Patterson-UTI Energy Inc. PTEN said Thursday it has reached an agreement to combine with NexTier Oilfield Solutions Inc .NEX in an all-stock deal with an enterprise value of $5.4 billion. Under the terms of the board-approved deal, NexTier shareholders will receive 0.7520 shares of Patterson-UTI stock for each owned. Patterson-UTI shareholders will own about 55% of the combined company, while NexTier shareholders will own about 45%. The deal is expected to close in the fourth quarter and to create a leading drilling and well completions business with 172 super-spec drilling rigs and a wells completion business with deployed capacity of 45 active spreads and 3.3 million hydraulic fracturing horsepower, the companies said in a joint statement. “As one company, we will have a significantly expanded, comprehensive portfolio of oilfield services offerings across the most active producing basins in the United States, along with operations in Latin America,” said Patterson-UTI Chief Executive Andy Hendricks. The companies had combined revenue of about $6.9 billion on an annualized basis in the first quarter. The deal is expected to boost EPS and free cash flow per share in 2024. It’s expected to generate annual cost savings and synergies of about $200 million within 18 months of close. Hendricks will remain CEO of the combined company, while NexTier CEO Robert Drummond will be vice chair. NexTier stock is down 3.9% in the year to date, while the S&P 500 SPX has gained 12%.
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