Prosafe has signed a deal to acquire Bermuda-based Floatel International to create the “world’s largest” offshore accommodation company.
Bosses said it comes amid a “well known” need for consolidation in the market which is facing overcapacity.
The deal will see the Norwegian firm take over the Bermuda-based company, while Floatel’s shareholders will become large shareholders in Prosafe.
The value of the deal, which will see the new company named Prosafe SE, has not been disclosed and it is subject to approval by UK and Norwegian competition authorities.
Prosafe said the acquisition is driven by the oil price drop which has led to lower activity, extensive efficiency improvements and “significantly intensified competition”.
The combined company will initially have the bulk of its activity in the North Sea and Brazil and the acquisition is to create a firm better equipped to compete in less mature regions where demand is growing.
Following the deal’s completion, Prosafe shareholders will own 55% of the firm, with Floatel shareholders owning 45%.
Prosafe said the combined firm had revenues of more than $600m (£472.3m) for 2018 and earnings before interest, tax, depreciation and amortisation of more than $300m (£236m).
The deal is expected to be completed by the end of Q3 this year.
Prosafe chairman Glen Rodland said: “The need for consolidation in oil services is well known. We consider this transaction not only strategically sound, but also necessary to adapt to the significant changes in our markets and competitive landscape in recent years.
“2014 was a paradigm shift that triggered an unprecedented downturn and lasting changes in the oil industry.
“We also face far tougher competition than before, due to a considerable overcapacity of both drilling rigs and supply vessels that are now being used as temporary accommodation.
“A combination of Prosafe and Floatel will also be able to offer a better product to the customers, through a more flexible and geographically diversified fleet. We will to a greater extent offer the right capacity at the right time in all central regions for offshore oil and gas.”