CanElson Drilling Inc (CDI.V) said it would acquire Totem Drilling Ltd, a private drilling rig operator, for C$40 million ($37.31 million) in cash and stock, in a bid to expand into the oil-rich Bakken shale.
Alberta-based CanElson is engaged in the manufacture, acquisition and operation of drilling rigs for the oil and gas industry.
Totem sharehoders will receive C$2 in cash and 0.7407 of CanElson share each and the total cash consideration would not exceed C$10 million, CanElson said in a statement.
Peters & Co Ltd and Lightyear Capital Inc are acting as financial advisers to CanElson.
Totem has agreed not to solicit further offers or initiate discussions or negotiations with any third party and CanElson expects the acquisition to close by June 7.
Totem operates in the Bakken area of south east Saskatchewan.
Shares of CanElson closed at C$2.80 Friday on the Venture Stock Exchange. ($1=1.072 Canadian dollar) (Reporting by Aftab Ahmed in Bangalore; Editing by Maju Samuel) ([email protected]; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800