Transaction valued at $193.7-million, includes $36.6-million in debt
CALGARY—Contract oil driller Western Energy Services Corp. saw its stock drop more than seven per cent Feb. 22 after announcing plans to buy IROC Energy Services Corp.
The transaction, valued at $193.7-million, includes $36.6-million in debt.
Western is offering a combination of $1.24 in cash and 0.2338 of a Western share for each share of the Red Deer, Alta.-based well servicing and oilfield equipment rental company.
The combination, worth $3.10 per share, represents a 31 per cent premium to IROC’s closing price of $2.37 the previous day and a 32 per cent premium to its 20-day volume-weighted average of $2.35.
Vancouver-headquartered Western said the cash component of its offer is limited to just under $63-million and its stock component to a maximum of some 12.3 million shares.
Upon conclusion of the deal, Western shareholders would own about 83.8 per cent of the combined entity and IROC shareholders 16.2 per cent.