SHLF: Recommended offer by ADES International Holding, Ltd. to acquire all outstanding shares of Shelf Drilling, Ltd. by way of a cash merger

05 Aug 2025 07:21 CEST

SHLF: Recommended offer by ADES International Holding, Ltd. to acquire all
outstanding shares of Shelf Drilling, Ltd. by way of a cash merger

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WOULD BE UNLAWFUL OR REQUIRE PRIOR APPROVAL

5 August 2025

ADES International Holding, Ltd. (“ADES”), a subsidiary of ADES Holding Company,
and Shelf Drilling, Ltd. (“Shelf Drilling” or the “Company”) are pleased to
announce that today they have signed an agreement (the “Transaction Agreement”)
for a recommended offer by ADES to acquire all issued and outstanding shares of
the Company by way of cash merger under the laws of the Cayman Islands between
ADES International Cayman (“BidCo”), a wholly owned subsidiary of ADES, and the
Company. At completion, all of the Company's shares will be cancelled for a
consideration in cash of NOK 14.00 per share (the "Cash Consideration") to the
Shelf Drilling shareholders pursuant to a plan of merger entered into between
the Company, ADES and BidCo (the "Transaction"). Following completion of the
Transaction, Shelf Drilling will be wholly owned by ADES, and Shelf Drilling,
Ltd. will be delisted from the Oslo Stock Exchange.

The Transaction is approved and recommended by the board of directors of Shelf
Drilling who, as part of its evaluation, has received a fairness opinion from
Evercore concluding that the proposed Cash Consideration represents fair value
for the Shelf Drilling shareholders. In addition, the Transaction is supported
with irrevocable commitments to vote in favor of the Transaction at an
extraordinary general meeting of the Company provided by shareholders Castle
Harlan and Perestroika as well as the Company’s CEO and CFO, and board members,
together holding 15.0% of the outstanding shares in the Company.

Transaction rationale
• Establishes a strong global player in shallow-water drilling with a
substantial fleet of 83 offshore jack-ups (including 46 premium units),
following the addition of 33 jack-ups and entry into new regions through the
Transaction
• Forms the go-to partner for shallow-water drilling customers across the
world’s most attractive basins backed by decades of experience and a shared
commitment to safety and performance
• Brings together complementary customer bases, assets and organizations
• Total combined backlog of US$ 9.45billion (as of 30 June 2025) provides strong
cash-flow visibility
• ADES expects to realize annual operational cost synergies of US$ 40-50 million
with gradual realization over the medium term, along with associated costs to
achieve these synergies
• ADES will seek to optimize the enlarged group’s capital structure, efficiency
and cost based on the strength of the combined balance sheets and cash flows. As
such, ADES will settle Shelf Drilling’s existing debt obligations
• The Transaction is accretive to earnings per share and free cash flow for
ADES, supporting strong returns for shareholders



Key transaction terms
• The Cash Consideration of NOK 14.00 per Shelf Drilling share corresponds to a
fully diluted equity value of Shelf Drilling of approximately NOK 3.9 billion
(approximately US$ 0.4 billion), and represents a premium of:
o 62% to the Shelf Drilling closing price of NOK 8.64 on 4 August 2025
o 56% to the volume weighted average price of NOK 8.98 over the last 1 month up
to and including 4 August 2025
• The Transaction is expected to close in the fourth quarter of 2025 subject to
customary closing conditions (as further described below), including approval by
an extraordinary general meeting of Shelf Drilling's shareholders.
• Shelf Drilling’s outstanding US senior notes and Norwegian bond will be called
in conjunction with closing of the Transaction (total principal value of
approximately US$ 1.3 billion).
• The Transaction is to be financed through ADES’s available credit facility.

Quotes

Commenting on the Transaction, Dr. Mohamed Farouk, Chief Executive Officer of
ADES, said: "We are truly delighted to announce our acquisition of Shelf
Drilling. Over the past years we have unlocked new geographies and deepened our
strategic reach. With this landmark transaction, we reinforce our position as a
market leader in shallow-water offshore drilling, offering superior services to
our client base alongside enhanced scale, asset quality, and operational reach.
As part of the Transaction, we will add 33 jack-ups and a dedicated, experienced
workforce, supporting expansion into additional regions and further
strengthening our global footprint. The transaction is supported by Shelf
Drilling’s $1.5 billion firm backlog and $40-50 million of anticipated
operational cost synergies, enhancing our global reach, providing access to key
regions with solid growth prospects, and offering continuous value to our
shareholders.

Greg O’Brien, CEO of Shelf Drilling, said: “Today’s announcement delivers
immediate and compelling value to our shareholders, reflecting both the strength
of our business and the dedication of our employees. Over the past 13 years,
Shelf Drilling has built a resilient company with an outstanding safety track
record and a reputation for operational excellence. I would like to thank the
entire Shelf Drilling team for their exceptional contributions and commitment,
which have been instrumental in shaping who we are today. This transaction
unites two highly complementary organizations, and we are confident that the
combination will unlock the full strategic value of our global fleet and
operations. We look forward to working closely with the ADES team to ensure a
seamless and successful integration.”


Transaction structure and additional details
Pursuant to the Transaction Agreement and the plan of merger entered into
between the Company, ADES and Bidco, the Transaction is structured as an
acquisition by ADES of all issued and outstanding shares of Shelf Drilling
through a cash merger between BidCo and the Company, with the Company as the
surviving entity, under the laws of the Cayman Islands. At completion of the
Transaction, all shares issued by the Company will be cancelled against payment
of the Cash Consideration to the former Shelf Drilling shareholders, following
which Shelf Drilling will be wholly owned by ADES and the shares of Shelf
Drilling delisted from the Oslo Stock Exchange.

