Bloomberg News

Superior Energy to Buy Complete Production for $2.6 Billion

October 10, 2011

(Updates with closing share prices in fifth paragraph.)

Oct. 10 (Bloomberg) -- Superior Energy Services Inc., a U.S. oilfield-services provider, will buy competitor Complete Production Services Inc. for about $2.6 billion in cash and stock as declining crude prices drive down share values.

Investors in Houston-based Complete will get 0.945 common share of Superior and $7 in cash for each share they own, the companies said today in a statement. Based on Oct. 7 closing prices, the purchase by New Orleans-based Superior represents a 45 percent premium to Complete’s average stock price during the last 20 trading days.

Oil futures have fallen 8 percent this year in New York trading as global economic growth slows, stoking concern that demand for crude and fuels will drop. The decline in prices has eroded the valuations of some energy companies, making them attractive acquisition targets. Complete has tumbled 41 percent in the past three months in New York.

Goldman Sachs Group Inc. and Sanford C. Bernstein Co. have predicted a surge of oil and natural-gas takeovers after the industry’s worst slump in three years. China Petrochemical Corp. today agreed to buy Calgary-based Daylight Energy Ltd. for C$2.2 billion ($2.1 billion) in its largest acquisition this year. Korea National Oil Corp. said last week it plans to resume acquisitions of overseas assets after a six-month hiatus.

Complete rose 40 percent, its biggest increase ever, to close at $28.42 in New York. Superior fell 14 percent, its biggest decline since December 2008, to $23.63.

Deal Premium

Acquirers of oil-services companies have paid an average premium of 28 percent in deals announced in the past 12 months, according to global data compiled by Bloomberg. Superior Energy’s purchase is expected to be completed by the end of this year, the companies said.

Oilfield-services companies help producers get oil and gas by renting out employees, tool and other equipment to well owners. Complete focuses on unconventional fields in North America, including the Haynesville, Marcellus, Bakken and Fayetteville shale formations, according to its website.

Superior’s Chief Executive Officer David Dunlap will head the combined company, which will have two independent directors from Complete. Superior was advised by Greenhill & Co. and JPMorgan Chase & Co., which also provided bridge financing for the cash portion of the deal, according to the statement. Complete was advised by Credit Suisse Securities (USA) LLC.

--Editors: Tina Davis, Jasmina Kelemen

To contact the reporter on this story: Rakteem Katakey in New Delhi at rkatakey@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net


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