Precision Drilling Corporation (TSX:PD) entered into an arrangement agreement to acquire Trinidad Drilling Ltd. (TSX:TDG) for approximately CAD 560 million on October 5, 2018. Under the terms of the transaction, Precision is offering 0.445 of a Precision Share for each of the issued and outstanding common shares of Trinidad and will be assuming approximately CAD 480 million debt of Trinidad. The Trinidad Stock Appreciation Rights (“SAR”) holders having exercise price that is less than the Trinidad market price shall surrender such options for cancellation and will receive an amount equal to the amount by which the Trinidad Market Price exceeds the exercise price payable in Trinidad Shares, with the number of Trinidad Shares issuable in payment thereof being equal to the In-the Money Amount of such Trinidad SARs. Upon completion of the transaction, Trinidad's shareholders will own approximately 29% stake of the combined entity and Precision's shareholders will own 71% stake. The transaction represents a premium of 25% to the all-cash CAD 1.68 per share hostile take-over offer from Ensign Energy Services Inc. launched on August 30, 2018. Post completion, the combined entity will operate under the Precision name. The transaction provides for a non-completion fee of CAD 20 million payable by Trinidad in certain circumstances if the transaction is not completed. Upon completion, one of Trinidad's current Directors will be appointed to the Precision's Board, and one of Trinidad's current Directors will be nominated for election to the Precision's Board with such appointment and election to be effective upon closing of the transaction.

The transaction is subject to the approval by at least 66.67 % of Trinidad's shares and by the shareholders of Precision, approval by the Court of Queen's Bench as well as certain regulatory approvals including TSX approvals, competition approval, and other customary closing conditions. The issuance of the Precision's shares pursuant to the transaction will require approval by a simple majority of the Precision's shares. The Boards of Directors for Trinidad and Precision Drilling unanimously approved the transaction and recommended their shareholders to vote in favor of the transaction. All of the Directors and Senior Executive Officers of Trinidad and Precision have entered into agreements with Precision and Trinidad respectively, pursuant to which they have agreed to vote their Trinidad's shares in favor of the transaction. On October 31, 2018, FTC granted early termination of waiting period for the transaction. The waiting period under the Competition Act (Canada) expired on November 16, 2018. A special shareholders meeting of Trinidad and Precision is scheduled on December 11, 2018. As of November 22, 2018,   The Trinidad Board continues to believe that the Precision Transaction is the best available option for Trinidad shareholders and unanimously recommends that shareholders vote FOR the Precision Transaction at the special meeting of Trinidad securityholders. The Trinidad Board continues to recommend that shareholders do not tender to the inadequate all-cash Ensign Offer and REJECT the Ensign Offer by taking no action with respect to the Ensign Offer.  The transaction is expected to be completed in late 2018. Precision expects the transaction to be significantly accretive to 2019 and future cash flow per share metrics.

TD Securities Inc. acted as financial advisor and fairness opinion provider for Trinidad. Scott W.N. Clarke of Blake, Cassels & Graydon LLP acted as legal advisor for Trinidad. RBC Capital Markets acted as financial advisor and fairness opinion provider while Stephanie Stimpson and Mike Pedlow of Torys LLP acted as legal advisor to Precision. Computershare Trust Company Of Canada acted as transfer agent and depositary whereas Evolution Proxy, Inc. acted as proxy solicitor to Precision while D.F. King & Co., Inc. acted as proxy solicitor to Trinidad.