The largest drilling company in the nation is making a bid for the third largest. When it comes to mergers and acquisitions headlines in Canada, Calgary's Precision Drilling Ltd. is making them by looking to acquire Trinidad Drilling Ltd. to a tune of $540 million. The all-share offer was spurred on by Trinidad Drilling's attractive American rig fleet.
Precision Drilling says its primary objective isn't in acquiring other firms, but the company's CEO said this deal was too sweet to pass up. Since both companies have focused on North America and the Middle East, it is hoped that this acquisition will sustain Precision's growth. The white knight offer is backed by Trinidad Drilling and it has suggested to its shareholders to support the offer. Meanwhile, Trinidad Drilling has also advised its shareholders to continue to reject a hostile takeover bid by Ensign Energy Services Inc.
A business analyst stateside said this merger will be favourable to the drilling market in Canada since it will reduce the number of rigs. The analyst called Precision's offer a fair valuation. If the deal closes, Precision will have a total of 398 drilling rigs -- 202 in Canada, 26 in the Middle East and 170 in the United States.
These types of big business mergers and acquisitions are complex. When it comes to any business deals in Canada that involve precise rules, having the advice and guidance of an experienced legal team can be invaluable. It may make the difference between a very successful venture or a costly error.