HWC, based in Houma Louisiana, provides live and dead well workover services throughout the world, utilizing a fleet of 29 owned and operated hydraulic workover units. HWC currently has operations in the U.S., Venezuela, Algeria, West Africa, and the Middle East. For the year ended December 31, 2004, HWC generated approximately $34 million in revenues and $4 million in EBITDA(A) which were included in the results of Oil States' Well Site Services segment.
"The transaction will create a worldwide, integrated leader in pressure control and blowout prevention services, providing enhanced growth opportunities for the combined business," stated Douglas E. Swanson, president and chief executive officer of Oil States. "We expect the transaction to be fairly neutral to our net income and earnings per diluted share in the near term. However, the combination has the possibility of creating incremental value for Oil States."
Upon the closing of the transaction, Oil States will own approximately 44% of the combined company and will receive senior subordinated promissory notes totaling $15.0 million in aggregate principal from Boots & Coots bearing a fixed annual interest rate of 10% and maturing four and one half years from the closing of the transaction. In addition, Oil States has the right under the transaction agreement to nominate three additional members to Boots & Coots' existing five-member Board of Directors.
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