HOUSTON — Oil-field equipment provider Nabors will merge part of its business with C&J Energy Services Inc. in a deal that will give it 53 percent ownership of a new company and $937 million cash.
The deal, announced Wednesday evening, involves Nabors’ completion and production business, the smaller of two divisions within the company.
That segment reported operating revenue of $2.1 billion last year, according to the company’s annual report, compared to $4.3 billion attributed to Nabors’ drilling and rig services business.
“I view the creation of this new company as a formidable player, which will meaningfully enhance shareholder value for each company,” Nabors chairman and CEO Anthony Petrello said in a statement.
In a presentation to investors, officials at Houston-based C&J said the merger would result in the fifth largest completion and production business and create a company with more than 10,000 employees.
C&J was founded in 1997 and completed an initial public offering in 2011. It reported net income last year of $66.4 million.
Nabors touted the move as one that would allow it to focus more closely on the drilling part of its business. “Both the combined company and Nabors can now concentrate their resources within their respective segments,” Petrello said in a statement.
Under the terms of the deal, C&J and the Nabors division will form a new company, the so-called “new C&J.” Existing C&J stockholders will receive one share of common stock in the new company for each share of common stock they had in the old C&J.
Nabors will own 53 percent of the new C&J, and C&J’s existing stockholders will own 47 percent of the company.
Nabors will also gets a cash payment of $937 million, part of $1.3 billion debt the new company will take on as part of the transaction.
The new company — which will be called C&J Energy Services Ltd. — will be led by C&J Energy executives, including CEO Josh Comstock. It will be incorporated in Bermuda, like Nabors, with corporate offices in Houston.