Ensco plc (ESV) closed its acquisition of Pride International Inc. becoming the world's second-largest offshore oil and gas driller behind Transocean Inc. (RIG). The acquisition also widens Ensco’s exposure to the fastest growing markets of the word including Brazil and West Africa.
Under the agreement, Pride stockholders received 0.4778 newly issued Ensco shares plus $15.60 in cash for each share of the Pride common stock. The board of directors of both companies approved the transaction.
Ensco shares will continue to trade as American Depositary Shares on the New York Stock Exchange under the symbol “ESV.” On the other hand, Pride International common stock ceased trading on May 31.
From the acquisition, Ensco has inherited a deepwater fleet with drillship assets as well as gained significant new contracts worldwide. Ensco’s expanded rig fleet comprises of seven ultra-deepwater drillships, 13 dynamically positioned semisubmersibles, seven moored semisubmersibles and 49 premium jackups. The obtained ultra-deepwater fleet is the latest in the industry and the the active premium jackup fleet is the biggest among drillers. Many technically superior drillships, semisubmersibles and ultra-premium harsh environment jackups are under construction, with the intent to high-grade the company’s fleet.
Pride used to be a leading offshore contract driller with operations in many of the active oil and natural gas basins of the world, including South America, the Gulf of Mexico (GoM), West Africa, the Mediterranean Sea, the Middle East, and Asia Pacific. Again, London-based Ensco is the chief supplier of rigs in the North Sea, Southeast Asia, North America and the Middle East. We believe the combined entity will be a significant offshore drilling competitor globally, securing a premium valuation with high-quality assets.
Ensco is renowned for customer satisfaction. With its improved rig fleet, it is expected to further capitalize on growth prospects around the world.
We currently maintain our long-term Neutral recommendation for Ensco shares. The company holds a Zacks #3 Rank, which translates to a short-term Hold rating.
ENSCO PLC (ESV): Free Stock Analysis Report
Be the first to comment