Last summer showed signs and portents that the energy services sector was going to start picking up. One of those is the pace of merger and acquisition activities. While bad managers buy at the top, good companies try to expand their businesses just before the sector recovers - when the price of deals is lower and the opportunity for incremental operating leverage is greater. With that in mind, Superior Energy Services' (NYSE:SPN) deal for Complete Production Services (NYSE:CPX) could be a little more than just a combination of two smaller energy service players.
The Deal
Superior is acquiring CPX in a deal with a total value (at the time of the announcement) of $2.7 billion. The deal is a combination of cash ($7 per CPX share) and stock (0.945 shares of Superior) that values CPX shares at just under $33. That's a 61% premium to Friday's close and a 29% premium to the two-month average, but almost 30%
below the average
analyst target price.
Assuming that the deal goes through as described, Superior
shareholders will own 52% of the combined company at closing
Read more at this link:
http://stocks.investopedia.com/stock-analysis/2011/A-Superior-Offer-For-Complete-Production-CPX-SPN-SLB-HAL-BHI-BAS-KEG1013.aspx
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