Aberdeen-based drilling and engineering contractor KCA Deutag (KCAD) said it agreed with the shareholders of Dalma Energy LLC to combine their respective businesses through the acquisition by KCAD of Dalma’s Omani and Saudi Arabian businesses for about $660 million.

“Consideration for the acquisition, based upon an enterprise valuation of $660 million, will consist of $100 million of cash and shares to be issued to Dalma’s shareholders valued at $220 million,” said KCAD.

KCAD said it had revenue of more than $1.16 billion and EBITDA of $219 million-$224 million in the year ending December 31, 2017.

KCAD said the Dalma businesses involved had revenue of $312 million and EBITDA of $110 million for the year ending December 31, 2017.

Upon completion, the KCAD group as enlarged by the Dalma businesses will continue to operate under the KCA Deutag brand name and will have 9,700 employees.

Norrie McKay, CEO of KCAD, said: “The acquisition of Dalma’s operations in Saudi Arabia and Oman will significantly strengthen our foothold in the Middle East, and provide us with a stronger platform to develop and grow our business in what is an exceptionally attractive region.

“Dalma’s operations are an excellent strategic fit, not only consolidating our position in Oman as the country’s leading owner and operator of onshore drilling rigs but also enabling us to offer our operational expertise in the substantial Saudi Arabian onshore drilling market, which has been a key target for KCAD.”

Under the terms of the agreement, Dalma’s shareholders will receive $100 million in cash and an equity shareholding of 22% in the Enlarged KCAD Group, valued at $220 million.

“The Enlarged KCAD Group expects to keep KCAD’s existing financing in place and finalise $425 million of financing for the acquisition, which may include raising new debt in the loan or bond markets and/or amendments/extensions to existing financing,” said KCAD.