MIDLAND, Texas, Oct. 9, 2014 /PRNewswire/ -- Dawson
Geophysical Company (Dawson)
(NASDAQ: DWSN) and TGC Industries, Inc. (TGC) (NASDAQ: TGE) today
jointly announced a proposed strategic business combination.
Upon consummation of the transaction, current Dawson and TGC shareholders will own
approximately 66% and 34% of the combined company, respectively.
Closing of the transaction is anticipated during the first calendar
quarter of 2015, subject to the approval by holders of 66.67% of
the outstanding shares of both TGC and Dawson, as well as certain other closing
conditions and regulatory approvals.
The transaction is structured as a tax-free stock-for-stock
transaction. Dawson will
merge with a TGC subsidiary and become a wholly-owned subsidiary of
TGC. TGC will change its name to Dawson Geophysical Company
(hereinafter referred to as new Dawson). The new Dawson shares will trade on NASDAQ under the
symbol DWSN.
Immediately prior to the transaction, TGC will implement a
1-for-3 reverse stock split. The reverse stock split will
provide for a sufficient number of TGC authorized shares to
consummate the transaction and adjust the number of
post-transaction shares to facilitate trading within reasonable
price ranges and volumes on NASDAQ. After giving effect to
the TGC reverse stock split, Dawson shareholders will receive 1.76 shares
of TGC split-effected common stock for each share of Dawson common stock held at the effective time
of the transaction, with cash to be paid in lieu of any fractional
shares. For example, at the effective time of the
transaction, a TGC shareholder currently owning 100 shares of
TGC common stock will own 33 shares of split-effected TGC common
stock, while a Dawson shareholder
currently owning 100 shares of Dawson common stock will receive 176
shares of TGC split-effected common stock. As a result of the
reverse stock split, TGC's currently outstanding shares will
be reduced from approximately 22,001,125 million to 7,333,708
million shares and TGC will issue approximately 14,236,022 million
TGC split-effected shares in exchange for approximately 8,065,233
shares held by Dawson
shareholders. Based on the above-noted exchange ratio
and reverse stock split, at the effective time of the transaction,
the implied valuation of the current Dawson shares should be three times the
trading price of the TGC shares multiplied by 1.76.
Stephen Jumper, current Chairman,
President and Chief Executive Officer of Dawson, will serve as Chairman, President and
CEO of new Dawson. Wayne
Whitener, current President, CEO and a Director of TGC, will
serve as Vice Chairman of the Board and an officer of new
Dawson. Ongoing operations will be
conducted under the Dawson and
Eagle Canada names.
In addition to Messrs. Jumper and Whitener, the Board of
Directors of new Dawson will
include four members of the current Dawson board - Craig
Cooper, Gary Hoover,
Ted North and Mark Vander Ploeg - and two members of the
current TGC board – William Barrett
and Dr. Allen
McInnes.
The Dawson and TGC Boards of
Directors have approved the transaction, and directors and certain
officers representing approximately 28.89% of outstanding TGC
shares and approximately 2.40% of outstanding Dawson shares have agreed to vote in favor of
the transaction. The Boards of Directors of both companies
have recommended to their respective shareholders that they vote in
favor of the transaction.
Transaction Highlights:
- Expanded geographical presence and expertise to better serve
client base
- Combined strong balance sheet will provide increased
operational and financial flexibility
- Complementary equipment bases increase operational
efficiencies and logistics
- Improved processes and increased efficiencies lead to lower
cost structure and increased revenue
- Increased level of services and reduced outsourcing
- Increased channel count for improved efficiency, higher
resolution imaging and to meet increased channel count
requirements
- Expanded client base and order book will increase crew
utilization rates
Stephen Jumper, Chairman,
President and Chief Executive Officer of Dawson, said, "This is an exciting time for
our companies as we work together to combine our complementary
resources and create a best-of-breed company. The combination of
Dawson and TGC results in a
stronger company that will better serve our valued clients,
shareholders and employees. The demand on our technology has been
to produce cost-effective, high-resolution images in a shorter
cycle time. The combination of Dawson and TGC improves our ability to meet
that demand with an expanded equipment base, logistics advantages,
and improved services and expertise. Collectively, our
resources are further positioned to increase utilization rates,
reduce costs and provide multiple avenues of growth for the
combined company."
Wayne Whitener, President and
Chief Executive Officer of TGC, said, "We are extremely pleased to
join forces with the Dawson Geophysical team. The combination of
our shared technical, operational and international expertise
provides opportunities to better serve our company's client base. I
look forward to contributing to the success and growth of the
combined organization."
Jumper concluded, "The combination of Dawson and TGC is well-positioned to respond
to the needs of today's industry. We believe the benefits of this
combination will extend to our valued clients, shareholders and
employees for years to come. We encourage your support as we
approach the shareholder vote and look forward to putting into
action our more than 100 years of combined industry
experience."
Raymond James & Associates,
Inc. served as financial advisor to Dawson while Stephens Inc. served as financial
advisor to TGC. Baker Botts L.L.P. served as legal counsel to
Dawson while Haynes and Boone LLP
served as legal counsel to TGC.
