Houston-based C&J Energy Services is merging its operations with the completion and production business of Nabors Industries in a $2.86 billion deal.
The combined company will operate the largest fluids management fleet and the second largest workover/well-servicing fleet in North America, and will also provide cementing services.
The deal will effectively triple C&J's stimulation fleet, good for fifth biggest in North America.
C&J founder and chief executive Josh Comstock said the deal "will allow us to leapfrog most of our peers".
Comstock also trumpeted the potential for C&J to "seize on international growth opportunities" in places like Saudi Arabia and elsewhere that Nabors is active, as well as in every major North American shale basin.
Nabors chief executive Anthony Petrello said his company has operations in 24 countries and said their relationship with several national oil companies will help C&J grow.
Petrello called C&J "the best operator out there" in the completion and production space. Its in-house manufacturing capability made it a particularly attractive partner, Petrello said.
"I view the creation of this new company as a formidable player which will meaningfully enhance shareholder value for each company," Petrello said in a statement.
Under the deal, C&J will pay Nabors total consideration of $2.86 billion, comprised of shares and about $940 million in cash. Nabors will own 53% of the combined company, which will be headquartered in Bermuda with corporate offices in Houston.
Citi, which advised C&J on the deal, will finance the cash portion of the transaction.
The combined company will have 1.2 million hydraulic horsepower in pressure pumping capacity across the US, as well as 683 workover rigs and 1500 fluid management trucks. It will boast 10,000 employees across US and Canada.
Executives pointed out that the two companies have very little overlap in the customer base. The merger is expected to be accretive to earnings in the first full year of combined operations.
C&J shares were up 8.20% in after-market trade on the NYSE after closing the day up 3.70% on $32.81.