Oil States International, Inc. (NYSE:OIS) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
On the date of and in connection with the closing of the Acquisition, the Company and the GEODynamics B.V., a Netherlands private limited liability company (the “Selling Stockholder”) entered into a Registration Rights Agreement (“Registration Rights Agreement”) to which, the Company agreed to, among other things, (i) file a Registration Statement on Form S-3 with the Securities and Exchange Commission no later than five business days following the closing of the Acquisition to permit the resale of the Common Stock issued to the Selling Stockholder, (ii)facilitate up to two underwritten offerings for the Selling Stockholder, (iii)facilitate certain block trades for the Selling Stockholder and (iv)provide certain piggyback registration rights to the Selling Stockholder. The foregoing description of the Registration Rights Agreement is only a summary, does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Registration Rights Agreement, a copy of which is filed as Exhibit 4.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 2.01. Completion of Acquisition or Disposition of Assets.
The information set forth under Introductory Note regarding the closing of the Acquisition is incorporated by reference into this Item 2.01.
The Company completed the Acquisition to a Purchase Agreement dated December 12, 2017 (the “Purchase Agreement”) with (i) GD Development Corporation, a Delaware corporation and a wholly owned subsidiary of the Company, (ii) the Selling Stockholder, (iii) LRP IV Luxembourg Holdings S.A.R.L., a Luxembourg limited liability company and LRP V Luxembourg Holdings S.A.R.L., a Luxembourg limited liability company (iv) Oakall Management Limited, LLC, a Texas limited liability company, and GEODynamics Partners LLC, a Delaware limited liability company, and (v) David Sanford Wesson, Robert E. Davis and Johnny Joslin, each a natural Person.
to the Purchase Agreement, each party has agreed to indemnify the other for breaches of representations and warranties, breaches of covenants and certain other matters, subject to certain exceptions and limitations. The foregoing description of the Purchase Agreement is only a summary, does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Purchase Agreement, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 2.02. Results of Operations and Financial Condition
The information set forth in Item 8.01 of this Current Report and the press release dated January 18, 2018 and filed as Exhibit 99.2 to this Current Report is incorporated by reference in this Item 2.02 of this Current Report to the extent such information relates to the Company’s results of operations or financial condition as of or for the year ended December 31, 2017 or any quarterly period included therein.
Item 3.02. Unregistered Sales of Equity Securities.
The issuance of the Common Stock to the Purchase Agreement and the description thereof set forth under Item 1.01 of this Current Report are incorporated by reference in this Item 3.02 of this Current Report. The Common Stock was issued in reliance upon the exemption from the registration requirements of the Securities Act, provided by Section 4(a)(2) of the Securities Act as sales by an issuer not involving any public offering.
The information set forth in Item 1.01 with respect to the Acquisition is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
On January 12, 2018, the Company issued a press release relating to the closing of the Acquisition. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
On January 18, 2018, the Company issued a press release relating to the expected impacts on the Company from the Tax Reform Legislation (as defined below). A copy of the press release is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
The information furnished to this Item 7.01 (including Exhibits 99.1 and 99.2) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 8.01. Other Events.
As described above, the Company is required to file a Registration Statement on Form S-3 (the “Resale Shelf”) with the Securities and Exchange Commission to the Registration Rights Agreement. The Company is providing the following disclosure so that it may be incorporated by reference into the Resale Shelf and the Company’s other filings under the Securities Act.
On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (“Tax Reform Legislation”) which resulted in significant changes to U.S. tax and related laws, including certain key federal income tax provisions applicable to multinational companies such as the Company.
Given the tax law changes, the Company expects to record incremental non-cash income tax expense related to the U.S. transition tax on its unremitted foreign earnings and to provide reserves against its foreign tax credits which were recorded as assets prior to U.S. tax reform. Additionally, the Company is required to revalue its other U.S. deferred tax assets and liabilities to reflect the lower U.S.corporate income tax rate which has been reduced from 35% to 21%. The Company has estimated that this one-time, non-cash charge associated with U.S. income tax reform will range between $27 million to $30 million of incremental income tax expense which will be recorded in the fourth quarter of 2017.
