Archer Limited: Divestiture of the North American Rental and Tubular division to Clearlake Capital Group

Hamilton, Bermuda (May 22 2013)

Archer Limited today announced that the Company has agreed to sell its North American Rental and Tubular division to an affiliate of Clearlake Capital Group, L.P. for approximately $244 million.  The all-cash transaction is expected to close in June 2013, and is subject to regulatory approvals and other customary closing conditions.  Archer will use the majority of the proceeds from the sale to pay down outstanding balances on its credit facilities. 

Archer's Rental and Tubular division provide equipment and services to exploration and production operators across key U.S. land markets and the U.S. Gulf Of Mexico, in addition to both land and offshore markets in Mexico.  The division's two primary offerings are (i) rental equipment, which provides primarily drilling and completion equipment such as drill pipe, heavy weight drill pipe, drill collars, tubular handling tools, pressure control equipment and tubing, and (ii) tubular services, which includes casing and tubing running and tubular handling services.  For both offerings, the Company is one of the largest providers in the North American market.

In 2012 Archer's North American Rental and Tubular Division generated $100 million in revenue and contributed $45 million in earnings before income taxes, depreciation and amortization (EBITDA). At the end of December the business had net assets of $244 million and employed approximately 250 employees.

"I am pleased that with Clearlake Capital we have found a new owner for Archer's North American Rental and Tubular business, who is focused and committed to invest and grow these businesses going forward. The employees and the management team of Archer's Rental and Tubular division have built an agile organization which has provided high service quality to our customers over the years.  I am confident that its employees and management team together with Clearlake will continue to build on that legacy," said Ronney Coleman, President North America and Executive Vice President of Archer. 

"This divestiture will help Archer to focus its efforts in North America on its service and product offering directed towards unconventional resources, while operations in other parts of the world are not impacted by this transaction. It will also help to simplify and further deleverage the company" said Fredrik Halvorsen, CEO and Vice Chairman of Archer.

José E. Feliciano, a founding partner at Clearlake, said: "These businesses are well-positioned to increase their market share and capitalize on continued growth in the North American oil and gas market.  They represent a strong platform and we are eager to support their outstanding management team and invest to expand the business."

Clearlake Capital Group, L.P. is a private investment firm focused on special situations and private equity investments such as corporate divestitures, recapitalizations, buyouts, reorganizations, turnarounds and other equity investments.  Clearlake seeks to partner with world-class management teams by providing patient, long-term capital and operational expertise to invest in dynamic businesses.  Clearlake currently manages approximately $1.4 billion of equity capital, and Clearlake's founding principals have led over 50 investments totaling more than $3 billion of capital in sectors including business services, communication, consumer products/retail, defense & public safety, energy/power, healthcare, industrials, media, and technology.

Simmons & Company International served as exclusive financial advisor and Andrews Kurth LLP served as legal advisor to Archer in this transaction.  Jefferies LLC served as financial advisor and Vinson & Elkins LLP served as legal advisor to Clearlake in this transaction. 

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

 

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