Allis-Chalmers Energy to be acquired in $890 million transaction

By Jennifer Lanning Drey

Portland, Ore., Aug. 13 - Allis-Chalmers Energy Inc. has agreed to be acquired by Seawell Ltd. through a combination of shares and cash in a transaction valued at $890 million, including assumed debt, the companies announced Friday.

Seawell has a commitment for bridge financing that the company believes is adequate to cover the equity takeout portion, as well as any debt that it decides to refinance, Jorgen Peter Rasmussen, Seawell's executive chair, said Friday during a company conference call.

Rasmussen later noted that Seawell has not yet determined what the final capital structure will look like.

Under the agreement, Allis-Chalmers shareholders will have the right to elect $4.25 in cash or 1.15 Seawell common shares for each share of Allis-Chalmers common stock.

The cash alternative has been capped at a maximum of 35% of the outstanding shares in Allis-Chalmers.

Allis-Chalmers and Seawell are highly complimentary companies with minimal product and service overlap. The merger will expand Seawell's global presence, Rasmussen said during the call.

The companies expect the transaction to close by the end of calendar 2010.

Allis-Chalmers is a Houston-based oilfield services company.

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