CE Franklin Ltd. (CFK,CFT.TO) said Wednesday it has agreed to be acquired by NOV Distribution Services ULC, an unit of oil and gas equipment and services company National Oilwell Varco Inc. (NOV).
NOV Distribution Services ULC, or NDS, will acquire all of the issued and outstanding common shares of CE Franklin for consideration of C$12.75 in cash per common share.
The transaction will be implemented by way of a statutory plan of arrangement. The total consideration payable under the arrangement is about C$240 million.
The consideration per common share represents a 36% premium to the closing price of the common shares on the TSX on May 30.
NOV Chief Executive Pete Miller said, "The addition of CE Franklin to NOV's Canadian distribution operations will broaden our product offering and customer base, while strengthening our combined abilities to serve all of our customers..."
The board of directors of CE Franklin has, other than abstaining directors, unanimously approved the Arrangement.
CE Franklin's largest shareholder, Schlumberger, and all of the members of the CE Franklin Board and CE Franklin's executive officers, who collectively own about 57% of the outstanding common shares, have agreed to vote in favour of the Arrangement.
Completion of the Arrangement is subject to a number of conditions including the approval of at least 66?% of the votes cast in person or by proxy at a special meeting of CE Franklin's shareholders, as well as customary court and regulatory approvals. The special meeting of CE Franklin shareholders is expected to be held in mid-July.
CE Franklin has also agreed to pay a termination fee of $7.5 million in certain circumstances, including if the Arrangement Agreement is terminated by CE Franklin in order to accept a superior proposal.
Concurrent with the entering into of the Arrangement Agreement, the shareholder rights plan adopted by CE Franklin on April 18, 2012 has been terminated.
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