On a longer term basis, certain aspects of the Tax Reform Legislation are expected to have a positive impact on the Company’s future U.S. income tax expense, including the reduction in the U.S. corporate income tax rate.
The ultimate impact of the Tax Reform Legislation may differ from the Company’s estimates, possibly materially, due to changes in the interpretations and assumptions made by the Company as well as additional regulatory guidance that may be issued and actions the Company may take as a result of the Tax Reform Legislation. The Company will continue to assess the expected impacts of the new tax law and it will include its estimated impacts and additional disclosures in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.
Item 9.01. Financial Statements and Exhibits.
(a)Financial Statements of Business Acquired.
The audited consolidated financial statements for GEODynamics as of and for years ended December31, 2016 and 2015, including the notes thereto, and the independent auditor’s report related thereon, are attached hereto as Exhibit 99.3 and incorporated herein by reference. The unaudited consolidated financial statements for GEODynamics as of and for the nine months ended September 30, 2017 and 2016 and for the three months ended September 30, 2017 are attached hereto as Exhibit 99.4 and incorporated herein by reference.
(b)Pro Forma Financial Information.
The unaudited pro forma condensed combined financial statements for the Company as of September 30, 2017 and for the three months ended September 30, 2017, the nine months ended September 30, 2017 and 2016 and the year ended December 31, 2016, which give effect to the Acquisition, are attached hereto as Exhibit 99.5 and incorporated herein by reference.
(d) Exhibits
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Exhibit Number |
Description |
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2.1 |
Stock Purchase Agreement, dated as of December 12, 2017, by and among GEODynamics B.V., GEODynamics, Inc., the Seller Shareholders, GD Development Corporation and Oil States International, Inc.(incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, as filed with the Commission on December 13, 2017 (File No. 001-16337)). |
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4.1 |
Registration Rights Agreement, dated as of January 12, 2018, between Oil States International, Inc., and GEODynamics B.V. |
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23.1 |
Consent of Weaver & Tidwell L.L.P. |
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99.1 |
Press Release dated January 12, 2018, issued by Oil States International, Inc. |
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99.2 |
Press Release dated January 18, 2018, issued by Oil States International, Inc. |
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99.3 |
Audited consolidated financial statements of GEODynamics, Inc. as of and for the years ended December 31, 2016 and 2015. |
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99.4 |
Unaudited consolidated financial statements of GEODynamics, Inc. as of and for the nine months ended September 30, 2017 and 2016 and for the three months ended September 30, 2017. |
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99.5 |
Unaudited pro forma condensed combined financial statements of Oil States International, Inc. as of and for the three months ended September 30, 2017, the nine months ended September 30, 2017 and 2016, and the year ended December 31, 2016, together with the notes thereto. |
OIL STATES INTERNATIONAL, INC ExhibitEX-4.1 2 ex_103194.htm EXHIBIT 4.1 ex_103194.htm Exhibit 4.1 REGISTRATION RIGHTS AGREEMENT This REGISTRATION RIGHTS AGREEMENT (the “Registration Rights Agreement”),…To view the full exhibit click here
About Oil States International, Inc. (NYSE:OIS)
Oil States International, Inc., through its subsidiaries, is a provider of specialty products and services to oil and natural gas companies throughout the world. The Company’s segments include offshore products and well site services. It designs and manufactures a number of products for the offshore energy industry through Offshore Products segments. The well site services segment includes a range of products and services that are used to drill for, establish and maintain the flow of oil and natural gas from a well throughout its life cycle. It operates in active oil and natural gas producing regions, including onshore and offshore United States, Canada, West Africa, the North Sea, South America and Southeast and Central Asia. Its customers include national oil companies, independent oil and natural gas companies, onshore and offshore drilling companies, and other oilfield service companies. It serves over two primary markets with its drilling services business.