Nabors Industries' (NBR) SPAC Puts Shares for Public Sale
Nabors Industries Ltd. NBR announced that its newly-found special purpose acquisition company (“SPAC”), Nabors Energy Transition Corp., filed a registration statement with the Securities and Exchange Commission (“SEC”) regarding an initial public offering of its units in an effort to raise capital.
Notably, Nabors Energy, a subsidiary of Nabors Industries, aims to list its units on the New York Stock Exchange under the symbol “NETC”. Founded in 2021, the SPAC was created with the intention of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combinations with one or multiple businesses.
The SPAC plans to raise $250 million in the proposed offering through the sale of its units. It has registered with the SEC to offer 25 million units at $10 per unit, with each unit comprising a share of common stock and warrants to purchase more stock. At the proposed agreement value, the company would command a market value of $313 million.
Moreover, the SPAC expects to offer the underwriters an opportunity to purchase up to 15% more of the units in the public offering. Notably, Citigroup and Wells Fargo Securities are the joint book-running managers for the proposed offering.
Nabors Energy plans to focus on the energy transition, mainly alternative energy, energy storage and emissions reduction as well as carbon capture, utilization and sequestration. Also, it intends to prioritize Environment Social Governance (“ESG”) factors advancing the energy transition. Part of Nabors Industries, which collectively owns extensive experience in energy, technology, strategy, operations, marketing and finance, will be responsible for managing the SPAC.
However, the registration statement, which has been filed with the SEC, has not become effective yet. Moreover, the public filing cannot be ensured to result in any transaction or other action by Nabors Energy.
SPACs, often dubbed as blank-check companies, have disrupted the traditional IPO market. SPACs are flourishing in the market, helping start-ups to avoid the complexity and strenuous paperwork associated with the traditional IPO. The SPACs raise billions of dollars from private investors, with no specified investment targets or strategies.
Company Profile & Price Performance
Headquartered in Hamilton, Bermuda, Nabors Industries is one of the largest land-drilling contractors in the world, which is engaged in oil, gas and geothermal land drilling operations.
Shares of the company have underperformed the industry in the past six months. Its stock has gained 73.7% compared with the industry’s 104.9% growth.
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Zacks Rank & Stocks to Consider
The company currently carries a Zack Rank #3 (Hold).
Some better-ranked players in the energy space are Gulfport Energy Corporation GPORQ, Suncor Energy Inc. SU and Petrobras PBR, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rankstocks here.
Over the past 60 days, the Zacks Consensus Estimate for Gulfport Energy’s 2021 earnings has been raised by 1254.5%, while that for Suncor has been raised by 55.2%.
Petrobras’ earnings for 2021 are expected to increase 14.4% year over year.
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