Minter Ellison has acted for ASX-listed company Transfield Services Limited (Transfield Services) in the execution of a sale agreement for the acquisition of the unlisted Easternwell Group, advised by Baker & McKenzie, for $575 million.
The sale price comprises $540 million in cash and $35 million in Transfield Services shares issued to management who are shareholders in Easternwell and other vendors.
In addition to the $575 million purchase price, an additional earn-out of up to $17 million is payable if certain earnings milestones are reached for the financial year ending June 2012.
Queensland-based Easternwell is a well services and well construction business focused on the mining, oil & gas and infrastructure sectors. It employs over 800 people across Australia and operates 65 rigs, with blue chip customers such as BHP Billiton, Cameco, Chevron, Rio Tinto, Santos and Woodside.
According to Minter Ellison, the acquisition will strengthen Transfield Services' position as one of Australia's leading oil & gas service providers and deepens its exposure to growth opportunities within Australia's expanding resources sector, such as in iron ore, conventional oil & gas and coal seam gas.
The acquisition is scheduled to complete on 22 December 2010 and will be funded through a combination of debt and equity, including approximately $271 million in drawn debt under new facilities and a 2 for 9 accelerated non-renounceable pro-rata entitlement offer to raise $294 million.
The entitlement offer is being fully underwritten by J.P. Morgan, advised by Mallesons Stephen Jaques, and is priced at $3 per share, which represents a 14 per cent discount to the Transfield Services'' closing share price before the announcement.
The Minters team consisted of lead partner Costas Condoleon, Hemang Shah, Liz McKechnie, Simon Ball, Adrian Tan, Martin Bennett, Chris Jordan and Ker Wai Tiam.
Baker & McKenzie's Brendan Wykes also acted, along with Mallesons' Meredith Paynter.