SLB buying CAM
Posted: Wed Aug 26, 2015 11:26 am
SLB is acquiring Cameron International (CAM, $42.47, Outperform) for $12.7 billion in a stock (78%) and cash (22%) deal. CAM holders will receive 0.716 shares of SLB and cash of $14.44. This equates to a $66.36 share price for CAM, which is in line with our $65 target for CAM stock. The deal represents a 56% premium to yesterday’s closing price.
SLB currently trades at 9.7x 2015 EV/EBITDA, and the deal represents 10.2x 2015E EBITDA for CAM.
SLB expects the deal to close in 1Q16, and as there is very little product/service overlap, this should allow for a smooth DOJ approval.
The deal should allow a more complete solution to customers and should allow SLB to grow market share, in our view. Smaller companies offering discrete products and services will likely be at a disadvantage going forward.
A conference call to discuss the deal will be held at 8:30 a.m. EST. Dial-in details: 1-800-398-9386 (1-612-234-9960 outside of North America). Password: “Schlumberger Conference Call.”
SLB currently trades at 9.7x 2015 EV/EBITDA, and the deal represents 10.2x 2015E EBITDA for CAM.
SLB expects the deal to close in 1Q16, and as there is very little product/service overlap, this should allow for a smooth DOJ approval.
The deal should allow a more complete solution to customers and should allow SLB to grow market share, in our view. Smaller companies offering discrete products and services will likely be at a disadvantage going forward.
A conference call to discuss the deal will be held at 8:30 a.m. EST. Dial-in details: 1-800-398-9386 (1-612-234-9960 outside of North America). Password: “Schlumberger Conference Call.”