HOUSTON (The Deal) -- Houston oil services provider C&J Energy Services (CJES) said after the markets closed Wednesday that it agreed to combine with the U.S. and Canadian completion and production businesses of investor-embattled Nabors Industries (NBR) in a deal valued at $2.86 billion, tripling its stimulation fleet into the fifth largest in North America.
C&J said the deal -- structured as a Reverse Morris Trust -- will result in Nabors receiving 62.5 million shares of a new C&J entity and $940 million in cash. C&J shareholders will get one share in the new entity for each share they hold in what's expected to be a tax-free exchange. Nabors will end up with 53% of the new C&J shares while C&J stockholders will hold 47%.
C&J will change its name to C&J Energy Services Ltd. and be listed on the New York Stock Exchange under the same ticker symbol CJES. It will be based in Bermuda, like Nabors, with corporate offices remaining in Houston, its management team staying the same and more than 10,000 employees.
C&J expects the transaction to generate financial benefits and stockholder value, including adding to C&J's cash earnings per share in the first full year of combined operations and creating large cost and sales synergies.
"Today is a monumental day in C&J's history," C&J CEO and founder Josh Comstock said in a statement. "Among many key strategic benefits of this combination is accelerated growth and scale, enabling the rapid advancement of our stated goal of transforming C&J Energy Services from what I started as a small energy services company to a diversified, large-scale, global provider of technologically advanced services."