Ensco’s Acquisition of Atwood Oceanics to Strengthen Ensco's Position as an Offshore Driller

Ensco plc and Atwood Oceanics, Inc. have jointly announced that they have entered into a definitive merger agreement under which Ensco will acquire Atwood in an all-stock transaction. The definitive merger agreement was unanimously approved by each company's board of directors.

The transaction will join two leading offshore drillers - combining long-established histories of operational, safety and technical expertise with high-quality assets that cover the world's most prolific offshore drilling basins.

The acquisition will strengthen Ensco's position as an offshore driller with exposure to deep- and shallow-water markets that span six continents. Upon closing, Ensco will add six ultra-deepwater floaters, including four of the most capable drillships in the industry, and five high-specification jackups. The combined company will have a fleet of 63 rigs, comprised of ultra-deepwater drillships, versatile deep- and mid-water semisubmersibles and shallow-water jackups, along with a diverse customer base of 27 national oil companies, super-majors and independents.

Under the terms of the merger agreement, Atwood shareholders will receive 1.60 shares of Ensco for each share of Atwood common stock for a total value of $10.72 per Atwood share based on Ensco's closing share price of $6.70 on May 26, 2017. This represents a premium of approximately 33% to Atwood's closing price on the same date. Upon close of the transaction, Ensco and Atwood shareholders will own approximately 69% and 31%, respectively, of the outstanding shares of Ensco plc. There are no financing conditions for this transaction.

Ensco expects to realize annual pre-tax expense synergies of approximately $65 million for full year 2019 and beyond. The combination is expected to be accretive on a discounted cash flow basis.

The transaction is subject to approval by the shareholders of Ensco and Atwood, as well as other customary closing conditions. The companies anticipate that the transaction could close as soon as calendar third-quarter 2017.

Ensco will continue to be located in the UK, and senior executive officers will be located in London and Houston. Ensco plc shares will continue to trade on the New York Stock Exchange under the symbol "ESV".

Keywords: Jackups, Drillships, Ensco, Atwood Oceanics, Semisubmersibles, ARC Advisory Group.