Precision Drilling to acquire CWC Energy Services for $141M

Precision Drilling Corporation has entered into an agreement to acquire all of the issued and outstanding common shares of CWC Energy Services for total consideration of approximately $141M, comprised of 947,909 Precision shares, valued at approximately $88M as of September 1, 2023 market close, $14M in cash, plus the assumption of CWC’s outstanding debt. With this transaction, Precision adds to its fleet: 62 marketed service rigs in Canada, seven marketed drilling rigs in Canada, and 11 marketed drilling rigs in the U.S., including seven AC triple rigs. Currently, three of the Canadian drilling rigs and seven of the U.S. drilling rigs are actively working for customers. Additional transaction highlights include: Well Positioned, High-Quality Assets: Well-maintained assets across Canada and the U.S. in complementary geographic regions supported by skilled and experienced personnel and strong customer relationships; Material Synergies: Precision expects to realize annual operating synergies of approximately $20M once CWC is fully integrated, and Precision has identified approximately $20M of excess CWC real estate that it expects to monetize post-transaction closing; and Financially Beneficial: Precision expects the transaction to be accretive on a 2024 cash flow per share basis and to support its ongoing deleveraging plan. Precision remains committed to reducing its debt levels by $500M between 2022 and 2025 and achieving a sustained Net Debt-to-Adjusted EBITDA ratio of less than 1.0 times by the end of 2025. For 2023, Precision remains on track to reduce its debt by $150M. The transaction is expected to be completed in the fourth quarter of 2023 subject to CWC shareholder approval, Toronto Stock Exchange, court and regulatory approvals, Competition Bureau approval, and the satisfaction of other customary closing conditions.