Merger of equals: Patterson-UTI and NexTier combine in $5.4bn deal

BY Fraser Tennant

In a merger that creates an industry-leading drilling and completions services provider, Patterson-UTI Energy, Inc. is to combine with NexTier Oilfield Solutions Inc. in an all-stock transaction valued at approximately $5.4bn.

Under the terms of the definitive agreement, NexTier shareholders will receive 0.7520 shares of Patterson-UTI common stock for each share of NexTier common stock owned.

Moreover, upon closing of the transaction, Patterson-UTI shareholders will own approximately 55 percent and NexTier shareholders will own approximately 45 percent of the combined company on a fully diluted basis. The merger is expected to be tax-free to shareholders of both companies.

Patterson-UTI is a leading provider of oilfield services and products to oil and natural gas exploration and production companies in the US and other select countries. NexTier is an industry-leading US land oilfield service company, with a diverse set of well completion and production services across active and demanding basins.

The combined company will operate under the name Patterson-UTI Energy, Inc.

"This merger unites two top-tier and technology-driven drilling and well completions businesses, creating a leading platform at the forefront of innovation,” said Andy Hendricks, chief executive of Patterson-UTI. “As one company, we will have a significantly expanded, comprehensive portfolio of oilfield services offerings across the most active producing basins in the United States, along with operations in Latin America.”

The transaction has been unanimously approved by the boards of directors of both companies.

“We believe offering a comprehensive suite of solutions on one integrated platform will position the combined company as the partner of choice for a greater number of customers across geographies and throughout the full well lifecycle,” said Robert Drummond, president and chief executive of NexTier. “We are confident that together, we will be able to drive efficiencies across the portfolio and unlock more value for shareholders and customers than either organisation could achieve on its own.”

The merger is expected to close in the fourth quarter of 2023, following Patterson-UTI and NexTier shareholder approval, regulatory approvals and satisfaction of other customary closing conditions.

“Together, we will better serve our employees, shareholders, customers, suppliers and the communities in which we operate,” concluded Mr Hendricks. “We look forward to working with the NexTier team to successfully bring our two companies together.”

News: Patterson-UTI, NexTier merge to form $5.4 billion oilfield services firm

AstraZeneca and Quell in $2bn-plus deal

BY Fraser Tennant

In the latest of a series of deals involving emerging forms of cell therapy, Cambridge-based drugmaker AstraZeneca is to collaborate with biotechnology start-up Quell Therapeutics to develop cell-based treatments for autoimmune diseases.

Under the terms of the agreement, Quell will receive $85m upfront from AstraZeneca – which comprises a predominant cash payment and an equity investment – and is also eligible to receive over $2bn for further development and commercialisation milestones, if successful, plus tiered royalties.

The collaboration between AstraZeneca and Quell Therapeutics will develop multiple engineered T-regulator (Treg) cell therapies that have the potential to be curative in type 1 diabetes and inflammatory bowel disease indications.

“We are extremely pleased to have AstraZeneca on board as our first major partner,” said Iain McGill, chief executive of Quell Therapeutics. “This collaboration builds on our pioneering work to develop exquisitely engineered, multi-modular Treg cell therapies for immune disorders and provides excellent validation for the technologies and capabilities we have established.”

In addition, Quell’s proprietary toolbox of Treg cell engineering modules, including its innovative Foxp3 Phenotype Lock will be leveraged to develop autologous multi-modular Treg cell therapy candidates for major autoimmune disease indications.

“This is a very exciting collaboration with Quell as we look to expand our next-generation therapeutic toolbox and explore the untapped potential with Treg cell therapies in autoimmune indications,” said Mene Pangalos, executive vice president of BioPharmaceuticals R&D at AstraZeneca. “This is aligned with our strategy to target underlying disease drivers to stop or slow disease progression and ultimately accelerate the delivery of transformative care to patients with chronic autoimmune conditions.”

A global, science-led biopharmaceutical company that focuses on the discovery, development and commercialisation of prescription medicines in oncology, rare diseases and biopharmaceuticals, AstraZeneca operates in over 100 countries and its innovative medicines are used by millions of patients worldwide.

Mr McGill concluded: “We are proud and excited to partner our leading science with the deep experience of AstraZeneca to accelerate the application of our Treg cell therapy platform in major autoimmune disease, where we believe there is a broad opportunity to reset immune tolerance and drive durable responses for patients.”

News: AstraZeneca signs $2 billion agreement with Quell to develop cell therapies

Novartis to acquire Chinook for $3.2bn

BY Richard Summerfield

Pharmaceutical firm Novartis has agreed to buy clinical stage biopharmaceutical company Chinook Therapeutics in a deal worth up to $3.5bn.

The transaction values Seattle-based Chinook at $40 a share, compared to Friday’s closing price of under $24, a premium of 67 percent. The agreement includes another $300m if certain regulatory milestones are reached. The deal is subject to approval from the stockholders of Chinook and regulatory clearances and will conclude in the second half of 2023. The transaction has been unanimously approved by the boards of directors of both companies.

The deal is a merger of a newly formed subsidiary of Novartis with Chinook, which has two late-stage medicines currently under development to treat IgA nephropathy (IgAN), a rare, progressive chronic kidney disease.

Novartis is pursuing Chinook to take control of two late-stage drug candidates. The most advanced of the assets is atrasentan, an oral endothelin A receptor antagonist that Chinook picked up from AbbVie in 2019 in a deal worth up to $135m in milestones.

