Tuscany Expands In LatAm, Secures Loan

Canada-listed Tuscany International Drilling has agreed to acquire France’s Caroil as it looks to create a leading EM drilling company with activities in both Latin America and Africa. The transaction’s enterprise value based on closing June 20 stock prices has been calculated at $202m, before transaction costs, with a valuation EV/Ebidta ratio of 4.2x. Tuscany is paying for the acquisition with $120m in cash, 82.5m of common shares and another 27.5m of non-voting common share warrants. Both companies are involved in onshore drilling services in Latin America. At the same time, Tuscany is securing a $220m senior secured guaranteed loan and revolving credit facility through Credit Suisse, which is already heard sending invitations to banks to participate. Banks are being shown a $195m 5-year amortizer and a $25m 3-year revolver, both with margins of L+650bp, drawn in the case of the revolver. Proceeds are going toward the potential purchase ($115m) and the refinancing of existing debt at the Tuscany level ($80m). Jennings Capital Inc is acting as Tuscany’s financial advisors, while AM Capital is doing the same for seller Maurel & Prom.