Noble to acquire Diamond Offshore for $1.7 billion

Noble Corporation has agreed to buy Diamond Offshore for $1.67 billion. Both companies operate in offshore drilling. Diamond has its head office in west Houston, while Noble is in the process of moving its head office from Sugar Land to the Westchase area of Houston.

The consideration split is 64% stock and 36% cash (or approx $600 million cash consideration), with Diamond shareholders projected to own about 15% of the combined company. Noble is also taking on Diamond’s debt of $550 million.

The key assets for Diamond are 4 deepwater drillships and 1 semi-submersible that can operate in harsh environments. In addition, the company has 5 other older semi-submersibles.

Second time a charm

Diamond entered Chapter 11 bankruptcy in April 2020 and exited a year later, having converted $2 billion of debt into equity. The company put itself up for sale in August 2021, but in January 2022 it announced it would remain independent after failing to attract any satisfactory takeover offers.

Diamond Offshore CEO Bernie Wolford has previously worked for Noble for over 28 years, over two separate stints. It’s also the second time he has been CEO of a company acquired by Noble as he was also CEO of Par Pacific until its acquisition in April 2021.

Noble acquisitions

Noble, which exited its own bankruptcy in February 2021, has been the leading consolidator in the offshore drilling sector. In addition to Par (bought for $358 million), it acquired Maersk Drilling in October 2022 for $2 billion.

Noble expects to realize $100 million in cost synergies. mostly through SG&A savings. The deal is expected to close by the first quarter of 2025.

It’s the latest in a series of merger announcements involving Houston-based public companies;

Investor Presentation – Noble – Diamond

Sign up for my newsletter

Leave a Reply

Your email address will not be published. Required fields are marked *