EVI, Weatherford Execs See Merger Closing In June
NEW YORK (Dow Jones)--Top executives of EVI Inc. (EVI) and
Weatherford Enterra Inc. (WII) said they their planned merger could close
in late June, following shareholder votes of the two oilfield equipment
companies.
That assumes the companies will file for antitrust approval in roughly two
weeks and file with the Securities and Exchange Commission at the end of
March, the executives said in a conference call with analysts Wednesday to
discuss the deal.
As reported, EVI agreed earlier to buy Weatherford in an exchange of 0.95
EVI shares for each Weatherford share, or roughly $50.17 per
Weatherford share. That values the acquisition at roughly $2.6 billion.
The merger would create the fourth-largest oil-services company with a
combined stock market value of $5.1 billion, which would have had $2
billion in revenues last year.
It marries EVI, a large maker of drill pipe and well completion equipment,
with Weatherford, best known as the leader in oilfield equipment rentals.
The merged company, to be called EVI Weatherford, will be able to offer a
full range of production and completion products and services for oil and
natural-gas producers.
The companies expect the combination to create $40 million in annual
pretax cost savings in 1999, mostly because of consolidation of their North
American distribution systems and consolidation of some administrative
operations, said EVI Chairman and Chief Executive Bernard
Duroc-Danner. Duroc-Danner will retain those positions at the merger
company, to be called EVI Weatherford.
But Weatherford Chief Executive Thomas Bates, who will become the new
company's chief operating officer, said, "This is a growth story, this is not a
consolidation story."
The executives said they expect the combination to generate at least $50
million of additional revenues in 1999 from business synergies.
Based on the cost savings and the synergies, the executives said they expect
the merger to prove accretive to earnings starting in 1999, and accretive to
cash flow starting in 1998.
Duroc-Danner said he doesn't expect the merger to raise any antitrust
issues.
Merrill Lynch & Co. and Simmons & Co. were the investment bankers for
Weatherford, and Morgan Stanley Dean Witter gave a fairness opinion to
EVI. |
