Fledgling acquisitive oilfield services provider Archer took a step Monday toward expanding its global reach with a $742 million deal to acquire US pressure pumper Great White Energy Services.
Formerly known as Norway-based Seawell, Archer is based in Bermuda.
The acquisition derails a pending initial public offering by Oklahoma City-based Great White, which had planned to trade under the ticker symbol "JAWS."
In a statement, Archer said it believes the Great White acquisition will provide "an entry point into the rapidly expanding frac market" by doubling Archer's coil tubing and directional drilling capacity in the US.
With revenues of $80.4 million in the quarter that ended March 31, Great White operates 13 service centers in various US unconventional plays in Michigan, Oklahoma, Texas, West Virginia, Colorado, Arkansas and Wyoming, according to Archer's statement announcing the transaction, which is expected to close this quarter.
"Great White's services are targeted at drilling and completing the horizontal wells that are critical in increasing the ultimate recovery in unconventional basins," Archer said in describing its target's business model.
Archer said it believes the acquisition will allow the company to offer complete services in all major US unconventional resource plays while enhancing the opportunity to expand those services into unconventional plays emerging elsewhere around the world.
The Archer statement quoted CEO Jorgen Rasmussen calling the deal "another important step in our continued quest to create a global leader in drilling and well services that is focused on assisting our customers produce more hydrocarbons through their wells."
He said: "We plan to take these services into the international areas in the coming years."
For the first quarter, Archer posted revenues of $420 million.
Archer said financing for the Great White acquisition has been guaranteed by Archer's two largest shareholders, Seadrill and Lime Rock Partners.
According to a recent presentation, Archer generated 41% of its 2010 revenues in Europe and 27% in North America.
Based in Bermuda with its shares traded on Norway's Oslo Stock Exchange, Archer only recently emerged with that name February 28.
Prior to then, it was known as Norway-based Seawell. and traced its roots back to the 2007 spinoff by drilling contractor Seadrill of its well services division.
As Seawell, the company closed February 23 on the $1.1 billion acquisition of Houston-based Allis-Chalmers, creating a global company with operations in more than 30 countries.
Prior to the Allis-Chalmers acquisition, Seawell also had executed smaller deals with its December 16, 2010, acquisition of Gray Wireline for $160.5 million and January 27 acquisition of Universal Wireline for $25.5 million.
A unit of equity fund manager Wexford Capital, Great White began operations in December 2005 with the acquisition of the assets of Quantum Drilling Motors for $25.9 million, according to its February filing for the IPO with the US Securities and Exchange Commission.
Since 2005, the company said it had invested a total of $133.9 million on strategic acquisitions designed to "capture the growth in the extended reach horizontal drilling markets in the US unconventional shale oil and natural gas resource plays."
Besides pressure pumping services, Great White also provides pressure control services and horizontal and directional drilling equipment.
