OMNI Energy (OMNI) To Be Acquired for $122M by Wellspring Capital Affiliate

June 4, 2010 7:05 AM EDT
OMNI Energy Services Corp. (Nasdaq: OMNI) today announced that it has entered into a definitive agreement under which an affiliate of Wellspring Capital Management LLC ("Wellspring") will acquire all of OMNI's outstanding shares for $2.75 per share in cash. The total value of the transaction is approximately $122 million, including assumption of debt.

The agreement has been unanimously approved by the OMNI Board of Directors following the recommendation of a special committee of independent directors. The cash consideration represents a premium of 29.7% over the closing price of OMNI shares on June 3, 2010.

"We believe this transaction will deliver an immediate and significant premium for our shareholders especially in light of the uncertain markets after the unprecedented drop in our end markets in 2009 and the continued current uncertainty in the Gulf of Mexico," said Brian J. Recatto, President and Chief Executive Officer of OMNI. "Our strategic partnership with Wellspring is the culmination of a comprehensive process to address our balance sheet issues and will allow us to substantially improve our capital structure. Wellspring's strategic and financial resources will provide us with the stability we need to be flexible and execute as the provider of choice for our customers."

William F. Dawson, Jr., a Managing Partner of Wellspring, said, "We look forward to working with OMNI and providing them with the long term capital base they need in order to pursue business opportunities, grow their capabilities and weather the volatility of their end markets."

Completion of the transaction, which is expected in the second half of 2010, is subject to approval by OMNI's shareholders, regulatory approvals and customary closing conditions.

The transaction is not subject to a financing condition. Wellspring has furnished OMNI with commitment letters for the necessary debt financing. Three directors of OMNI, including its Chief Executive Officer Brian Recatto, are participating with Wellspring in the transaction.

The merger agreement allows OMNI until July 16, 2010 to actively solicit other possible bidders and, thereafter, subject to certain conditions, to respond to unsolicited inquiries by other persons interested in acquiring OMNI. Stephens Inc. will assist OMNI in connection with dealings with other possible bidders. Should a superior proposal be received and accepted, OMNI may, subject to certain conditions, including payment of a "break-up" fee of approximately $1.8 million plus expenses up to $0.75 million, terminate the merger agreement with the Wellspring entities.

Stephens Inc. is acting as financial advisor to the special committee of independent directors in connection with the transaction. GulfStar Group was also engaged by the special committee to render a fairness opinion with respect to the transaction. Kelly Hart & Hallman LLP is serving as legal counsel to the special committee. Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal counsel to Wellspring.

In light of the merger agreement, OMNI will not hold its Annual Meeting of Shareholders previously scheduled for June 9, 2010. Instead, OMNI expects to hold a Special Meeting of the Shareholders to vote upon the approval of the merger agreement in the second half of 2010.

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