Patterson-UTI Energy Inc. (NASDAQ: PTEN) has entered into an agreement to acquire Multi-Shot LLC d/b/a MS Energy Services and appointed a new CFO.
The oilfield services company will acquire Multi-Shot LLC, a directional drilling services company, on a debt-free basis for total consideration of approximately 8.8 million shares of Patterson-UTI common stock and $75 million of cash.
Upon deal completion, Allen R. Neel, chairman and CEO of MS Energy, will join Patterson-UTI as president of MS Energy. Neel has served as the CEO of MS Energy since 2004 when he co-founded the company that purchased MS Energy from previous owners. Neel has more than 37 years of experience in oilfield services having worked in the industry since receiving a bachelor’s degree from the University of Alabama. Also joining Patterson-UTI will be Paul Culbreth. Culbreth has served as the COO of MS Energy since he co-founded the company that purchased MS Energy from previous owners in 2004. Culbreth has held various technical and leadership positions within the oilfield services industry since 1977.
In connection with this transaction, Patterson-UTI expects to acquire approximately $30 million of non-cash working capital. The transaction values MS Energy at approximately $215 million, based on the most recent closing price of Patterson-UTI common stock of $15.94. Patterson-UTI will fund the $75 million cash consideration using cash on hand and the company's revolving line of credit. The cash consideration paid to the sellers will be used to cover transaction expenses and repay the outstanding debt at MS Energy, and as such, Patterson-UTI will not assume any debt of MS Energy.