The Transaction requires the approval of the plan of merger at an extraordinary
general meeting in Shelf Drilling by the affirmative vote of 2/3rds (two-thirds)
of the votes cast on the resolution at the extraordinary general meeting. The
extraordinary general meeting will be convened separately and held mid-September
2025. The board of directors of the Company has resolved to recommend the
Company's shareholders to vote in favor of the Transaction.

Completion of the Transaction is otherwise conditional upon fulfilment of
certain customary closing conditions, including certain regulatory approvals
having been received and absence of any relevant legal restraints; no material
breach of the Transaction Agreement (subject to various materiality thresholds),
including any covenants and representations thereunder, having occurred; the
Company having obtained certain change of control consents; and no event having
occurred which has, or could reasonably be expected to have, a material adverse
effect on the prospects, financial condition, assets, results of operations or
business of the Company and its subsidiaries taken as a whole.

The Company will in conjunction with and as a condition for completion of the
Transaction issue call notices for the USD 1,095 million 5.5-years senior
secured notes issued by Shelf Drilling Holdings, Ltd. (ISIN US822538AH74 and
USG23618AG91) and the USD 315 million 4.5-years senior secured first lien bonds
issued by Shelf Drilling (North Sea) Holdings, Ltd. (ISIN NO0013220285) and
pursuant to the respective terms thereof.




Advisors
SpareBank 1 Markets is acting as sole financial advisor and Schjødt and Maples
Group are acting as legal advisors to ADES. Evercore is acting as sole financial
advisor and Advokatfirmaet Thommessen AS, Conyers and Latham & Watkins LLP are
acting as legal advisors to Shelf Drilling.


Contact information:

ADES:
Hussein Badawy
CFO
Email: hussein.badawy@adesgroup.com

Shelf Drilling:
Douglas Stewart
CFO
Email: douglas.stewart@shelfdrilling.com


About ADES:
ADES Holding Company, headquartered in Al Khobar in the Kingdom of Saudi Arabia,
is a global drilling services provider. ADES has over 8,000 employees and a
fleet of 90 rigs across 13 countries, including 40 onshore drilling rigs, 48
jack-up offshore drilling rigs, one jack-up barge, and one mobile offshore
production unit (“MOPU”).

For more information, visit https://investors.adesgroup.com/
For investor relation inquiries, please contact:
investor.relations@adesgroup.com

About Shelf Drilling:
Shelf Drilling is an international shallow water offshore drilling contractor
with rig operations across the Middle East, Southeast Asia, India, West Africa,
the Mediterranean and the North Sea. Shelf Drilling was founded in 2012 and has
established a strong reputation within its industry for its fit-for-purpose
strategy and close working relationship with industry leading clients. The
Company is incorporated under the laws of the Cayman Islands with corporate
headquarters in Dubai, United Arab Emirates. The Company is listed on the Oslo
Stock Exchange under the ticker “SHLF”.

Additional information about Shelf Drilling can be found at
www.shelfdrilling.com.


Important notices

This announcement is not and does not form a part of any offer to sell, or
solicitation of an offer to purchase, any securities. The distribution of this
announcement and other information may be restricted by law in certain
jurisdictions. Copies of this announcement are not being made and may
not be distributed or sent into any jurisdiction in which such distribution
would be unlawful or would require registration or other measures. Persons into
whose possession this announcement or such other information should come are
required to inform themselves about and to observe any such restrictions.

Matters discussed in this announcement may constitute forward-looking
statements. Forward-looking statements are statements that are not historical
facts and may be identified by words such as "believe", "expect", "anticipate",
"strategy", "intends", "estimate", "will", "may", "continue", "should" and
similar expressions. The forward-looking statements in this release are based
upon various assumptions, many of which are based, in turn, upon further
assumptions. Although the parties believe that these assumptions were reasonable
when made, these assumptions are inherently subject to significant known and
unknown risks, uncertainties, contingencies and other important factors which
are difficult or impossible to predict and are beyond its control. Actual events
may differ significantly from any anticipated development due to a number of
factors.

The information, opinions and forward-looking statements contained in this
announcement speak only as at its date, and are subject to change without
notice. The parties do not undertake any obligation to review, update, confirm,
or to release publicly any revisions to any forward-looking statements to
reflect events that occur or circumstances that arise in relation to the content
of this announcement.

This announcement is for information purposes only and is not to be relied upon
in substitution for the exercise of independent judgment. It is not intended as
investment advice and under no circumstances is it to be used or considered as
an offer to sell, or a solicitation of an offer to buy any securities or a
recommendation to buy or sell any securities.

The announcement has not been reviewed or approved by any regulatory or
supervisory authority.

The announcement contains financial information which may not have been audited,
reviewed or verified by any independent accounting firm. The inclusion of such
financial information shall not constitute a representation or warranty by any
person as to the accuracy or completeness of such information and shall not be
relied upon when making an investment decision.

This information is considered to be inside information pursuant to the EU
Market Abuse Regulation and is subject to the disclosure requirements pursuant
to Section 5-12 the Norwegian Securities Trading Act. This stock exchange
announcement was published by Prerna Nandwani, Corporate Communications Senior
Manager at Shelf Drilling, on 5 August 2025 at 07:20 CEST.

More information:
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