PATTERSON-UTI ENERGY, INC. (NASDAQ:PTEN) Files An 8-K Termination of a Material Definitive Agreement
Item1.02
|
Termination of a Material Definitive Agreement |
On April20,2017, concurrently with, and in connection with, the
Merger, (i)Nomac Drilling, L.L.C., Performance Technologies,
L.L.C. and Great Plains Oilfield Rental, L.L.C. (each a
wholly-owned subsidiary of Patterson-UTI as a result of the
Merger) repaid all outstanding amounts under, and terminated
their revolving credit facility evidenced by, that certain
Amended and Restated Credit Agreement, dated as of August1, 2016
(as amended, the SSE Credit Facility), by and among the
borrowers and guarantors party thereto, Wells Fargo Bank, N.A.,
as administrative agent, and the lenders from time to time party
thereto and (ii)Seventy Seven Operating LLC (a wholly-owned
subsidiary of Patterson-UTI as a result of the Merger) repaid all
outstanding amounts under, and terminated, its seven-year term
loan (the Term Loan) and incremental term loan (the
Incremental Term Loan) evidenced by that certain Term Loan
Credit Agreement, dated as of June25, 2014, by and among Seventy
Seven Operating LLC, as borrower, SSE, and the other guarantors
from time to time party thereto, Wilmington Trust, National
Association as successor administrative agent, and the lenders
party thereto, which was supplemented by that certain Incremental
Term Supplement (TrancheA), dated as of May13, 2015. At the
closing of the Merger, outstanding letters of credit under the
SSE Credit Facility were deemed to be incurred under the
Patterson-UTI Credit Facility (as defined below). No early
termination or prepayment penalties were incurred as a result of
the termination of the SSE Credit Facility, the Term Loan or the
Incremental Term Loan or the repayment of outstanding amounts
thereunder.In connection with the termination of the SSE Credit
Facility, Term Loan and Incremental Term Loan, all guaranties and
liens securing the obligations thereunder were released.
| Item2.01. |
Completion of Acquisition or Disposition of Assets. |
On April20, 2017, to the Merger Agreement, Patterson-UTI
completed its Merger with SSE, which was accomplished through the
merger of Merger Sub with and into SSE, with SSE surviving the
Merger as a wholly-owned subsidiary of Patterson-UTI.
At the effective
time of the Merger (the Effective Time) each issued and
outstanding share of SSE common stock, par value $0.01 per share,
other than shares owned by SSE and its wholly owned subsidiaries,
shares owned by Patterson-UTI or Merger Sub and shares for which
appraisal rights held by SSE stockholders have been perfected in
compliance with Section262 of the General Corporation Law of the
State of Delaware, was converted into the right to receive 1.7851
shares (the Exchange Ratio) of newly issued Patterson-UTI
common stock, par value $0.01 per share, rounded down to the
nearest whole share. Instead of issuing fractional shares, each
SSE stockholder who otherwise would have been entitled to receive
a fraction of a share ofPatterson-UTIcommon stock will receive
cash (without interest) in lieu thereof, upon surrender of his or
her shares of SSE common stock. The exchangeagentwill aggregate
and sell allfractional sharesissuable as part of the merger
consideration at theprevailing priceon the Nasdaq Global Select
Market. An SSE stockholder who would otherwise have received a
fraction of a share ofPatterson-UTIcommon stock will receive an
amount of cash generated from such sales attributable to the
stockholders proportionate interest in the net proceeds of such
sales, less expenses and without interest. The newly issued
shares of Patterson-UTI common stock and the cash paid in lieu of
fractional shares are collectively referred to as the Merger
Consideration.
Shares of
Patterson-UTI common stock outstanding before the Effective Time
remain outstanding and have not been exchanged, converted or
otherwise changed in the Merger. Based on the number of shares of
SSE common stock issued and outstanding or deemed outstanding
immediately prior to the Effective Time, a total of 47,538,488
shares of Patterson-UTI common stock were issued to the former
holders of SSE common stock to the Merger Agreement.
