Under the terms of the agreement, which has been approved by both companies' boards of directors, National Oilwell will make a cash Tender Offer in approximately thirty days to acquire all of the outstanding shares of Hydralift. National Oilwell will offer NOK 55, approximately U.S. $7.33, for each share of Hydralift, which had an Oct. 10, 2002 closing price on the Oslo Bors of NOK 34.50. The total value of the transaction, including the assumption of debt, is approximately $300 million. The transaction is expected to be accretive immediately to earnings per share of National Oilwell.
For the three months ended June 30, 2002, National Oilwell reported revenues and operating profit of approximately $372 million and $30 million. Hydralift reported revenues and operating profit of approximately $109 million and $12 million for the same period.
Bjarne Skeie, chairman of the board of Hydralift, and Birger Skeie, chief executive officer, have each agreed to continue in their current positions after the combination.
Pete Miller, National Oilwell's chairman, president and CEO, said "This combination is an exceptional strategic fit and will create the leading global supplier of offshore drilling equipment, offshore production equipment and floating production systems. We believe Hydralift's product range will open new growing market segments to National Oilwell and benefit our customers' needs for more technical, fully integrated drilling systems. Additionally, we are extremely excited about the experience, reputation and leadership Bjarne and Birger will bring to our international management team."
Bjarne Skeie, chairman of Hydralift, said "The combination of these two companies gives Hydralift the opportunity to participate more rapidly in the consolidation of the offshore equipment industry. National Oilwell's market leading position and worldwide installed base will provide substantial growth opportunities for our products and strengthen our global market positions. We believe our customers, shareholders and employees will benefit from this combination."
The transaction is subject to various conditions, including certain regulatory approvals, and the acceptance of the Tender Offer by shareholders owning more than 90% of the outstanding shares. A group of Hydralift's key shareholders, including Bjarne Skeie and the board of directors, who collectively own approximately 22.8% of Hydralift's shares, have granted six-month options to National Oilwell to purchase their shares of Hydralift at a price equal to the Tender Offer price. First Securities ASA acted as financial advisor to National Oilwell and Pareto Securities ASA acted as financial advisor to Hydralift.
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