By the OGJ Online Staff
HOUSTON, Feb. 21 -- Service company BJ Services Co., Houston, plans to acquire rival Osca Inc., Lafayette, La., a provider of oil and gas well completion fluids, completion services, and downhole completion tools, for $420 million.
The proposed acquisition has the support of Great Lakes Chemical Corp., Indianapolis, which owns 53% of Osca.
BJ Services CEO J.W. Stewart said, "BJ has stated its objective to increase its presence in the global completion tool business. Osca's technically advanced offering of completion tools combined with BJ's extensive geographic market presence provides an attractive opportunity for expansion of this product line."
Stewart said BJ Services believes it can achieve up to $20 million in cost savings after the companies are combined. The deal is expected to be accretive to earnings in 2003.
James K. Wicklund, a managing director of energy research at Banc of America Securities in Houston, said, "BJ Services paid a full price, but they got a very good company. I'm very positive on the deal."
Osca has a stronger tool business and also is stronger in the deepwater Gulf of Mexico than is BJ Services, Wicklund said, adding that BJ Services has a stronger market share of shallow drilling business and is stronger in its onshore business than Ocsa was.
"Now you can push Osca's tool technology through BJ Services's land infrastructure and reap much more benefit at much less cost," than the two companies could have achieved as separate companies, Wicklund said