Benzinga | Jan 10, 2022 06:06AM EST

Wilks Brothers, LLC Announces Amendments To Merger Agreement And Extension Of Offer To Acquire Dawson Geophysical Company

Wilks Brothers, LLC ("Wilks") today announced that WB Acquisitions Inc., a subsidiary of Wilks ("Merger Sub"), Dawson Geophysical Company (NASDAQ:DWSN) ("Dawson") and Wilks, have agreed to a series of amendments to the Agreement and Plan of Merger, dated October 25, 2021 as amended by Amendment No. 1 dated December 14, 2021 and Amendment No. 2 dated January 4, 2022, by and among Dawson, Wilks and Merger Sub (as so amended, the "Merger Agreement") that are intended to facilitate completion of the Offer and the back end merger.

First, the Merger Agreement is being amended to decrease the 80% Minimum Condition from 80% to 66.67% (the "Minimum Condition"). Assuming the other Offer Conditions are satisfied, Merger Sub intends to accept for purchase and pay for all of the Shares validly tendered in the Offer if the Minimum Condition is satisfied on the Expiration Date. Promptly following the completion of the Offer, Dawson intends to convene a special meeting of Dawson's shareholders at which such shareholders will be asked to approve the merger of Merger Sub with and into Dawson, with Dawson surviving such merger (the "Merger"). Merger Sub intends to vote all of the Shares it owns, including the Shares acquired in the Offer, in favor of the Merger at such Dawson shareholder meeting.

If Merger Sub completes the Merger, Dawson shareholders not tendering their Shares in the Offer (other than Dawson or any of its subsidiaries, the Parent Related Entities or any shareholders who have properly exercised their appraisal rights) will receive cash in an amount equal to the $2.34 Offer Price, without interest and less any required withholding taxes. In addition, Dawson, as the surviving corporation in the Merger, will become a subsidiary of Parent and its affiliates, and the Shares will no longer be publicly traded.

If Merger Sub does not complete the Merger, then the shareholders of Dawson not tendering in the Offer will not receive any consideration and will become minority shareholders in a company over which Wilks and its affiliates have significant influence. In addition, there may be so few remaining shareholders and publicly traded shares that there will no longer be an active or liquid public trading market for Shares. In addition, Dawson may no longer be required to make filings with the SEC and the number of outstanding shareholders could be reduced to a number which requires delisting of Dawson's shares from the NASDAQ.

Second, the Merger Agreement has been amended to provide for Stephen Jumper, Craig Cooper and Michael Klofas to resign from Dawson's Board of Directors, with Mark Vander Ploeg and Ted North continuing as directors, and for the appointment to Dawson's Board of Matt Wilks, Sergei Krylov and Bruce Bradley, in each case, effective as of the Acceptance Time. Mr. Jumper is expected to remain with Dawson and continue as its Chief Executive Officer.

Finally, the parties have extended the previously commenced cash Offer by Merger Sub to purchase all of the issued and outstanding Shares of common stock of Dawson to 5:00 p.m., New York City time, on January 14, 2022. The Offer was previously scheduled to expire at 11:59 p.m., New York City time, on January 7, 2022. American Stock Transfer & Trust Company, LLC, the depositary for the Offer, has advised Wilks that, as of 6:00 p.m., New York City time, on January 7, 2022, the Shares tendered pursuant to the Offer together with the Shares owned by Wilks and its affiliates, represented approximately 71.57% of Dawson's outstanding Shares. Shareholders who have already tendered their Shares do not have to re-tender their Shares or take any other actions as a result of the extension.

Wilks encourages Dawson stockholders to tender during the extension period. As previously publicly disclosed by Dawson, weak market conditions have resulted in accelerating cash burn rates, declining accounts receivable balances and minimal opportunities to further reduce costs and capital expenditures. It is Wilks' belief that Dawson, as a private entity, would be better equipped to control costs for the unknown duration of a challenging market environment. Wilks believes the Offer price offered to stockholders of Dawson continues to be the optimal value currently available, and Wilks also believes that further delays and continuing market conditions will likely erode value for all stakeholders. As a result of potential further value erosion, Wilks believes haste is warranted to ensure the ability to deliver optimal value for stakeholders.

The Offer is subject to the Offer to Purchase, and all capitalized terms used but not otherwise defined herein shall have the meanings given in the Offer to Purchase and Merger Agreement.

D.F. King & Co., Inc. is the information agent for the Offer and any questions or requests for the Offer to Purchase and related materials with respect to the Offer may be directed to them by telephone, toll-free, at (800) 207-3158, if a stockholder, or by calling (212) 269-5550, if a bank or broker.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful.