Canadian oilfield services provider Trican Well Service Ltd. said March 22 it would buy smaller rival Canyon Services Group Inc. in a C$637 million deal, as it seeks to strengthen pricing power amid a revival in shale drilling in North America.

A more than 50% fall in global crude prices since 2014 has triggered a wave of consolidation in the oilfield services industry, which has been battered by a sharp drop in service prices.

Firms that supply frack crews, technological expertise and other services are now attempting to take back discounts extended during the slump, encouraged by a ramp up in shale drilling amid a crude oil recovery.

Brent has nearly doubled since hitting a multiyear low of $27.10 in January last year.

Both Trican and Canyon's available hydraulic fracturing capacities were fully booked and the companies had "increased visibility on strong activity through the third and fourth quarters of 2017," Trican CEO Dale Dusterhoft said March 22.

The combined company will have 675,000 hydraulic horsepower of available fracturing capacity and service bases across Western Canada.

The deal is valued at C$637 million (US$476 million) and includes about C$40 million in debt.

Canyon shareholders will receive 1.7 shares of Trican for each share they own. That translates to an offer price of C$6.63 per Canyon share, representing a 32% premium to the stock's close on March 21.

Trican shareholders are expected to own about 56% of the combined company, once the deal closes later this year, while Canyon shareholders will own the rest.

Trican said it expects to achieve about C$20 million in annual pre-tax savings once the companies are fully integrated next year.

RBC and Scotiabank were financial advisers to Trican while Blake, Cassels & Graydon LLP provided legal counsel.

Peters & Co. Ltd. was Canyon's financial adviser. Burnet, Duckworth & Palmer LLP was its legal adviser. (US$1 = C$1.3385)