H & H Oil Tool Co., a Santa Paula firm that rents drilling and production equipment to the oil and gas industries, has agreed to be acquired by Weatherford International Inc. in a stock swap valued at about $28 million.
Houston-based Weatherford provides services, products, and specialized rental and fishing tools to the energy industry. The company had 1993 revenue of $314.7 million. H & H, which operates primarily in California and the Rocky Mountains, had 1993 revenue of $21.7 million.
Upon news of the deal last week, H & H’s stock surged 50% on very heavy trading, to $7.50 per share.
The merger agreement calls for a tax-free pooling of interests under which 2.6 million shares of Weatherford common stock would be exchanged for all the outstanding shares of H & H common stock. The exchange ratio will be 0.789 Weatherford shares for each H & H share. The merger is subject to creation of a definitive agreement and approval by H & H shareholders, the company’s board, lenders and regulatory agencies.
The merger is expected to be completed in early September. The existing letter of intent will terminate, however, if a definitive agreement hasn’t been reached by June 30.