Energy Services Acquisition Corp. reported that the Stock Purchase Agreement with GasSearch Corporation and GasSearch Drilling Services Corporation has been terminated.
Energy Services has entered into an Agreement and Plan of Merger to acquire C.J. Hughes Construction Company, Inc. headquartered in Huntington, West Virginia. C.J. Hughes may be considered an affiliate of Energy Services since Marshall T. Reynolds and Neal Scaggs are shareholders, and Edsel R. Burns is the president and a shareholder of C.J. Hughes Construction Company. Mr. Reynolds is the Chairman of the Board, Chief Executive Officer and Secretary of Energy Services. Mr. Scaggs and Mr. Burns are directors of Energy Services. C.J. Hughes is primarily engaged in the construction, replacement and repair of natural gas pipelines for utility companies and private natural gas companies. To a lesser extent, C.J. Hughes is engaged in the installation of water and sewer lines.
The Agreement and Plan of Merger calls for the shareholders of C.J. Hughes Construction Company to receive $36,896 in cash and 6,434.7 shares of Energy Services common stock for each share of C.J. Hughes stock held. The total Merger consideration will be approximately 50% cash and 50% common stock with a total value of $34.0 million as of the date of the agreement. Under certain circumstances the number of shares to be issued may be increased in order to ensure that at least 40% of the value to be paid to C.J. Hughes shareholders is in common stock.
The closing of the C.J. Hughes Acquisition is subject to various closing conditions, including the acquisition of another business or businesses, such that the total value of the businesses acquired have an aggregate fair value of 80% of Energy Services net assets, as defined in its initial public offering. In addition, the closing of the acquisition is further conditioned on holders of less than 20% of the shares of Energy Services common stock voting against the transaction and electing to convert their Energy Services common stock into cash from the trust fund established in connection with Energy Services initial public offering.
Marshall T. Reynolds, Chairman of the Board of Energy Services, stated, "We believe that with the combined strengths of C.J. Hughes along with those of the previously announced transaction with S.T. Pipeline, Energy Services will be well positioned to pursue the growth possibilities that exist within the energy services industry today."
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