CALGARY, A.B. — Trican Well Service announced Wednesday morning that it will be buying rival Canyon Services Group Inc. in takeover bid worth approximately $637 million.
The takeover is the latest in a series of mergers and acquisitions since crude oil prices tumbled in the final months of 2014. The $637 million deal includes approximately $40 million of Canyon’s debt. Canyon shareholders will receive 1.7 shares of Trican for each share they own. That translates to an offer price of $6.63 per Canyon share, representing a 32 per cent premium to the stock’s Tuesday close.
Trican CEO Dale Dusterhoft said on Wednesday that both companies’ available hydraulic fracturing capacities were fully booked, and the companies had “increased visibility on strong activity through the third and fourth quarters of 2017.” The combined company will have 675,000 hydraulic horsepower of available fracturing capacity and service bases across Western Canada.
“This combination with Canyon will create a Western Canadian based leading energy services firm that has the asset base, efficient cost structure and financial capacity to create value for all of our combined stakeholders,” said Trican’s President and CEO Dale Dusterhoft. “We have always held Canyon in very high regard and look forward to welcoming the Canyon employees to the Trican family. Our companies have a shared base of values and an alignment on our commitment to safety, service, technology and operational excellence.”
Canyon’s President and CEO Brad Fedora will join Trican’s board of directors after the merger is finalized. “The Transaction provides our shareholders an opportunity to participate in the exceptional value potential of the combined company,” said Fedora. “Trican and Canyon have similar businesses and shared values and we are committed to driving a successful integration. We envision a combined company that will set the standard for service quality, field execution and operating efficiencies. We will deliver exceptional service and technology to our existing and prospective clients and will create new career opportunities for our employees.”