2
Immediately prior
to the Effective Time, each SSE restricted stock unit award
granted prior to December12, 2016 that was outstanding as of
immediately prior to the Effective Time (the Incentive
Awards) immediately vested, any forfeiture restrictions
applicable to such Incentive Awards immediately lapsed, the
Incentive Awards were deemed settled, and each share of SSE
common stock subject to such Incentive Awards was treated as a
share of SSE common stock. At the Effective Time, each such share
of SSE common stock that was distributed in settlement of the
Incentive Awards entitled the holder thereof to receive the
Merger Consideration. In addition, at the Effective Time, each
SSE restricted stock unit award granted on or following
December12, 2016 was assumed by Patterson-UTI and converted into
a restricted stock unit award, with the same terms and conditions
as in effect immediately prior to the Effective Time, covering a
number of shares of Patterson-UTI common stock
equal to (i)the number of shares of SSE common stock subject to
the award immediately prior to the Effective Time, multiplied by
(ii)the Exchange Ratio, rounded to the nearest whole share. None
of SSEs directors or executive officers held SSE restricted stock
unit awards granted on or following December12,
2016.
The foregoing description of
the Merger Agreement and the Merger is only a summary, does not
purport to be complete, and is subject to, and qualified in its
entirety by reference to, the Merger Agreement, which was filed
as Exhibit 2.1 to Patterson-UTIs Current Report on Form 8-K filed
with the Securities Exchange Commission (the SEC) on
December13, 2016 and is incorporated herein by
reference.
| Item5.07. |
Submission of Matters to a Vote of Security Holders. |
On April20, 2017, Patterson-UTI held a special
meeting of stockholders (the Special Meeting). The
proposals are described in detail in Patterson-UTIs and SSEs
definitive joint proxy statement filed with the SEC on March22,
2017. The final results regarding each proposal are set forth
below.
| 1. |
The proposal to approve the issuance of shares of Patterson-UTI common stock to SSE stockholders in connection with the Merger contemplated by the Merger Agreement: |
|
For |
Against |
Abstain |
Broker Non-Votes |
|||
| 148,485,755 | 112,325 | 590,925 |
| 2. |
The proposal to approve the adjournment of the Patterson-UTI Special Meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies in the event there are not sufficient votes at the time of the Special Meeting to approve the first proposal listed above: |
|
For |
Against |
Abstain |
Broker Non-Votes |
|||
| 140,749,676 | 7,875,904 | 563,425 |
Each proposal was approved by
Patterson-UTIs stockholders at the Special Meeting. Stockholders
owning a total of 149,189,005 shares voted at the Special
Meeting, representing approximately 89.7% of the shares of
Patterson-UTIs common stock outstanding as of the record date for
the Special Meeting.
| Item8.01. | Other Events. |
On April20, 2017,
Patterson-UTI issued a press release announcing the Merger. A
copy of such press release is attached hereto as Exhibit 99.1 and
is incorporated herein by reference.
In order to correct an
inadvertent omission, the Consent of Independent Registered
Public Accounting Firm, which is Exhibit23.1 to the Annual Report
on Form 10-K of Patterson-UTI for the fiscal year ended
December31, 2016, filed with the Securities and Exchange
Commission on February13, 2017, has been amended to include a
reference to Patterson-UTIs Registration Statement on Form S-3
(File No.333-215678). The amended consent is attached to this
Current Report on Form 8-K as Exhibit 23.1.
Amendment to
Credit Facility
On April20, 2017,
Patterson-UTI entered into Amendment No.4 to Credit Agreement
(the Amendment), which amends the Credit Agreement, dated
as of September27, 2012, as amended, among Patterson-UTI, Wells
Fargo Bank, N.A., as administrative agent (in such capacity, the
Revolving Agent), the issuer of letters of credit and
swing line lender and each other lender party thereto governing
Patterson-UTIs revolving credit facility
(the
3
Patterson-UTI Credit
Facility). The Amendment, among other things, (i)permits
outstanding letters of credit under the SSE Credit Facility to be
deemed to be incurred under the Patterson-UTI Credit Facility and
(ii)increases the amount of the accordion feature of the
Patterson-UTI Credit Facility to permit aggregate commitments
under the Patterson-UTI Credit Facility to be increased up to
$700.0million (subject to the satisfaction of certain conditions
and the procurement of additional commitments from new or
existing lenders).
Credit Facility
Commitment Increase
On April20, 2017, the
commitment increase contemplated by that certain Commitment
Increase Agreement, dated as of January24, 2017 (the January
Increase Agreement), by and among Patterson-UTI, certain
subsidiaries of Patterson-UTI party thereto, the Revolving Agent
and the other lenders party thereto (a copy of which is filed as
Exhibit 10.1 to the Current Report on Form 8-K filed by
Patterson-UTI on January24, 2017 and is incorporated herein by
reference) became effective. In addition, on April20,
2017,Patterson-UTI entered into a commitment increase agreement
with certain of its lenders to which the total commitments
available underthe Patterson-UTICredit Facility(after giving
effect to the January Increase Agreement) increased to
$630million through September 2017 and to $490million through
March 2019. The terms of thePatterson-UTICredit Facility allow
Patterson to further increase total commitments to an amount not
to exceed $700million, subject to the satisfaction of certain
conditions precedent, includingprocurement of additional
commitments from new or existing lenders.
