Independence Contract Drilling and Sidewinder Drilling collectively introduced their entry right into a definitive merger settlement pursuant to which ICD will purchase all the excellent fairness pursuits in Sidewinder.
The merger will mix two extremely complementary pad-optimal drilling fleets and operations centered within the Permian Basin, Haynesville area and different basins in Texas and its contiguous states.
Upon closing of the transaction, ICD will greater than double the scale of its pad-optimal rig fleet to 34 rigs following modest upgrades to 5 Sidewinder rigs. ICD expects to attain synergies in extra of $eight million and believes the acquisition can be accretive to earnings per share, EBITDA per share and money circulation per share. The transaction is topic to customary regulatory approvals, approval by ICD’s stockholders of the issuance of the ICD widespread inventory within the merger transaction and different customary closing circumstances. The transaction is predicted to shut early within the fourth quarter of 2018.
Under the phrases of the transaction, the Sidewinder unitholders will obtain an combination of 36,752,657 shares of ICD widespread inventory, representing roughly 49% of the overall excellent shares instantly following the closing of the transaction. ICD additionally will assume an estimated $50 million of Sidewinder internet debt at closing.
Contemporaneously with the signing of the merger settlement, ICD has obtained binding commitments for a $130 million, secured, 5-year-non-amortizing time period mortgage and a $40 million revolving credit score facility, each to be entered into on the closing of the transaction. Proceeds from the time period mortgage can be used to refinance each ICD’s current debt and the Sidewinder debt assumed within the transaction.
Byron Dunn, President and Chief Executive Officer of ICD commented, “The advantages to ICD of this mixture are vital and the commercial and geographic match is clear. We anticipate to realize vital measurement and scale, develop development alternatives and understand vital synergies. We additionally anticipate to strengthen our money flows and steadiness sheet, add operational experience and capabilities, and create vital alternatives to market extra rigs into our increasing buyer base.” (Source and picture: Independence Contract Drilling)
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