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Dec 12 U.S. driller Patterson-UTI Energy Inc
said on Monday it would buy its smaller counterpart
Seventy Seven Energy Inc in an all-stock deal worth
$1.76 billion including debt.
Seventy Seven shareholders will receive 1.7725 shares of
Patterson-UTI for each share held, Patterson-UTI said.
The deal includes $336 million of Seventy Seven Energy's
debt net of cash and warrant proceeds.
Patterson-UTI said it will issue about 49.6 million common
shares for the deal and will pay off Seventy Seven's debt
through a combination of cash on hand and its own credit.
Patterson-UTI will have more than 1.5 million hydraulic
fracturing horsepower following the closing of the transaction,
The company also expects to achieve $50 million in synergies
from the deal, which is expected to add to its cash flow.
Seventy Seven Energy, which provides drilling and hydraulic
fracturing, or fracking, services, had cut its debt by $1.1
billion and exited bankruptcy in early August under the control
of its creditors.
(Reporting by Parikshit Mishra in Bengaluru; Editing by Amrutha
Gayathri and Gopakumar Warrier)