Press release from Marketwire
Savanna Energy Services Corp. to Acquire 17 Service Rigs
Thursday, May 26, 2011
CALGARY, ALBERTA--(Marketwire - May 26, 2011) - Savanna Energy Services Corp. (TSX:SVY) ("Savanna") announced today that it has entered into a definitive arrangement agreement whereby Savanna will acquire all of the outstanding shares of Silverstar Well Servicing Ltd. ("Silverstar") for an aggregate purchase price, based on the volume weighted average share price of Savanna over the last 5 trading days, of approximately $39.6 million excluding acquired indebtedness (long term debt net of working capital) of approximately $5.5 million. If the transaction is completed, shareholders of Silverstar will receive, at their election: (i) 0.12834 of a Savanna common share per Silverstar share (subject aggregate maximum share consideration of 1,992,280 Savanna common shares); or (ii) $1.27579 cash per Silverstar share (subject to aggregate maximum cash consideration of $19,804,708) or (iii) a combination of (i) and (ii).
If the holders of Silverstar shares elect to receive an aggregate amount of cash or an aggregate number of Savanna common shares which exceeds the applicable maximums, the amount of cash and Savanna common shares to be received by a Silverstar shareholder shall be adjusted pro rata and the balance shall be paid in cash or Savanna common shares, as the case may be. Silverstar is a well servicing company operating throughout Alberta and British Columbia. The transaction will be effected by means of a court approved plan of arrangement.
The board of directors of Silverstar has considered the plan of arrangement and has determined that it is in the best interests of Silverstar and its shareholders. Completion of the plan of arrangement is subject to regulatory approval, court approval, the approval of the shareholders of Silverstar and other customary conditions. Shareholders of Silverstar will be asked to approve the transaction at a special meeting of shareholders of Silverstar expected to be held on or about July 7, 2011, but in any event no later than August 8, 2011. Silverstar shareholders representing approximately 51% have entered into agreements in the support of the transaction with Savanna. The plan of arrangement will require the affirmative approval by holders of two-thirds of the Silverstar shares that vote in person or by proxy at such meeting. Silverstar is expected to mail a management proxy circular to its shareholders in the middle of June, 2011 in respect of the meeting. This circular will contain important information regarding this proposed transaction.
The arrangement agreement prohibits Silverstar from soliciting or initiating any discussion regarding any other business combination or sale of material assets, contains provisions enabling Savanna to match competing, unsolicited proposals and, subject to certain conditions, provides for a termination fee payable by Silverstar of $1.5 million.
Upon completion of this transaction, Savanna will be adding 17 service rigs from Silverstar which will compliment both its existing service rig fleet and the recently announced proposed acquisition of Performance Services Ltd. Silverstar's fleet is comprised of 13, Class III heavy-duty, mobile, free-standing double workover rigs and 4 free-standing single workover rigs with an average age of less than 4 years old. The combined company's operational synergies will position it to capitalize on future organic growth and to make future complementary acquisitions based on the new look of its service division.
Savanna's service rig fleet will expand by 18 doubles and 15 singles with the acquisitions of both Performance and Silverstar taking the total service rig count to 101, which are located throughout Canada, the United States, and Australia. Savanna is confident this acquisition will continue to attract experienced, quality personnel to work for one of the largest, most modern service rig operators in western Canada.
Subject to receipt of all required approvals, the transaction is expected to be completed in July, 2011.
Savanna is a Canadian-based drilling and well servicing provider with operations in Canada, the United States and Australia, focused on providing fit-for-purpose equipment and technologies.
Cautionary Statement Regarding Forward-Looking Information and Statements
Certain statements and information contained in this press release may constitute forward-looking information within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements are based on certain assumptions and analysis made by Savanna in light of its experience as well as other factors it believes are appropriate in the circumstances. However, whether actual results or events will conform to Savanna's expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results and events to differ materially from Savanna's expectations. Consequently, all of the forward-looking information and statements made in this press release are qualified by this cautionary statement and there can be no assurance that the actual results or events anticipated by Savanna will be realized or, even if substantially realized, that they will have the expected effects on Savanna or its business or operations. Except as may be required by law, Savanna assumes no obligation to update publicly any such forward looking information and statements, whether as a result of new information, future events, or otherwise.
This news release does not constitute an offer to sell of the solicitation of an offer to buy any securities within the United States. The securities to be offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act or other laws.
FOR FURTHER INFORMATION PLEASE CONTACT:
Ken Mullen Savanna Energy Services Corp. President and CEO (403) 503-9990 (403) 267-6749 (FAX)
Dwayne LaMontagne Savanna Energy Services Corp. Executive Vice President & Chief Development Officer (403) 503-9990 (403) 267-6749 (FAX) www.savannaenergy.com