HOUSTON (AP) — Land drilling company Sidewinder Drilling Inc. is buying Union Drilling Inc. for about $242 million.
Sidewinder Chairman and CEO Jon Cole said that the transaction will increase its scale of operations, broaden its customer base and expand its exposure to North American shale exploration and drilling.
The companies said Tuesday that Sidewinder subsidiary will start a tender offer to buy all of Union Drilling's outstanding stock for $6.50 per share. This is a 3 percent premium to the Fort Worth, Texas, company's closing price of $6.13 per share on Monday.
Shares of Union Drilling gained 28 cents, or 4.6 percent, to $6.41 in premarket trading.
Union Drilling Inc.'s board has unanimously approved the deal.
At least 67.2 percent of Union Drilling's outstanding stock must be tendered for the transaction to move forward.
Sidewinder, which is based in Houston, said that is has obtained fully committed financing for the deal.
The buyout is expected to close in the fourth quarter.