
to Section 3(a) (10) of the U.S. Securities Act and applicable
exemptions under state securities laws. This news release does not
constitute an offer to sell or the solicitation of an offer to buy
any securities.
Grafico Azioni Precision Drilling (NYSE:PDS)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Precision Drilling (NYSE:PDS)
Storico
Da Lug 2023 a Lug 2024