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C&J Energy has $1.3 billion of funding in place to purchase Nabors Industries’ business units
By Lisa Kerner
Charlotte, N.C., June 26 – C&J Energy Services, Inc. has “commitments in place for all the financing” for its $2.86 billion deal to acquire Nabors Industries Ltd.’s’ U.S. and Canadian completion and production businesses, said C&J chief financial officer Randy McMullen during a conference call late Wednesday.
Specifically, C&J has secured a $1.3 billion fully underwritten financing commitment from Citi to finance the cash portion of the transaction and refinance existing debt.
In addition, the company has secured a $600 million commitment on a new credit facility that is expected to be undrawn following the closing of the transaction, according to a company news release.
Nabors will receive total consideration of $2.86 billion in the one-for-one stock transaction, comprised of about 62.5 million New C&J common shares and about $940 million in cash, payable at closing.
According to Nabors, the cash will be paid from proceeds of a public debt placement by the combined company.
“Cash consideration, in the form of an intercompany note between NCPS and Newco, will make up the difference between the $2.86 billion purchase price and the value of the Newco common shares,” said McMullen.
The completion and production businesses will be conveyed to an existing Bermuda subsidiary (New C&J). A Delaware subsidiary of New C&J will merge with and into C&J, with C&J surviving the merger as a subsidiary of New C&J.
Common shares of C&J will be converted into common shares of New C&J.
New C&J will change its name to C&J Energy Services, Ltd. once the merger is completed.
The combined company is expected to have “significant liquidity,” including $600 million of revolver availability.
Nabors Industries is an oil, natural gas and geothermal drilling contractor based in Hamilton, Bermuda.
C&J is a Houston-based provider of hydraulic fracturing, coiled tubing and pressure pumping services.
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