6309 Monarch Park Place, Suite 203
Niwot, CO 80503, USA
Phone (303) 443-5060
Toll free (888) 742-5060
CE Franklin, Ltd., Calgary, AB, announced it has revised transaction terms for the purchase of Wilson International, Inc., the distribution operations of Smith International, Inc. (See MDM July 25, 2004). Originally, the deal called for CE Franklin to issue shares between US$245 million and US$250 million, or between 66-68 million shares of CE Franklin. Under the terms of the revised transaction, CE Franklin will issue approximately 54 million common shares to Smith in exchange for the shares of Wilson. That puts the deal value at about US$222 million, with other consideration after the close of the transaction.
Subsequent to the transaction, Smith's ownership interest is expected to increase from the current 55 percent to approximately 89 percent of the outstanding shares of CE Franklin. Smith's intention is to reduce its percentage ownership interest back to the level currently held; however, the timing of such would be dependent on market conditions and other factors.
The parties have agreed to increase the price used to calculate the number of CE Franklin shares issued to the 15 day weighted average share price of CE Franklin on Aug. 26, 2004 which was approximately $4.1069. Additionally, the parties agreed to modify the transaction terms to provide that certain consideration which previously would have been received by Smith in the form of CE Franklin shares at closing, will now be realized by Smith on a post-closing basis as specific assets are liquidated.