Superior Energy to Buy Complete Production for $2.6 Billion
Superior Energy Services Inc. (SPN), a U.S. oilfield-services provider, will buy Complete Production Services Inc. (CPX) for about $2.6 billion in a cash and stock deal as declining crude prices drive down the price of assets.
Investors in Complete, a Houston-based competitor, will get 0.945 common share of Superior for every share held and $7 for each share of Complete, the companies said today in a statement. New Orleans-based Superior will pay a 29 percent premium over Complete’s two-month average stock price, they said.
Oil futures have fallen 8 percent this year in New York trading as global economic growth slows, stoking concern that demand for crude and fuels will drop. The decline in prices has eroded the valuations of some energy companies, making them attractive acquisition targets. Complete has tumbled 41 percent in the past three months in New York.
Goldman Sachs Group Inc. and Sanford C. Bernstein Co. have predicted a surge of oil and gas takeovers after the industry’s worst slump in three years. China Petrochemical Corp. today agreed to buy Calgary-based Daylight Energy Ltd. for C$2.2 billion ($2.1 billion) in its largest acquisition this year. Korea National Oil Corp. said last week it plans to resume acquisitions of overseas assets after a six-month hiatus.
Superior shares declined 3.1 percent to $27.41 on Oct. 7, while Complete fell 0.7 percent to $20.38.
Acquirers of oil-services companies have paid an average premium of 28 percent in deals announced in the past 12 months, according to global data compiled by Bloomberg. The Superior Energy transaction is likely to be completed by the end of 2011, with its shareholders owning about 52 percent of Complete and Complete stockholders the rest, the statement shows.
Superior’s Chief Executive Officer David Dunlap will head the combined company, which will have two independent directors from Complete. Superior was advised by Greenhill & Co. and JPMorgan Chase & Co. (JPM), which also provided bridge financing for the cash portion of the deal, according to the statement. Complete was advised by Credit Suisse Securities (USA) LLC.
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