Offshore drilling giant Noble Corporation has made an offer to acquire US offshore rig owner Diamond Drilling.
Noble will acquire Diamond Drilling in a stock plus cash transaction in which the latter’s shareholders will receive 0.2316 shares of Noble, plus cash consideration of $5.65 per share for each share of Diamond stock or $600m total cash paid to Diamond shareholders on a fully diluted basis. This part of the transaction will be funded through new debt financing.
That is an 11.4% premium to closing stock prices on June 7, 2024. Diamond shareholders will own approximately 14.5% of Noble’s outstanding shares upon closing and the Noble board will be expanded to include one person from the Diamond board. The cash-and-stock deal valued at around $2.1bn, according to different sources, is expected to close by the first quarter of 2025.
Noble also approved a 25% increase in its quarterly dividend to $0.50 per share, starting with the dividend set to be paid in the third quarter of 2024.
Through this acquisition, Noble will increase its rig fleet from 31 to 41 owned plus the Vela drillship which Diamond Offshore is managing. Of the 41, 28 will be semisubs and drillships while 13 will be jackups.
Upon closing, the combined backlog will be around $6.5bn with $2.1bn in backlog coming from Diamond. This includes an average backlog on Diamond’s four 7th-generation drillships of approximately two years at $460,000 daily.
“Our position will be strengthened with the addition of four 7th-generation drillships and one of the most high-spec harsh environment semisubmersible rigs in the world [the BlackRhino]. Additionally, Diamond’s five conventional deepwater and midwater rigs have averaged above 85% utilisation over the last three years and have strong forward contract coverage,” Noble’s president and CEO Robert Eifler said.
