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Parker Acquisition | 6 Months Ended
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Jun. 30, 2025
Parker Acquisition |
Parker Acquisition | ​ Note 3 Parker Acquisition ​ As discussed in Note 2—Summary of Significant Accounting Policies, on March 11, 2025, we completed the Parker acquisition. Total consideration for the acquisition included cash consideration of $0.6 million and the issuance of 4.8 million shares of our common stock, which based on the closing price of our common stock of $37.50 on March 11, 2025, valued the purchase price consideration of the transaction at approximately $180.6 million. ​ The acquisition has been accounted for as a business combination using the acquisition method. Under the acquisition method of accounting, the fair value of the consideration transferred is allocated to the tangible and intangible assets acquired and the liabilities assumed based on their estimated fair values as of the acquisition date. The fair value of the net assets acquired amounted to approximately $297.1 million at the date of acquisition, and as a result, we recorded a gain of $116.5 million related to the excess of the fair value of the net assets acquired over the acquisition price. The excess is referred to as a “bargain purchase gain.” This bargain purchase gain indicated that the fair value of the net assets acquired (which represents the price at which the assets would be exchanged between a willing buyer and seller) was in excess of the amount for which we acquired such net assets. Before recognizing the bargain purchase gain, we reassessed the methods used in the acquisition accounting and verified that we had identified all of the assets acquired and all of the liabilities assumed, and that there were no additional assets or liabilities to be considered. We also reassessed the process used to measure amounts recognized on the closing date of the merger to ensure that the measurements reflected all consideration transferred based on available information. ​ The bargain purchase gain was due to the decrease in the share price of our stock from the date the merger agreement was signed, to the closing date while the agreed upon purchase price of 4.8 million of our common shares, as stipulated in the merger agreement, remained the same. On October 14, 2024, the date the merger agreement was signed, and on March 11, 2025, the closing date of the merger, the closing prices of our common stock were $77.52 and $37.50, respectively. Pursuant to the merger agreement, the precise number of shares to be issued to Parker stockholders was determined based upon the volume weighted average price of Nabors common shares on the NYSE for the 15 trading days ending the fifth day before the closing of the merger (“Closing Price”) and, if that Closing Price was below $42.70, Parker stockholders would also receive a cash component as consideration for their shares of Parker stock. This resulted in a $0.6 million aggregate cash payment. ​ The aggregate purchase price noted above was allocated to the major categories of assets acquired and liabilities assumed based on preliminary estimated fair values as of the date of the business combination. We applied significant judgement in estimating the fair value of assets acquired and liabilities assumed. The carrying amounts of cash and cash equivalents, accounts receivable, other assets, accounts payable and accrued liabilities approximate their fair values due to their nature or the short-term maturity of instruments. The fair value of property and equipment was determined using the cost approach which includes assumptions related to replacement cost, physical deterioration, economic obsolescence, and scrap value. The remaining assets acquired and liabilities assumed are based on inputs that are not observable in the market and thus represent Level 3 inputs. Assessing the overall business enterprise value, which was compared to market multiples for market participants, involved the use of assumptions with respect to future rig counts, operation and capital cost estimates and a weighted average cost of capital reflecting the cost of capital for market participants. Certain data necessary to complete the purchase price allocation is not yet available, including final tax returns that provide the underlying tax basis of Parker’s assets and liabilities. We will complete the purchase price allocation during the 12-month period following the acquisition date. ​ We recorded the preliminary allocation of the purchase price consideration during the three months ended March 31, 2025. During the three months ended June 30, 2025, the Company recorded a measurement period adjustment which resulted in a decrease in property, plant and equipment, an increase in net lease assets and an increase in bargain purchase gain of $3.5 million. The adjustment primarily related to additional information obtained about facts and circumstances that existed as of the acquisition date. ​ The table below presents the allocation of the estimated fair value of identifiable assets acquired and liabilities assumed, and the resulting gain on bargain purchase as of the closing date: ​
​ | ​ | ​ | ​ | ​
​ |  | Fair Value |
(In thousands) | ​ | at Acquisition |
Assets: | ​ | ​ | ​ | ​
Cash and cash equivalents | ​ | $ | 84,995 | ​
Accounts receivable | ​ |  | 132,084 | ​
Inventory | ​ |  | 4,576 | ​
Other current assets | ​ |  | 37,664 | ​
Property, plant and equipment | ​ |  | 264,500 | ​
Deferred income taxes | ​ |  | 66,828 | ​
Other assets | ​ |  | 43,910 | ​
Total assets acquired | ​ | ​ | 634,557 | ​
​ | ​ | ​ | ​ | ​
Liabilities: | ​ | ​ | ​ | ​
Trade accounts payable | ​ | $ | 43,774 | ​
Accrued liabilities | ​ | ​ | 66,808 | ​
Income taxes payable | ​ | ​ | 4,027 | ​
Other short-term liabilities | ​ | ​ | 6,462 | ​
Long-term debt | ​ | ​ | 177,755 | ​
Deferred income taxes | ​ | ​ | 2,594 | ​
Other liabilities | ​ | ​ | 36,076 | ​
Total liabilities assumed | ​ | ​ | 337,496 | ​
Net assets acquired | ​ | ​ | 297,061 | ​
Gain on bargain purchase | ​ | ​ | 116,499 | ​
Total consideration transferred | ​ | $ | 180,562 | ​
​ Approximately $177.4 million of revenue and $22.5 million of net income attributable to Parker are included in the consolidated statements of operations for the period from the closing date on March 12, 2025 through June 30, 2025. During the three and six months ended June 30, 2025, we incurred costs related to the Parker acquisition totaling $1.9 million and $19.1 million, which are included in Other, net in our consolidated statements of income (loss), respectively. ​ Pro Forma ​ The following pro forma condensed combined financial information was derived from our and Parker’s historical financial statements and gives effect to the acquisition as if it had occurred on January 1, 2024. The below information reflects pro forma adjustments based on available information and certain assumptions we believe are reasonable, including the estimated tax impact of the pro forma adjustments. ​ The pro forma results of operations do not include any anticipated cost savings or other synergies that may result from the Parker acquisition nor do they include any estimated costs that will be incurred to integrate Parker operations. The pro forma results of operations include our merger and acquisition expenses of $25.9 million as if they had been incurred in the first quarter of 2024. ​ The pro forma condensed combined financial information has been included for comparative purposes and is not necessarily indicative of the results that might have actually occurred had the Parker acquisition taken place on January 1, 2024. Furthermore, the financial information is not intended to be a projection of future results. The following table summarizes our selected financial information on a pro forma basis: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended |  | Six Months Ended
​ | ​ | June 30, |  | June 30,
​ |  | 2025 |  | 2024 |  | 2025 |  | 2024
​ | ​ | (In thousands)
Operating revenues | ​ | $ | 832,788 | ​ | $ | 890,346 | ​ | $ | 1,672,093 | ​ | $ | 1,784,985
Net income (loss) | ​ |  | (3,770) | ​ |  | 190 | ​ |  | (32,432) | ​ |  | 79,981
​

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