Ensco: Acquisition Is in Best Interest of the Company and Shareholders
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Wide fleet capabilities, diverse client base, and global footprint
The proposed acquisition enhances the drilling capabilities across the fleet from ultra-deepwater drillships to versatile semisubmersibles and shallow-water jack-ups. Ensco’s acquisition of ATW would add four technologically advanced drillships and two ultra-deepwater submersibles to Ensco’s current floater fleet.
The company would have the largest fleet of premium jack-ups. The combined company would reach six continents. Ensco currently has a presence in the US Gulf of Mexico, Brazil, and the Middle East. In these regions, ATW has little or no presence. Atwood Oceanics has its presence in Asia-Pacific Market.
Also, Ensco could strengthen its position in the growing Australian market. The companies also complement each other in customer mix, as they have a minimum overlap of customers. The combined company would have a customer base of 27 national oil companies, supermajors, and independents.
Addition of fleet at a compelling purchase price
Ensco would acquire Atwood Oceanics’ rigs at ~$222 million per floater, which Ensco believes is a compelling price. This price compares to $650 million to build a fully operational equivalent asset, ~$400 million to acquire a distressed asset, and ~$150 million for a complete package of subsea equipment.
Other comparable asset opportunities available in the market were above the values offered by Ensco at the time of the transaction, including assets of distressed companies. Assets of distressed companies have greater operational risks and higher reactivation costs.
The combined company would have 26 floaters and 37 jack-ups. Below are the floater fleet figures for Ensco’s peers: