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Business Combinations (Tables) | 6 Months Ended
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Jun. 30, 2024
Business Combinations [Abstract] |
Schedule of Fair Value of Consideration Transferred | The total fair value of the consideration transferred was determined as follows (in thousands, except stock price):
Shares of our common stock issued to Ulterra | 34,900
Our common stock price on August 14, 2023 | $ | 14.94 |
Common stock equity consideration | $ | 521,406 |
Plus net cash consideration (1) | 373,447 |
Total consideration transferred | $ | 894,853 |
(1)Net cash consideration included $370 million ca sh consideration as adjusted for customary purchase price adjustments set forth in the Ulterra merger agreement relating to cash, net working capital, indebtedness and transaction expenses of Ulterra as of the closing. The total fair value of the consideration transferred was determined as follows (in thousands, except exchange ratio and stock price):
Number of shares of NexTier common stock outstanding as of September 1, 2023 | 228,846
Multiplied by the exchange ratio | 0.752
Number of shares of Patterson-UTI Energy, Inc. common stock issued in connection with the merger | 172,092
Patterson-UTI Energy, Inc. common stock price on September 1, 2023 | $ | 14.91 |
Common stock equity consideration | 2,565,895 |
Acceleration of RSU awards | 1,997 |
Fair value of replacement equity awards (1) | 70,416 |
NexTier long-term debt repaid by Patterson-UTI Energy, Inc. | 161,000 |
Consideration transferred | $ | 2,799,308 |
(1)In connection with the merger, each of the share-based awards held by legacy NexTier employees were replaced with our share-based awards on the merger date. The fair value of the replacement awards has been allocated between each employee’s pre-combination and post-combination services. Amounts allocated to pre-combination services have been included as consideration transferred as part of the merger. See Note 12 for replacement awards details.
Schedule of Total Purchase Price of Assets Acquired and Liabilities Assumed Based on Fair Value | The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition:
Assets acquired: |
Cash and cash equivalents | $ | 18,426 |
Accounts receivable | 68,467 |
Inventory (1) | 36,313 |
Rental equipment (2) | 109,055 |
Property and equipment | 27,583 |
Intangible assets | 313,000 |
Operating lease right of use asset | 7,513 |
Finance lease right of use asset | 5,228 |
Other assets | 15,989 |
Total assets acquired | 601,574 |
Liabilities assumed: |
Accounts payable | 23,258 |
Accrued liabilities | 33,323 |
Operating lease liability | 7,513 |
Finance lease liability | 5,228 |
Deferred tax liabilities | 83,993 |
Total liabilities assumed | 153,315 |
Less: noncontrolling interest | (8,729) |
Net assets acquired | 439,530 |
Goodwill | 455,323 |
Total consideration transferred | $ | 894,853 |
(1)We recorded an adjustment of $5.5 million to write-up acquired drill bits classified as inventory to estimated fair value. This adjustment will be recorded as direct operating expense as acquired drill bits are sold. (2)We recorded an adjustment of $74.4 million to write-up acquired drill bits classified as long-lived assets to estimated fair value. This adjustment will be depreciated as acquired drill bits are rented over a weighted-average estimated useful life of 7.5 runs. The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of the merger:
Assets acquired: |
Cash and cash equivalents | $ | 95,815 |
Accounts receivable | 420,200 |
Inventory | 71,930 |
Property and equipment (1) | 1,045,610 |
Intangible assets | 768,000 |
Operating lease right of use asset | 19,091 |
Finance lease right of use asset | 50,733 |
Other assets | 84,677 |
Total assets acquired | 2,556,056 |
Liabilities assumed: |
Accounts payable | 358,873 |
Accrued liabilities | 129,535 |
Operating lease liability | 19,091 |
Finance lease liability | 50,733 |
Deferred tax liabilities | 86,293 |
Long-term debt | 22,533 |
Other liabilities | 11,815 |
Total liabilities assumed | 678,873 |
Net assets acquired | 1,877,183 |
Goodwill | 922,125 |
Total consideration transferred | $ | 2,799,308 |
(1)We recorded an adjustment of $263 million to write-up acquired property and equipment to estimated fair value. This adjustment will be depreciated on a straight-line basis over a weighted average period of six years.

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- Definition Tabular disclosure of a material business combination completed during the period, including background, timing, and recognized assets and liabilities. This table does not include leveraged buyouts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479328/805-10-50-3 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479328/805-10-50-2 + Details
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- Definition Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Paragraph 1 -Section 50 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-1 + Details
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