Conference Call - October 9,
2014 - 9:00 a.m. Eastern
Time
Dawson and TGC have scheduled a
conference call to discuss the transaction for Thursday, October 9, 2014, at 9:00 a.m. Eastern Time / 8:00 a.m. Central Time. Participants can access
the call at (877) 300-8521 (US), (855) 669-9657 (Canada) or (412) 317-6026 (International). To
access the live audio webcast or the subsequent archived recording,
visit the Dawson and TGC websites at www.dawson3d.com and
www.tgcseismic.com, respectively. Callers can access the telephone
replay through October 12, 2014 by
dialing (877) 870-5176 (US) and (858) 384-5517 (International). The
passcode is 10054247. The webcast will be recorded and available
for replay on Dawson's and TGC's
website until November 9,
2014.
Investors, analysts, and the general public will also have the
opportunity to listen to the conference call over the Internet by
visiting http://www.dawson3d.com or http://www.tgcseismic.com. For
those who cannot listen to the live webcast, an archive will be
available shortly after the call and will remain available for
approximately twelve months on both above-mentioned websites.
Important Information For Investors and Shareholders
This release does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. The transactions contemplated by the merger
agreement, including the proposed merger and the proposed issuance
of TGC common stock in the merger, will, as applicable, be
submitted to the shareholders of Dawson and TGC for their consideration. TGC
will file with the Securities and Exchange Commission (SEC) a
registration statement on Form S-4 that will include a joint proxy
statement of Dawson and TGC that
also constitutes a prospectus of TGC. Dawson and TGC will mail the joint proxy
statement/prospectus to their respective shareholders. Dawson and TGC also plan to file other
documents with the SEC regarding the proposed transaction.
INVESTORS AND SECURITY HOLDERS OF DAWSON AND TGC ARE URGED TO READ THE JOINT
PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS THAT WILL
BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION. Investors and shareholders will be
able to obtain free copies of the joint proxy statement/prospectus
and other documents containing important information about
Dawson and TGC, once such
documents are filed with the SEC, through the website maintained by
the SEC at www.sec.gov. Dawson and
TGC make available free of charge at www.dawson3d.com and
www.tgcseismic.com, respectively (in the "Investor Relations"
section), copies of materials they file with, or furnish to, the
SEC, or investors and shareholders may contact Dawson at (432) 684-3000 or TGC at (972)
881-1099 or c/o Dennard-Lascar Associates at (713) 529-6600 to
receive copies of documents that each company files with or
furnishes to the SEC.
Participants in the Merger Solicitation
Dawson, TGC, and certain of
their respective directors and officers may be deemed to be
participants in the solicitation of proxies from the shareholders
of Dawson and TGC in connection
with the proposed transactions. Information about the directors and
officers of Dawson is set forth in
its proxy statement for its 2014 annual meeting of shareholders,
which was filed with the SEC on December 18,
2013, as well as subsequent periodic reports filed with the
SEC. Information about the directors and officers of TGC is set
forth in its proxy statement for its 2014 annual meeting of
shareholders, which was filed with the SEC on April 30, 2014. These documents can be obtained
free of charge from the sources indicated above. Other information
regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, will be contained in the joint proxy
statement/prospectus and other relevant materials to be filed with
the SEC when they become available.
About Dawson Geophysical
Dawson Geophysical Company is the leading provider of U.S.
onshore seismic data acquisition services as measured by the number
of active data acquisition crews. Founded in 1952, Dawson acquires and processes 2D, 3D and
multi-component seismic data solely for its clients, ranging from
major oil and gas companies to independent oil and gas operators as
well as providers of multi-client data libraries.
About TGC Industries
TGC Industries, Inc., based in Plano,
Texas, is a provider of seismic data acquisition services
with operations throughout the continental United States and Canada. The Company has branch offices
in Houston, Midland, Oklahoma
City and Calgary.
Safe Harbor Provisions
In accordance with the Safe Harbor provisions of the Private
Securities Litigation Reform Act of 1995, Dawson Geophysical
Company and TGC Industries, Inc. caution that statements in this
press release which are forward-looking and which provide other
than historical information involve risks and uncertainties that
may materially affect Dawson's or
TGC's actual results of operations. These risks include but are not
limited to the volatility of oil and natural gas prices; dependence
upon energy industry spending; industry competition; reduced
utilization; delays, reductions or cancellations of service
contracts; high fixed costs of operations and high capital
requirements; external factors affecting Dawson's or TGC's crews such as weather
interruptions and inability to obtain land access rights of way;
whether either company enters into turnkey or dayrate contracts;
crew productivity; the limited number of clients; credit risk
related to clients; and the availability of capital resources. A
discussion of these and other factors, including risks and
uncertainties with respect to Dawson is set forth in Dawson's Form 10-K for the fiscal year ended
September 30, 2013, and with respect
to TGC, is set forth in TGC's Form 10-K for the fiscal year ended
December 31, 2013. Dawson and TGC disclaim any intention or
obligation to revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
SOURCE Dawson Geophysical Company