On April20, 2017, in
connection with the Merger, SSE and its material subsidiaries
became guarantors under the Patterson-UTI Credit Facility and
Patterson-UTIs Series A note purchase agreement, Series B note
purchase agreement and reimbursement
agreement.
The foregoing is qualified in
its entirety by reference to (i)Amendment No.4 to Credit
Agreement, dated as of April20, 2017, by and among Patterson-UTI,
certain subsidiaries of Patterson-UTI party thereto, the
Revolving Agent and the other lenders party thereto, a copy of
which is filed as Exhibit 10.1 to this Current Report on Form 8-K
and is incorporated herein by reference and (ii)the Commitment
Increase Agreement, dated as of April20, 2017, by and among
Patterson-UTI, certain subsidiaries of Patterson-UTI party
thereto, the Revolving Agent and the other lenders party thereto,
a copy of which is filed as Exhibit 10.2 to this Current Report
on Form8-K and is incorporated herein by
reference.
| Item9.01 | Financial Statements and Exhibits. |
(a)Financial Statements of
Business Acquired
The audited consolidated
financial statements of SSE (Successor) as of December31, 2016
and for the five months ended December31, 2016 and the audited
consolidated financial statements of SSE (Predecessor) as of
December31, 2015 and for the seven months ended July31, 2016 and
for each of the two years in the period ended December31, 2015,
and the related notes to the consolidated financial statements,
are attached hereto as Exhibit 99.2.
(b)Pro Forma Financial
Information
The unaudited pro forma
condensed combined financial information of Patterson-UTI as of
and for the year ended December31, 2016, together with the notes
thereto, are attached hereto as Exhibit
99.3.
4
(d)Exhibits
|
Exhibit No. |
Description |
|
| 10.1 |
Amendment No.4 to Credit Agreement, dated as of April20, 2017, by and among Patterson-UTI, certain subsidiaries of Patterson-UTI party thereto, Wells Fargo Bank, N.A., as administrative agent, issuer of letter of credit and swing line lender and the other lenders party thereto. |
|
| 10.2 |
Commitment Increase Agreement, dated as of April20, 2017, by and among Patterson-UTI, certain subsidiaries of Patterson-UTI party thereto, Wells Fargo Bank, N.A., as administrative agent, issuer of letter of credit and swing line lender and the other lenders party thereto. |
|
| 23.1 | Consent of PricewaterhouseCoopers LLP. | |
| 23.2 | Consent of PricewaterhouseCoopers LLP. | |
| 99.1 |
Press Release issued by Patterson-UTI Energy, Inc. dated April20, 2017. |
|
| 99.2 |
The audited consolidated financial statements of SSE (Successor) as of December31, 2016 and for the five months ended December31, 2016 and the audited consolidated financial statements of SSE (Predecessor) as of December31, 2015 and for the seven months ended July31, 2016 and for each of the two years in the period ended December31, 2015, and the related notes to the consolidated financial statements. |
|
| 99.3 |
The unaudited pro forma condensed combined financial information of Patterson-UTI as of and for the year ended December31, 2016, together with the notes thereto. |
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About PATTERSON-UTI ENERGY, INC. (NASDAQ:PTEN)
Patterson-UTI Energy, Inc. owns and operates fleets of land-based drilling rigs and a fleet of pressure pumping equipment in the United States. The Company operates in three segments: Contract Drilling, Pressure Pumping, and Oil and Natural Gas. The Company provides contract drilling services to oil and natural gas operators in the continental United States, and western and northern Canada. The Company provides pressure-pumping services to oil and natural gas operators. The Company also invests in oil and natural gas properties. The Company’s Contract Drilling segment markets its contract drilling services to oil and natural gas operators. The Company’s Pressure Pumping segment provides pressure-pumping services to oil and natural gas operators in Texas and the Appalachian region. The Company’s oil and natural gas working interests are located in producing regions of Texas and New Mexico. Pressure pumping services consist of well stimulation, such as hydraulic fracturing. PATTERSON-UTI ENERGY, INC. (NASDAQ:PTEN) Recent Trading Information
PATTERSON-UTI ENERGY, INC. (NASDAQ:PTEN) closed its last trading session up +0.04 at 22.49 with 3,190,639 shares trading hands.
