Oilfield services company Oil States International (NYSE:OIS) has agreed to acquire The MAC Services Group (ASX:MSL), a provider of remote accommodations for those working on mining projects in Australia, for A$651 million (C$651.5 million).
Under the terms of the deal, The MAC will receive A$3.90 per share in cash, representing a premium of 16% to yesterday's closing price. The purchase is expected to be accretive to Oil States' earnings in 2011, excluding one-time transaction costs, the company said.
The acquisition will no doubt expand Oil States' accomodations business, and establish its presence in the Australian market, as The MAC currently operates from six villages totalling close to 5,000 rooms. Five of the villages operate in Queensland, Australia, where MAC serves some of the most active metallurgical coal producers in the Bowen Basin.
Oil States said that The MAC is also planning an expansion, targeting future sites in New South Wales and Western Australia in regions that support coal, gold, iron ore and LNG developments.
"Our planned combination with The MAC will allow us to support over 11,000 workers a day in our lodges and villages with plans to grow room capacity to over 14,000 rooms by this time next year," said Oil States' president and CEO Cindy B. Taylor.
The acquisition, which is expected to close by the first quarter of 2011, will be funded with cash on hand and borrowings from a new five-year $900 million loan facility from Wells Fargo Bank. The MAC's board has recommended the deal to its shareholders.
Oil States supplies a range of services to the oil and gas industry, including remote site accomodations, rental tools, oil country tubular goods distribution and land drilling services. It is also a manufacturer of products for deepwater production facilities and subsea pipelines.
Disclosure: No Positions