Kirkland & Ellis counsels Diamond Offshore Drilling, Inc. on its definitive merger agreement to be acquired by Noble Corporation plc (NYSE: NE, CSE: NOBLE) in a stock and cash transaction valued at $1.6 billion (excluding debt).
On June 10th 2024, it was revealed that Noble Corporation plc and Diamond Offshore Drilling, Inc have finalized a merger agreement, with Noble set to purchase Diamond through a combination of stock and cash. In this deal, Diamond’s investors will be awarded 0.2316 shares of Noble in exchange for their Diamond shares, along with a cash payout of $5.65 for every Diamond share, marking an 11.4% increase over the closing stock prices on June 7, 2024. After the merger, Diamond’s investors will hold around 14.5% of Noble’s total shares.
The Kirkland group was guided by partners, Sean Wheeler, Debbie Yee, and Camille Walker; debt finance ally Rachael Lichman; capital markets allies Julian Seiguer and Atma Kabad; tax allies David Wheat and Bill Dong; antitrust & competition allies Ian John, Chuck Boyars, Thomas Wilson, and Sion Davies; and executive compensation allies Rob Fowler and Stephanie Jeane.
Noble’s President and Chief Executive Officer, Robert Eifler, said,
“This acquisition enables Noble to continue our journey of delivering superior innovation and value to a broad range of the leading offshore operators across the world. Our position will be strengthened with the addition of four 7th generation drillships and one of the most high-spec harsh environment semisubmersible rigs in the world. Additionally, Diamond’s five conventional deepwater and midwater rigs have averaged above 85% utilization over the last 3 years and currently have strong forward contract coverage. Supported by Diamond’s $2.1 billion of backlog and $100 million of anticipated cost synergies, we expect the transaction to be immediately accretive to our free cash flow per share and contribute to accelerated growth in our return of capital to shareholders.”
Key Transaction Terms
Under the terms of the merger agreement, Diamond shareholders will receive 0.2316 Noble shares and $5.65 per share in cash for each Diamond share (representing $600 million total cash paid to Diamond shareholders on a fully-diluted basis). Following the close of the transaction, Diamond shareholders will own approximately 14.5% of Noble’s shares on a fully-diluted basis.
The implied cash and stock consideration to be received by Diamond shareholders is $15.52 per share, representing a premium of 11.4% to Diamond’s closing share price on June 7, 2024.
Noble intends to fund the cash portion of the transaction through new debt financing, which Noble has secured through a $600 million committed bridge financing facility.
At closing, the Noble Board of Directors will be expanded to include one member from the Diamond Board.
The transaction is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals and the approval of Diamond shareholders. The transaction is expected to close by the first quarter of 2025.
The transaction has been unanimously approved by the Board of Directors of each company.
Advisors
Morgan Stanley & Co. LLC is acting as lead financial advisor to Noble and has provided committed financing. Wells Fargo and SB1 Markets also advised Noble. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to Noble. Guggenheim Securities, LLC and TPH&Co., the energy business of Perella Weinberg Partners, are acting as lead financial advisors to Diamond. Kirkland & Ellis LLP is acting as legal advisor to Diamond.
About Noble Corporation plc
Noble is a leading offshore drilling contractor for the oil and gas industry. The Company owns and operates one of the most modern, versatile, and technically advanced fleets in the offshore drilling industry. Noble and its predecessors have been engaged in the contract drilling of oil and gas wells since 1921. Noble performs, through its subsidiaries, contract drilling services with a fleet of offshore drilling units focused largely on ultra-deepwater and high specification jackup drilling opportunities in both established and emerging regions worldwide.
Diamond Offshore is a leader in offshore drilling, providing innovation, thought leadership and contract drilling services to solve complex deepwater challenges around the globe.
Published by: www.lawyer-monthly.com – June 12, 2024