Energy services company Weatherford has entered into a definitive agreement to acquire NCS Multistage Holdings in a transaction aimed at expanding its well completions portfolio and increasing exposure to unconventional resource markets.
Under the agreement, NCS Multistage shareholders will be able to elect to receive either Weatherford common stock or a combination of Weatherford stock and cash. On a blended basis, the consideration is expected to be equivalent to 0.463 Weatherford shares for each NCS Multistage share, with up to 19.99% payable in cash.
Weatherford said the acquisition is expected to generate at least $15 million in annual cost synergies within 18 months of closing and to be immediately accretive to adjusted free cash flow per share.
The company said NCS Multistage brings technologies focused on optimizing oil and gas well completions and field development strategies, complementing Weatherford’s existing well construction and completions portfolio.
According to Weatherford, the transaction will expand its offerings in the well completions segment, strengthen its position in unconventional resource development, and provide opportunities to deploy NCS Multistage technologies across its international customer base.
“The acquisition of NCS Multistage is a natural complement to our completions strategy and enhances the application fit of our well construction products portfolio. NCS Multistage's technology is expected to enhance our ability to serve customers across the completion lifecycle, from well design through production optimization and late-life interventions, while deepening our exposure to the growing unconventional resource market,” said Girish Saligram, Weatherford’s President and Chief Executive Officer.