By Jennifer Chiou
New York, Nov. 21 - Superior Well Services, Inc. said it will issue $80 million of second-lien notes as part of the purchase price for its acquisition of assets related to Diamondback Holdings, LLC's stimulation and pumping services segment, fluid logistics and well-site services segment and completion and production services segment.
On Nov. 18, the company entered into an amendment to the definitive asset purchase agreement with Diamondback and subsidiaries to reduce the purchase price for the assets to $225 million from $270 million.
The amendment also provided for the purchase price to be paid through the combination of a $70 million cash payment, the issuance to Diamondback of the $80 million of notes as well as the issue of $75 million of series A convertible preferred stock to Diamondback.
As part of the agreement, Superior Well is required to register the notes, preferreds and stock that would be issued on conversion of the preferreds so that they can be publicly traded by March 18, 2009.
The notes will mature on Nov. 18, 2013, and interest is payable quarterly beginning Jan. 1.
The interest rate is initially set at 7% and will escalate by 1% each year.
Superior Well may redeem the notes at any time at par plus accrued interest.
The preferreds pay a dividend of 4% and are convertible at $25.00 per share.
They are callable after five years at a price of 101 and have a forced conversion option subject to a 125% threshold.
Indiana, Pa.-based Superior Well Services provides well-site services to oil and natural gas companies, primarily technical pumping services and down-hole surveying services.
Issuer: | Superior Well Services, Inc.
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Issue: | Second-lien notes
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Amount: | $80 million
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Maturity: | Nov. 18, 2013
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Coupon: | 7% initially, steps up by 1% per year, payable quarterly
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Price: | Par
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Call feature: | Callable at any time at par
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Investor: | Diamondback Holdings, LLC
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Settlement date: | Nov. 18
|
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Issuer: | Superior Well Services, Inc.
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Issue: | Series A convertible preferred stock
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Amount: | $75 million
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Maturity: | Perpetual
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Dividend: | 4%, payable quarterly
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Price: | Par of $1,000
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Conversion price: | $25.00
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Conversion ratio: | 40
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Call: | After five years at 101
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Forced conversion: | At company's option, subject to 125% threshold
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Investor: | Diamondback Holdings, LLC
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Settlement date: | Nov. 18
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