Sidewinder Drilling to buy Union Drilling for $139 million
(Reuters) - Sidewinder Drilling Inc, controlled by private equity firm Avista Capital Partners, plans to buy Union Drilling Inc UDRL.O for $139 million to tap into rising exploration and production activity in North American shale fields.
Sidewinder's $6.50-per-share offer represents a premium of 6 percent to Union's Monday close of $6.13 on the Nasdaq.
Union Drilling shares were trading above the offer price at $7.00 premarket.
The transaction needs at least 67.2 percent of Union Drilling's outstanding stock to be tendered to the offer for the deal to close, the companies said.
Sidewinder has received support from Union Drilling stockholders representing 51 percent of the outstanding shares.
The deal, which the companies said is expected to close in the fourth quarter, values Union Drilling at $242 million.
Oil and gas drillers have ramped up activity using technologies such as hydraulic fracturing and horizontal drilling to unlock vast supplies of oil and gas.
Houston-based Sidewinder, which owns and operates a fleet of land rigs, will fund the deal with debt.
RBC Capital Markets is advising the Fort Worth, Texas-based Union Drilling, which owns 53 rigs, including 2 under construction.
Union Drilling shares have gained about 81 percent of their value over the past two months.
(Reporting by Sunayan Bhattacharjee in Bangalore; Editing by Joyjeet Das and Sriraj Kalluvila)
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