Ensco and Rowan Companies have completed a previously announced merger, creating the new combined offshore drilling company Ensco Rowan, the world's largest by fleet size.
The merger completion follows the satisfaction of the transaction’s closing conditions including shareholder approval and sanction by the UK Court. Ensco Rowan will be headquartered in London, with a significant presence in Houston. It will trade on the New York Stock Exchange under the ticker symbol ESV.
Under the deal, Ensco purchased Rowan for $2.38 billion.
Rowan shareholders received 2.750 Ensco shares for each Rowan share they owned immediately prior to closing. Legacy Ensco and Rowan shareholders own approximately 55% and 45%, respectively, of the outstanding shares of Ensco Rowan. Following the closing of the transaction, ordinary shares of the combined company have been consolidated through a 4:1 reverse stock split, resulting in approximately 197 million ordinary shares outstanding.
Ensco Rowan, now the world's largest offshore driller in terms of fleet size, operates 16 drillships, 12 semisubmersibles, 54 jackups and two deepwater managed units, according to its website.
Tom Burke, EnscoRowan’s President and Chief Executive Officer, said, “The successful completion of our merger further enhances our market leadership with a fleet of high-specification floaters and jackups and diverse customer base. Our growing geographic presence, technologically-advanced drilling rigs and talented employees position us exceptionally well to meet increasing and evolving customer demand. I look forward to executing on the significant long-term growth opportunities we believe we can capture from our combined strengths as the offshore sector recovers.”
Carl Trowell, EnscoRowan’s Executive Chairman, said, “The combination of Ensco and Rowan creates an industry-leading offshore driller across all water depths, establishing a stronger company capable of thriving throughout the market cycles. Our increased scale, diversification and financial strength will provide significant advantages to better serve our customers and unlock long-term value for our shareholders.”
In conjunction with the closing of the transaction and the termination of the Rowan revolving credit facilities, the company has executed an agreement with its banking group to increase the capacity under its revolving credit facility. As a result, Ensco Rowan will have borrowing capacity under its unsecured revolving credit facility of approximately $2.3 billion through September 2019, and approximately $1.7 billion from October 2019 through September 2022.
Jon Baksht, EnscoRowan’s Senior Vice President and Chief Financial Officer, said, “We are pleased with the support of our banking group and their recognition of the strengthened position of the company following the closing of the merger. We will have one of the strongest liquidity positions in the offshore drilling sector, giving us a competitive advantage as we move forward as a combined company.”