“IgA Nephropathy is a devastating disease mostly affecting young adults and potentially leading to dialysis or kidney transplantation,” said Vas Narasimhan, chief executive of Novartis. “We are excited by this unique opportunity to address one of society’s most challenging healthcare issues, with the potential to bring additional much-needed treatment options to patients. We look forward to closing the deal, to a smooth transition for Chinook employees and to welcoming them to Novartis.”

“We are pleased that Novartis recognizes the significant value that the Chinook team has built with our pipeline of clinical and preclinical programs for patients with rare, severe chronic kidney diseases,” said Eric Dobmeier, president and chief executive of Chinook Therapeutics. “We believe this transaction is great news for kidney disease patients and the programs we have built at Chinook. Through this merger, Novartis can apply its substantial resources to pursue broader development efforts and commercialization of atrasentan, zigakibart (BION-1301) and other programs in our pipeline to build its global renal therapeutic area.”

News: Novartis to buy Chinook for up to $3.5 bln in boost to late-stage pipeline

Data centre operator Cyxtera files for Chapter 11

BY Fraser Tennant

In a bid to put itself on a more solid financial footing, data centre operator Cyxtera Technologies Inc. and certain of its subsidiaries has filed for Chapter 11 bankruptcy protection.

Cyxtera’s bankruptcy filing – which does not include its subsidiaries in Germany, Singapore and the UK – is pursuant to a previously disclosed restructuring support agreement (RSA) it reached with certain of its lenders holding over two-thirds of its outstanding term loan.

The company expects to use the Chapter 11 process to strengthen its financial position, meaningfully deleverage its balance sheet and facilitate the business’s long-term success.

In addition, Cyxtera has received a commitment for $200m in debtor-in-possession (DIP) financing from certain of the term lenders, which is convertible into an exit facility upon the company's emergence from the court-supervised process. This new financing is expected to provide sufficient liquidity to support Cyxtera during this process and beyond.

“We have thoroughly evaluated options to enhance value for the company and our stakeholders,” said Nelson Fonseca, chief executive of Cyxtera. “Together with our lenders, we determined that initiating this process is the best path forward for Cyxtera and our stakeholders as we pursue new opportunities for growth.

“We appreciate the significant support from our lenders, which will enable us to move through this process as quickly as possible,” he continued. “We are confident these steps will enable us to position our business for the long term as we continue serving our customers with innovative services and the highest levels of support.”

A global leader in colocation and interconnection services, with a footprint of more than 60 data centres in over 30 markets, Cyxtera provides more than 2300 enterprise and government customers with the technology solutions they need to scale faster, achieve financial goals and gain a competitive advantage.

“Our recent business momentum and the high demand for our global data centre platform are a testament to the hard work and commitment of our team, as well as to the continued support of our customers and business partners,” concluded Mr Fonseca. “We look forward to emerging from this process as a stronger organisation with additional financial flexibility to drive Cyxtera’s next phase of growth.”

News: Data-center operator Cyxtera files for bankruptcy

CIRCOR taken private in $1.6bn deal

BY Richard Summerfield

Private equity giant KKR & Co has agreed to take industrial machinery maker CIRCOR International Inc private in a deal worth $1.6bn.

Under the terms of the agreement, KKR will pay $49 per share, a premium of nearly 55 percent to CIRCO’s last closing stock price on Friday 2 June.

CIRCOR’s board has unanimously approved the transaction and recommended that shareholders vote in its favour. The deal is expected to close in the fourth quarter of 2023, subject to the receipt of approval from the company’s shareholders and certain required regulatory approvals, as well as the satisfaction of other customary closing conditions. Upon completion, CIRCOR will be a privately held company wholly owned by KKR’s investment funds and will no longer have its common stock listed on any public market.

“Our agreement with KKR marks the successful culmination of a strategic review process conducted by the Board, supported by external advisors and the management team,” said Helmuth Ludwig, chair of the board of CIRCOR. “As part of our comprehensive strategic review, initiated in March 2022, we engaged in extensive dialogue with a number of parties that expressed interest in acquiring all or parts of the Company. We believe that this transaction and the immediate cash value it will provide to CIRCOR’s stockholders best achieves the Board’s goal of unlocking the significant incremental value within CIRCOR for its stockholders. This transaction is a testament to the dedication of CIRCOR’s talented team and we are grateful for their tireless efforts and commitment to making CIRCOR an industry leader.”

“This transaction will create significant value to our stockholders, reflecting the dedication of our team in executing on our strategic priorities, the strength of our family of brands and the deep relationships we have built with our customers,” said Tony Najjar, president and chief executive of CIRCOR. “We believe that having the support and resources of an experienced investor like KKR will help us expand our presence in the flow control space and support our mission to deliver the highest-quality products and services to our customers, many of which play a critical role in protecting national security.”

“CIRCOR stands out as an innovative and trusted solution provider, manufacturing mission-critical flow control products for industrials, aerospace and defense customers,” said Josh Weisenbeck, a partner at KKR. “We believe the Company is in a strong position to grow and benefit from the attractive tailwinds in those markets. We look forward to working closely with Tony and his talented team to drive further growth and value through new product development, aftermarket expansion, strategic acquisitions and allowing all CIRCOR employees to have the opportunity to participate in the benefits of ownership of the Company.”

CIRCOR has around 3100 employees and manufactures pump and valve systems for sectors including oil & gas, industrial, aerospace and defence.

News: KKR to take machinery maker Circor private in $1.6-bln deal