Total Energy Services Inc said it agreed to buy the oilfield services, rental and transportation business of privately held DC Energy Services Inc for C$44.5 million ($42.4 million), to expand in western Canada.
Total said it will pay C$32 million in cash and C$12.5 million in convertible unsecured debentures to the Alberta-based company.
Total plans to fund the cash portion of the deal from its existing C$65 million credit facilities.
When completed, the acquisition is expected to significantly increase Total's presence in the drilling, completions and production rentals market in Western Canada, it said.
The acquisition is also expected to provide Total with a platform to expand its operations outside of western Canada, notably Alaska, the company said in a statement.
Total said it will employ substantially all of DC Energy's 135 employees
Total said the combination of DC Energy's business with its existing rental and transportation business is expected to provide a minimum of $2 million of incremental EBITDA for 2010 financial year.
Total shares were up 1 percent at C$4.65 Tuesday on the Toronto Stock Exchange. ($1=1.049 Canadian Dollar) (Reporting by Isheeta Sanghi in Bangalore; Editing by Gopakumar Warrier)