Superior Energy Services (NYSE:SPN) has agreed to acquire Complete Production Services (NYSE:CPX) for about $2.7 billion in a cash-and-stock merger that will help expand its presence in the oilfield-services industry.
A New Orleans-based provider of specialized oilfield services and equipment, Superior will pay 0.945 share of its stock and $7 in cash for each share of Complete. That combined value, or $32.90 a share, represents a premium of 61% to Complete’s closing price on Friday.
Upon the deal’s consummation, Superior is expected to own about 52% of the $6 billion merged company, and Complete shareholders will own 48%. The company will be known as Superior and will continue to be led by Superior’s chief executive, David Dunlap.
The combined company will have enhanced positions in large sectors for key products and services, such as hydraulic fracturing and well servicing, that are widely used during drilling, completion and production processes, Dunlap said.
Superior hopes the addition of Complete, which provides specialized completion and production services and products to develop hydrocarbon reserves for oil and gas companies in North America and southeast Asia, will help expedite its global expansion.
The company expects the deal will be accretive to earnings and cash flow in 2012, however, it is only predicting “minimal consolidation cost savings.”
Both companies confirmed their prior guidance for 2011, but Complete said third-quarter results will be below its initially forecast, with EBITDA between $155 million and $160 million due to delayed deliveries, defective components and flooding in Pennsylvania and Mexico.
The merger is subject to approval of both company’s shareholders and other customary approvals. The companies predict the transaction will close by the end of the year.