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Canadian oil and gas industry distributor CE Franklin, Ltd., Calgary, AB, and Smith International, Inc., Houston, TX, have terminated negotiations relating to CE Franklin's previously announced proposal to acquire Wilson International, Inc., Smith's distribution operations. Smith currently owns approximately 55% of the outstanding shares of CE Franklin and all of the shares of Wilson.
Originally, the deal announced last July (See MDM July 25, 2004) 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 a revised transaction in September, CE Franklin was to issue approximately 54 million common shares to Smith in exchange for the shares of Wilson. That put 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 was expected to increase from the current 55 percent to approximately 89 percent of the outstanding shares of CE Franklin. Smith's intention was 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.
CE Franklin distributes products and related services to the Canadian oil and gas industry, including projects involving drilling and completions, production and maintenance and capital construction. The company serve has a network of 37 branches across Canada - from British Columbia to Ontario - as well as internationally.
Smith International, Inc. is also a supplier of products and services to the oil and gas exploration and production industry, the petrochemical industry and other industrial markets through its four principal business units - M-I SWACO, Smith Technologies, Smith Services and Wilson.