Superior Energy Buys Complete Production Services in $2.6 Billion Deal

Superior Energy Services, Inc. (SPN) will buy rival Complete Production Services, Inc. (CPX) is a deal worth $2.6 billion. The deal is the oilfield services company’s first and is made up of a mix of cash and stock. Superior bought its rival in an effort to build up its pressure pumping business reports Reuters. Under the terms of the deal, Superior owns 52 percent of Complete.

Development of Pressure Pumping Services

According to Reuters, Superior is expecting that its North American operations will grow as customers migrate toward “oil and liquids-rich activities.” The deal with Complete is strategic. It helps increase Superior’s scale in North America and develop the breadth of its services. Of particular interest is Complete’s pressure pumping services and coil tubing Superior Chief Executive David Dunlap told analysts, “I am particularly excited about the pressure pumping fleet that Complete has built out … It’s a fleet that will exceed 670 hp (horse power) by the end of 2012.”  The deal is also expected to help Superior develop its efficiency.

North American Operations

Complete Production has a $1.61 billion market value and “has focused its business on building its presence around hydraulic fracturing in some of the most active drilling basins in North America, including the Haynesville, Marcellus, Bakken, Fayetteville, Woodford and Barnett shales,” reports Reuters. Superior is paying $32.90 a share, realized as $7 cash and 0.945 shares for each share of complete. Greenhill & Co. (GHL) advised Superior in the deal while JP Morgan Chase & Co. (JPM) took a minor financial advisory role and providing bridging financial support for the cash portion of the deal.