CALGARY, ALBERTA -- (Marketwired) -- 05/13/13 -- Wenzel Downhole Tools Ltd. ("Wenzel" or the "Company") (TSX: WZL) is pleased to announce that Wenzel, Basin Tools L.P. ("Basin Tools") and 1748017 Alberta Limited (the "Purchaser"), an indirect wholly-owned subsidiary of Basin Tools, have entered into an arrangement agreement dated May 13, 2013 (the "Arrangement Agreement"), pursuant to which the Purchaser will acquire all of the issued and outstanding common shares of Wenzel (the "Common Shares") not owned by Basin Tools by way of a plan of arrangement under the Business Corporations Act (Alberta) (the "Arrangement").
Each Wenzel shareholder will receive CDN$2.25 in exchange for each Common Share held (the "Cash Consideration"). The Cash Consideration represents a 30.8% premium to the last three months' volume weighted average trading price of the Common Shares on the Toronto Stock Exchange.
The transaction is valued at approximately CDN$98.80 million, including the assumption of net debt (approximately CDN$15.76 million as of March 31, 2013), as well as the value of the Common Shares and preferred shares of the Company (the "Preferred Shares") already owned by Basin Tools.
The board of directors of Wenzel, following receipt and review of a unanimous recommendation by a special committee of independent directors (the "Special Committee"), and with nominees from Basin Tools abstaining, has unanimously determined that the Cash Consideration is fair and that the Arrangement is in the best interests of the Company and recommends that shareholders vote in favour of the Arrangement. Raymond James Ltd. has provided the Special Committee with a verbal opinion that the Cash Consideration under the Arrangement is fair, from a financial point of view, to Wenzel shareholders, excluding Basin Tools. Raymond James Ltd. has also been retained to provide a formal valuation of the Common Shares to the Special Committee in accordance with Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions, which will be included in an information circular to be mailed to Wenzel shareholders.
Basin Tools currently holds 8,587,473 Common Shares and 4,600,000 Preferred Shares, which are convertible into Common Shares on a one-for-one basis, or approximately 37% of the Company's total shares issued and outstanding.
The Purchaser has entered into voting support agreements with the directors and senior officers of the Company to vote in favour of the Arrangement.
The Arrangement is subject to approval by the Court of Queen's Bench of Alberta, and approval of a special majority of at least 66 2/3% of the holders of Common Shares, Preferred Shares and options to purchase Common Shares voting as a single class, as well as a simple majority of shareholders excluding Basin Tools, at a special meeting of shareholders of Wenzel to approve the transaction (the "Special Meeting"). The transaction is also subject to customary closing conditions and the arrangement of suitable financing at the discretion of Basin Tools.
The Special Meeting is expected to be held in July of 2013. An information circular is expected to be mailed to Wenzel shareholders in June.
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