ADES finalises acquisition of Shelf Drilling

2382.SR +3.03% SHLLF 0.00%

Oil and gas drilling services provider ADES Holding Company has finalised its acquisition of Shelf Drilling via a cash merger.

The merger brings together a combined fleet of 83 offshore units, including 46 premium units, and 40 onshore rigs, currently operating across 19 nations, an increase from the previous 13.

This transaction strengthens ADES’ market presence in its regions of operation.

The enlarged group is said to be backed by a combined backlog exceeding SR34bn ($9.07bn), offering multi-year revenue visibility and significant capacity to pursue premium opportunities at scale.

Shelf Drilling’s shareholders approved the cash merger with ADES at an extraordinary general meeting in October, with 99.6% of votes cast in favour.

In August, ADES International Holding, a unit of drilling services company ADES, agreed to acquire all issued and outstanding shares of Shelf Drilling through a cash merger.

The Nkr14 ($1.40) price for each Shelf Drilling share as per the August agreement implied a total company equity valuation of around $380m.

However, in September, ADES announced the revised terms for its proposed merger with Shelf Drilling, increasing the cash consideration by 28% to Nkr18.50 per share.

In a recent statement to Saudi stock exchange Tadawul, ADES said that there is “no change to the cost associated for the cash consideration of Nkr18.5 per share”.

ADES said in a press release that global marketed jack-up utilisation is currently above 90% before the redeployment of various suspended rigs from Saudi Arabia, including resumption notices obtained for its ADM 510 unit and the Harvey H. Ward unit from Shelf.

ADES plans to enhance the capital structure of the combined group, utilising its “enlarged balance sheet” and strong cash-flow generation.

The company intends to refinance and settle Shelf’s outstanding US dollar notes (2029) and Nordic bonds (2028) prior to the end of this year, aiming for an efficient capital structure and long-term financing benefits.

Integration efforts have begun using ADES’ acquisition approach of decreasing execution risk and maximising value creation.

ADES expects to realise $50–60m in annual operational cost synergies over the medium term, in addition to day-one interest savings of more than $30m per year.

The expanded group is looking forward to improved commercial reach, fleet allocation flexibility and consolidation of shared functions across important markets.

Commenting on the closing of the transaction, ADES CEO Mohamed Farouk said: “By completing this landmark transaction, we have cemented our position as the world’s leading offshore drilling company, with the scale, fleet quality and geographic reach to serve clients across the world’s most attractive basins.”

"ADES finalises acquisition of Shelf Drilling" was originally created and published by Offshore Technology, a GlobalData owned brand.

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