In a growth move it expects to also increase financial performance by leveraging operating costs and realizing tax benefits, international drilling contractor and services provider Parker Drilling (NYSE: PKD ) announced today that it has acquired International Tubular Services Limited, a privately held international rental tools and well services company.
Under the terms of the agreement, Parker paid $101 million for ITS at closing with an additional $24 million deposited into an escrow account, for a total of $125 million. The escrow funds will be paid to ITS upon obtaining certain consents or will be released to Parker under certain circumstances. The transaction was financed with a $125 million term loan provided by Goldman Sachs.
Parker Drilling president and CEO Gary Rich said, "ITS is one of the industry's leading independent international rental tools and well service companies with a broad footprint and a strong portfolio of products and service capabilities. By expanding our geographic presence and services offering, we are positioning ourselves to better serve the growing needs of international E&P operators and drilling contractors.
ITS had 2012 annual revenues of $119 million. It serves an extensive customer base of E&P companies, drilling contractors, and service companies in the Middle East, Latin America, Europe, and the Asia-Pacific region.
ITS CEO Joe Chandler will become vice president of Parker's international rental tools business unit.