CALGARY, March 31 /CNW/ - Innicor Subsurface Technologies Inc.
("Innicor") (TSX: IST) is pleased to announce that Innicor and BJ Services
Company ("BJ Services") (NYSE: BJS) have entered into a pre-acquisition
agreement pursuant to which BJ Services has agreed to make an offer to
purchase all of the issued and outstanding common shares of Innicor for cash
consideration of $2.50 per share pursuant to a take-over bid (the "Offer").
Innicor has approximately 19.8 million common shares outstanding (on a fully
diluted basis) representing a transaction value, including assumed debt, of
approximately $56 million.
The Offer represents a 47% premium over the closing price of Innicor's
common shares on the Toronto Stock Exchange on March 28, 2008.
Mr. Delton Campbell, President and Chief Executive Officer of Innicor,
said, "Innicor's Board of Directors has determined that the Offer of
$2.50 cash per share represents strong and fair value for the company's
shareholders. The Offer represents a significant premium to recent trading
values of Innicor stock."
Major Terms and Conditions
The Offer is conditional upon BJ Services acquiring at least 66(2)/(3)%
of Innicor's outstanding common shares calculated on a fully diluted basis and
is subject to other customary conditions.
The pre-acquisition agreement provides that Innicor will pay BJ Services
a non-completion fee of $2,000,000 in certain circumstances if the proposed
transaction is not completed. Innicor has agreed not to solicit further offers
or initiate discussions or negotiations with any third party concerning the
sale of Innicor, subject to fiduciary obligations, including the right to
respond to superior proposals, which BJ Services has the right to match.
In connection with the Offer, directors, officers and major shareholders
holding an aggregate of approximately 9.5 million common shares and
approximately 840,000 common shares issuable on the exercise of options, or
approximately 52% of the issued and outstanding common shares of Innicor
calculated on a fully-diluted basis have entered into lock-up agreements with
BJ Services pursuant to which they have agreed to tender all of their common
shares to the Offer.
Other Terms and Conditions
The transaction is subject to Canadian regulatory approvals and other
customary closing conditions. Full details of the Offer will be included in a
formal take-over bid circular and related documents, which are expected to be
mailed to Innicor's shareholders, together with the directors' circular, not
later than April 11, 2008. The Offer, unless extended, will expire 35 days
from the commencement of the Offer. Completion of the transaction is expected
to occur in May 2008. Once mailed, the take-over bid circular and the
directors' circular will be available on the SEDAR website at www.sedar.com.
Peters & Co. Limited is acting as financial advisor to Innicor with
respect to the transaction and has advised the Board of Directors of Innicor
that the consideration to be received under the Offer is fair, from a
financial point of view, to Innicor shareholders.
Innicor Board Recommendation
The Offer has been unanimously approved by those directors of Innicor
present and voting at the meeting called to consider the proposed transaction
(with 1 out of 7 directors being absent from the meeting) and the directors
concluded that the transaction is in the best interests of the Innicor
shareholders. In addition, those directors voting on the proposed transaction
unanimously resolved to recommend that all Innicor shareholders tender their
common shares to the Offer. The remaining director was absent from the meeting
because he is currently out of the country and has subsequently confirmed his
support of the proposed transaction.
Cancellation of Stock Options
Innicor also announces today that prior to entering into the
pre-acquisition agreement with BJ Services, it cancelled all of the stock
options granted on January 28, 2008 to eligible participants (including the
directors and officers of Innicor) to purchase an aggregate of 391,000 common
shares of Innicor at a price of $1.37 per share. These stock options were
cancelled having regard to the proximity of the receipt of the initial
indication of interest received from BJ Services to the grant of such options.
The Board of Directors determined that the grant of these options may be
viewed as being too close to the time that Innicor received the initial
indication of interest from BJ Services.
Innicor designs and manufactures a range of downhole tools and equipment
used primarily in completions operations of the upstream oil and gas sector.
Innicor's product line includes "Completion Tools" such as packers and other
zonal isolation devices, liner hangers, explosive shaped charges, perforating
equipment including carriers and tubing conveyed perforating devices, and
other related wireline equipment. In addition to product sales of its
equipment, Innicor provides a wide range of services to exploration and
production companies, primarily in conjunction with the Completion Tools and
Liner Hanger product lines.
Innicor currently operates two manufacturing facilities in the Calgary,
Alberta region and manufactures the vast majority of its products in house.
One of those facilities, the shaped charge plant at Standard, Alberta near
Calgary, is the only facility of its kind in Canada.
Innicor's products and services are sold both in Canada and
Certain information contained herein constitutes forward-looking
information under applicable securities laws. All statements, other than
statements of historical fact, which address activities, events or
developments that we expect or anticipate may or will occur in the future, are
forward-looking information. Forward-looking information typically contains
statements with words such as "seek", "anticipate", "plan", "continue",
"estimate", "expect", "may", "will", "project", "potential", "targeting",
"intend", "could", "might", "should", "believe" or similar words suggesting
future outcomes or outlook. The following discussion is intended to identify
certain factors, although not necessarily all factors, which could cause
future outcomes to differ materially from those set forth in the
forward-looking information. The risks and uncertainties that may affect the
operations, performance, development and results of Innicor's businesses
include, but are not limited to, the following factors: the availability of
capital, supplies and costs of materials, the demand for Innicor's products,
the level of exploration and development activity in the petroleum industry
and changing market conditions. The reader is cautioned that these factors and
risks are difficult to predict and that the assumptions used in the
preparation of such information, although considered reasonably accurate by
Innicor at the time of preparation, may prove to be incorrect or may not
occur. Accordingly, readers are cautioned that the actual results achieved
will vary from the information provided herein and the variations may be
material. Readers are also cautioned that the foregoing list of factors and
risks is not exhaustive. Additional information on these and other risks,
uncertainties and factors that could affect Innicor's operations or financial
results are included in our filings with the securities commissions or similar
authorities in certain provinces of Canada, as may be updated from time to
time. There is no representation by Innicor that actual results achieved will
be the same in whole or in part as those set out in the forward-looking
information. Furthermore, the forward-looking statements contained herein are
made as of the date hereof, and Innicor does not undertake any obligation to
update publicly or to revise any forward-looking information, whether as a
result of new information, future events or otherwise. Any forward-looking
information contained herein is expressly qualified by this cautionary
For further information:
For further information: Delton Campbell, President and Chief Executive
Officer, (403) 236-2815 or Ian Bootle, Vice President, Finance and Chief
Financial Officer, (403) 236-2815