Nabors Industries Sells Quail Tools for $600M

By Hao Liu • Sunday, August 24 15:37 • Permanent Link

Nabors Industries Ltd. has just announced the sale of its subsidiary, Quail Tools, LLC, to Superior Energy Services, Inc. for a total consideration of $600 million. The deal is expected to reduce Nabors' net debt by more than 25%. The transaction includes a preferred supplier agreement, under which Superior will be the preferred supplier of rental drill pipe and related products to Nabors. Since the close of the Parker transaction, Quail has exceeded expectations, with an estimated adjusted EBITDA of approximately $150 million in 2025, excluding any synergies that Superior may realize.

Upon full realization of the net proceeds from the transaction, Nabors expects to accelerate more than five years of anticipated free cash flow from the combined Parker businesses. It also anticipates a reduction in net debt of more than 25%, with annual interest savings in excess of $50 million, enhancing the company's financial flexibility. Additionally, Nabors will retain the drilling rig, O&M, and tubular running services operations acquired from Parker, which are expected to generate full-year 2025 adjusted EBITDA at a run rate of at least $55 million, including realized 2025 post-closing synergies.

The combined net effect of the Parker and Quail transactions to Nabors' legacy business is summarized as follows: attributing proceeds of $625 million to the 4.8 million Nabors common shares issued would result in a share issuance value of approximately $130 per share. Additionally, the retained businesses are expected to contribute more than $55 million annual run-rate adjusted EBITDA, translating into an additional implied equity value of $107 million, which represents an additional $22 per issued share.

The sale of Quail Tools is expected to create significant value for Nabors' shareholders. The company anticipates that the retained businesses will contribute positively to its results and further improve as targeted cost synergies are realized. The market has reacted to these announcements by moving the company's shares 7.61% to a price of $36.05. Check out the company's full 8-K submission here.

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