May 30, 2012
CE Franklin Ltd. (NASDAQ: CFK; TSX: CFT)
") announced today that it has entered into an arrangement agreement (the "
") with a wholly owned National Oilwell Varco, Inc. ("NOV") subsidiary,
NOV Distribution Services ULC
"), pursuant to which, NDS has agreed to acquire all of the issued and outstanding common shares (the "
") of CE Franklin for consideration of
in cash per Common Share. The transaction will be implemented by way of a statutory plan of arrangement (the "
The total consideration payable under the Arrangement is approximately
. The consideration per Common Share represents a 36% premium to the closing price of the Common Shares on the TSX on
May 30, 2012
and a 36% premium to the volume weighted average price of the Common Shares on the TSX over the 20-day period prior to
April 17, 2012
, when the Company announced that it was conducting a review of strategic alternatives.
The board of directors of CE Franklin (the "
CE Franklin Board
"), after receiving the recommendation of the special committee of the CE Franklin Board has
other than abstaining directors, unanimously approved the Arrangement and the entering into of the Arrangement Agreement. CIBC World Markets Inc., CE Franklin's financial advisor, has provided the CE Franklin Board with its opinion to the effect that, subject to certain assumptions, limitations and qualifications set forth therein, the consideration to be received by the holders of Common Shares pursuant to the Arrangement is fair, from a financial point of view, to such holders. 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 approximately 57% of the outstanding Common Shares, have agreed to vote their Common Shares in favour of the Arrangement in accordance with the terms of the support agreements entered into in respect of the Arrangement. The support agreements will terminate in the event the Arrangement Agreement is terminated in accordance with its terms.
, NOV's Chairman, President and CEO, 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. We look forward to welcoming the CE Franklin team of professionals to National Oilwell Varco. We expect CE Franklin's high level of service and support to enhance our opportunities to provide a wide range of products to the growing Canadian marketplace, for the benefit of both our customers and employees. "
, President and Chief Executive Officer of CE Franklin, commented, "This transaction brings our shareholders significant value and the opportunity for our organization to integrate with a global leader to provide a strong platform for enhanced client service and expanded opportunities for our employees."
Completion of the Arrangement is subject to a number of conditions including, but not limited to, the approval of at least 66⅔% 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. An information circular in connection with the Arrangement will be mailed to CE Franklin shareholders in June. The CE Franklin Board unanimously, other than abstaining directors, recommends that shareholders vote in favour of the Arrangement. Subject to satisfaction or waiver of conditions precedent to closing, including receipt of required regulatory approvals, closing is expected to occur shortly following the special meeting.