Complete Production Services to Merge With Superior Energy Services

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Last Update: 10-Oct-11 11:03 ET

Superior Energy Services (SPN $22.45 -4.96) and Complete Production Services (CPX $27.36 +6.98) announce that their Boards have unanimously approved a definitive merger agreement combining the two companies into the premier diversified mid-cap oilfield services company.

Complete stockholders will receive 0.945 common shares of Superior and cash of $7.00 in exchange for each share of Complete common stock held at closing. This represents a premium of 29% to Complete's average price over the last two months. Upon closing, and reflecting the issuance of new Superior shares, Superior and Complete stockholders are expected to own ~52% and 48%, respectively, of Superior's outstanding shares.

Superior expects the combination to be accretive to earnings per share and cash flow per share in 2012, excluding transaction and integration costs. Superior further expects the transaction will be balance sheet neutral as measured by key leverage ratios, yet ultimately is expected to result in an overall credit profile enhancement given the significant increase in scale and diversity provided by the combination.

Both Superior and Complete confirmed their prior guidance for 2011; however, Complete indicated that third quarter results will be below its prior guidance. Complete now expects third quarter 2011 EBITDA to be between $155 million to $160 million.

Items impacting Complete's third quarter, which are not expected to affect prior expectations for the fourth quarter of 2011, include delayed deliveries of fluid ends causing intermittent shut downs of several frac fleets, defective components on recently deployed coiled tubing units, flooding in Pennsylvania and northern Mexico, and repositioning of one of Complete's pressure pumping fleets from the Barnett Shale to West Texas.