Seadrill Partners buys stake in Seadrill Operating
- Business & Finance
Seadrill Partners LLC has entered into an agreement with Seadrill Limited pursuant to which it will acquire an additional 28% interest in Seadrill Operating LP for approximately $373 million.
After completion of the acquisition, the Company will own a 58% interest in Seadrill Operating which is now in line with the ownership level of the Company’s other ultra-deepwater operating company which is 51% owned.
The objective of the transaction is to increase exposure to assets that are well known to the Company and that have stable cash flows. The transaction is expected to be cash flow and net asset value accretive and therefore to lead to increased distributions.
The acquisition of additional interests is expected to close before the end of July 2014 and will be financed by funds from recent common unit offerings and surplus funds from the Company’s recent term loan B financing.
Seadrill Operating has an ownership interest in three ultra-deepwater drilling rigs, West Aquarius, West Leo and West Cappella and one semi-tender rig, West Vencedor.
The Board of Directors of the Company and the Conflicts Committee of the Board (the “Conflicts Committee”) have approved the terms and conditions of the acquisition of the additional 28% interest in Seadrill Operating. The Conflicts Committee retained a financial advisor to assist with its evaluation of the transaction. The acquisition is expected to be accretive and is consistent with the Company’s growth and diversification strategy. The Board believes that the long-term fundamental outlook for the offshore drilling industry remains strong, and is positive about the Company’s future growth prospects.