Ades ups offer to take over Shelf Drilling: Ades International Holding, along with its Cayman-based BidCo, agreed revised terms with Dubai-based and Oslo-listed Shelf Drilling to acquire all outstanding shares at NOK 18.50 per share, up from NOK 14 previously, according to a joint statement (pdf). The new price is a premium of 33.6% to its previous closing price on 15 September. Ades already owns 17.9% of Shelf.

The increase represents around 6% more enterprise value compared to the previous price — or a USD 100 mn increase in enterprise value terms, which Ades CEO Mohamed Farouk said is a reasonable increase to reach an agreement with shareholders in transactions of this size in an interview with Al Arabiya (watch, runtime: 5:47). The firm’s equity value is now estimated at USD 1.7 bn, up from USD 1.6 bn under the previous terms.

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The company has already secured 53.4% voting commitments in favor of the merger under the new terms, up from 15% before the initial August announcement. Shelf’s board of directors has unanimously recommended the offer. expects to secure 80-90% of votes, making the transaction almost certain, he said

Background: Shelf’s stock had fallen to NOK 18 a year ago from NOK 30 the previous year, Farouk said, before dropping to around NOK 8.5, which made the offer highly attractive, Farouk said in the interview.

Annual cost synergies are now estimated to come in at USD 50-60 mn, from USD 40-50 mn previously, taking into account jack-up market fundamentals. Farouk added that Ades currently operates in 13 countries, and after completing the transaction, that footprint will expand to 19 countries.

What’s next: Shelf Drilling cancelled the extraordinary general meeting scheduled for 16 September and will instead convene a new meeting expected to take place on or around 6 October. The transaction timeline remains unchanged, with closing still expected in 4Q.

ADVISORS- SpareBank 1 Markets is quarterbacking the transaction as Ades’s sole financial advisor, with Schjødt and Maples Group providing counsel. Meanwhile, Evercore is advising Shelf Drilling, with Advokatfirmaet Thommessen AS, Conyers and Latham & Watkins providing counsel.

Market reax: Ades’ share prices rose 2.3% to SAR 15.10 on market close.

IN OTHER M&A NEWS- First Milling moves closer to acquiring majority stake in Al Kenan Al Arabia: First Milling signed a binding agreement to acquire 60% of feed distributor Al Kenan Al Arabia Trading Company for SAR 48 mn, pending regulatory approvals, it said in a disclosure to Tadawul yesterday. This comes after last month’s full acquisition of Manar Feed Company, which boosted First Mills’ daily feed capacity by 420 tons to 1.3k tons.

ICYMI- We sat down with First Mills’ CFO Alaaeldin Shousha back in March for a chat about the company’s challenges, successes, and future goals, which include earmarking around SAR 210 mn for expansion over the next two years.

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