Canada-based Precision Drilling Corp. said Oct. 5 that it has agreed to purchase Trinidad Drilling Ltd. for C$1.03 billion, including the assumption of C$477 million in Trinidad net debt.

Precision has offered 0.445 share of Precision for each outstanding Trinidad share. Upon completion of the transaction, existing holders of Trinidad shares will collectively own approximately 29% of Precision.

The merger is expected to generate $30 million in immediate synergies through fixed cost reductions, operational efficiencies and reduced public company costs, Precision's president and CFO Kevin Neveu said. Combined, the company will be the third-largest driller in the U.S. with a rig fleet that includes over 200 active rigs and 322 total rigs.

Both the boards of directors of Precision and Trinidad unanimously approved the transaction.

The transaction is expected to be completed later this year and is subject to approvals and customary closing conditions.

Upon closing, one of Trinidad's directors will be appointed to the Precision board, and one of Trinidad's directors will be nominated for election to the Precision board at the Precision shareholder meeting.

RBC Capital Markets is acting as financial adviser to Precision and Torys LLP is acting as Precision's legal adviser. TD Securities Inc. is acting as financial adviser to Trinidad, and Blake Cassels & Graydon LLP is acting as Trinidad's legal adviser.