Oilfield services firm Noble Corp (NYSE: NE) entered into a definitive merger agreement of cash and stock deal on June 10, 2024 to acquire Diamond Offshore Drilling, Inc. (NYSE: DO) in a transaction valued at approximately $2.15 billion.
The acquisition, which includes a combination of cash and stock, is set to create one of the largest offshore drilling contractors in the world, enhancing operational capabilities and expanding the company’s presence in key offshore markets.
Deal Structure:
As per the terms of the agreement, Diamond Offshore shareholders will receive 0.2316 shares of Noble, plus a cash consideration of $5.65 per share for each share of Diamond Offshore stock, representing a premium of 11.41% from the stock’s last close. The transaction has been unanimously approved by the Boards of Directors of both companies and is expected to close in the fourth quarter of 2024, subject to customary closing conditions, including regulatory approvals and the approval of Diamond Offshore shareholders.
Company Profile:
Diamond Offshore is a global contract drilling service provider with a fleet of 13 offshore drilling rigs, which include drillships and semisubmersible rigs.
Noble Corp is an offshore drilling contractor for the oil and gas industry. The company has a fleet of 32 drilling rigs and provides contract drilling services worldwide. Noble focuses on high-specification floating and jack-up rigs, prioritizing safe operations, environmental stewardship, and superior performance.
Oil & Gas Sector’s M&A Trend:
There’s been a recent trend in the oil and gas industry where major oil producers are acquiring fracking companies to increase their reserves like ExxonMobil’s (XOM) acquisition of Pioneer Natural Resources (PXD), Diamondback’s (FANG) deal to buy privately-held Endeavor. and Chevron’s (CVX) deal for Hess (HES).
Even in the oilfields sector, oilfield services firm Schlumberger Limited (SLB) acquired ChampionX (CHX) earlier this year to add new technology offerings for $8.22 billion.
Deal Details and Timeline:
Noble expects this deal to benefit its shareholders. Noble’s Chief Executive Officer Robert Eifler said, “Supported by Diamond Offshore’s $2.1 billion of backlog and $100 million of anticipated cost synergies, we expect the transaction to be immediately accretive to our free cash flow per share and contribute to accelerated growth in our return of capital to shareholders.”
Diamond Offshore’s current EV/EBITDA (TTM) ratio is 10.2, above the sector median of 6.28.
Noble intends to fund the cash portion of the transaction through new debt financing, which Noble has secured through a $600 million committed bridge financing facility. The transaction is expected to close by the first quarter of 2025.
Deal Metrics:
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A spread history chart of the merger from announcement through eventual completion or failure.
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Unlock premium insights on the NE-DO deal now @ https://www.insidearbitrage.com/deal-metrics/DO/2990/diamond-offshore-drilling-inc-to-be-acquired-by-noble-corporation-plc/
Disclaimer: This press release includes forward-looking statements within the meaning of applicable securities laws. Forward-looking statements can generally be identified by the use of words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will,” or similar expressions. These statements are based on the current expectations and beliefs of Noble Corp and Diamond Offshore management and are subject to a number of risks, uncertainties, and assumptions that could cause actual results to differ materially from those described in the forward-looking statements. Factors that could cause actual results to differ include, but are not limited to, the following:
Changes in global economic conditions and demand for offshore drilling services.
Fluctuations in oil and natural gas prices and the impact on drilling activity.
The ability to integrate Diamond Offshore’s operations and achieve anticipated synergies.
The outcome of any legal proceedings that may be instituted against Noble Corp, Diamond Offshore, or others related to the acquisition.
Regulatory approvals and satisfaction of other conditions to the closing of the acquisition.
The impact of changes in regulations and laws affecting the offshore drilling industry.
Please conduct thorough personal research before trading any securities mentioned herein. We do not guarantee the comprehensive accuracy of the content or data provided in this news.
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