Superior Drilling Products, Inc. (NYSE American: SDPI) (“SDPI”)
announced today the preliminary results of the elections made by
holders of SDPI common stock regarding the form of merger
consideration to be received in connection with the pending
acquisition of SDPI (the “Transaction”) of Drilling Tools
International Corporation (NASDAQ: DTI) (“DTI”).
On July 29, 2024, the shareholders of SDPI approved the
transactions contemplated by the Agreement and Plan of Merger
entered into on March 6, 2024 among DTI, SDPI, DTI Merger Sub I,
Inc., a Delaware corporation and direct wholly owned subsidiary of
DTI (“Merger Sub I”), and DTI Merger Sub II, LLC, a Delaware
limited liability company and direct wholly owned subsidiary of DTI
(“Merger Sub II”), pursuant to which, among other things, and upon
the terms and subject to the conditions set forth in the Merger
Agreement, (a) Merger Sub I will merge with and into SDPI (the
“First Merger”), with SDPI surviving as a wholly owned subsidiary
of DTI, and (b) upon the effective time of the First Merger (the
“First Effective Time”), SDPI, as the surviving corporation of the
First Merger, will merge with and into Merger Sub II (the “Second
Merger,” and, together with the First Merger, the “Merger”), with
Merger Sub II surviving as a wholly owned subsidiary of DTI.
Pursuant to the Merger Agreement, at the First Effective Time,
each share of SDPI common stock, par value $0.001 per share (the
“SDPI Common Stock”), issued and outstanding immediately prior to
the First Effective Time was converted into the right to receive,
without interest, at the election of the holder thereof, subject to
the proration provisions of the Merger Agreement, (a) for each
share of SDPI Common Stock with respect to which an election to
receive cash had been made and not revoked or lost (a “Cash
Election Share”), $1.00 in cash (the “Cash Election
Consideration”), (b) for each share of SDPI Common Stock with
respect to which an election to receive stock had been made and not
revoked or lost (each, a “Stock Election Share”), 0.313 validly
issued, fully paid, and non-assessable shares of common stock, par
value $0.0001 per share (the “DTI Common Stock”), of DTI (the
“Stock Election Consideration,” and together with the Cash Election
Consideration, the “Merger Consideration”), and (c) for each share
of SDPI Common Stock with respect to which no election to receive
Cash Election Consideration or the Stock Election Consideration had
been made (a “No Election Share”), the Cash Election Consideration
or the Stock Election Consideration, as provided in the proration
mechanics described below.
Pursuant to the terms of the Merger Agreement, (a) if the
product obtained by multiplying the aggregate number of Stock
Election Shares by 0.313 (the “Stock Election Multiplier” and such
product, the “Aggregate Stock Elections”) exceeded 4,845,240 (the
“Maximum Share Amount”), (i) all Cash Election Shares and No
Election Shares were to be exchanged for the Cash Election
Consideration, and (ii) a portion of the Stock Election Shares of
each holder thereof was to be exchanged for the Stock Election
Consideration, with such portion being equal to the product
obtained by multiplying the number of such holder’s Stock Election
Shares by a fraction, the numerator of which is the Maximum Share
Amount and the denominator of which is the Aggregate Stock
Elections, with the remaining portion of such holder’s Stock
Election Shares being exchanged for the Cash Election
Consideration, (b) if the Aggregate Stock Elections was less than
4,112,752 (the “Minimum Share Amount” and the difference between
the Minimum Share Amount and the Aggregate Stock Elections, the
“Shortfall Amount”), then (i) first, if the Shortfall Amount is
smaller than or equal to the number of No Election Shares
multiplied by 0.313 (the “No Election Share Amount”), then: (A) the
Cash Election Shares were to be received in cash as they have
elected and will not be affected by the adjustment; and (B) the No
Election Shares held by shareholders were to be exchanged for the
Stock Election Consideration equal to the product of (1) the number
of No Election Shares of such holder and (2) a fraction, the
numerator of which is the Shortfall Amount and the denominator of
which is the No Election Share Amount, with the remaining portion
of such holder’s No Election Shares receiving the Cash Election
Consideration, and (ii) second, if the Shortfall Amount exceeded
the No Election Share Amount, then (Y) all No Election Shares were
to be exchanged for the Stock Election Consideration and (Z) the
Cash Election Shares held by stockholders were to be exchanged for
the Stock Election Consideration, with such portion being equal to
the product of (x) the number of Cash Election Shares of such
holder and (y) a fraction, the numerator of which is the amount by
which the Shortfall Amount exceeded the No Election Share Amount,
and the denominator of which is the product of the aggregate number
of Cash Election Shares and the Stock Election Multiplier, with the
remaining portion of such holder’s Cash Election Shares receiving
the Cash Election Consideration, and (iii) if the Aggregate Stock
Elections is (x) equal to the Maximum Share Amount, (y) less than
the Maximum Share Amount but greater than the Minimum Share Amount,
or (z) equal to the Minimum Share Amount, then (1) all Cash
Election Shares and No Election Shares were to be exchanged for the
Cash Election Consideration and (2) all Stock Election Shares will
be exchanged for the Stock Election Consideration.
Based on available information as of the election deadline of
5:00 p.m., New York time, on July 29, 2024, the preliminary merger
consideration election results were:
- Holders of approximately 80.5% of the outstanding shares of
SDPI Common Stock, or 24,464,146 shares, elected to receive the
Stock Election Consideration.
- Holders of approximately 5.3% of the outstanding shares of SDPI
Common Stock, or 1,605,736 shares, elected to receive the Cash
Election Consideration.
- Holders of approximately 14.2% of the outstanding shares of
SDPI Common Stock, or 4,321,362 shares, made no election, and as a
result, will receive the Cash Election Consideration.
Because the Maximum Share Amount was exceeded, holders of SDPI
Common Stock who elected to receive all Stock Election
Consideration will receive a portion of their Merger Consideration
in Cash Election Consideration.
The foregoing results are preliminary only, and final certified
results are not expected to be available until shortly before
closing. After the final results of the election process are
determined, the final merger consideration, and the allocation of
the merger consideration, will be calculated in accordance with the
terms of the Merger Agreement. No fractional shares of DTI Common
Stock will be issued in the merger, and holders of SDPI Common
Stock will receive cash in lieu of any fractional shares of DTI
Common Stock.
A more detailed description of the merger consideration and the
proration procedures applicable to elections is contained in the
definitive proxy statement/prospectus was sent to stockholders of
SDPI on or about July 2, 2024. SDPI stockholders should carefully
read the definitive proxy statement/prospectus in its entirety.
About Drilling Tools International
Corporation
Drilling Tools International is a Houston, Texas based leading
oilfield services company that manufactures and rents downhole
drilling tools used in horizontal and directional drilling of oil
and natural gas wells. With roots dating back to 1984, DTI operates
from 16 service and support centers across North America and
maintains 7 international service and support centers across Europe
and the Middle East; and maintain a large fleet of rental
equipment, with over 65,000 tools for use in horizontal and
directional drilling, as well as surface control equipment. To
learn more about DTI, visit www.drillingtools.com.
About Superior Drilling Products,
Inc.
SDPI is an innovative, cutting-edge drilling tool technology
company providing cost saving solutions that drive production
efficiencies for the oil and natural gas drilling industry. The
Company designs, manufactures, repairs, and sells drilling tools.
SDPI drilling solutions include the patented Drill-N-Ream® well
bore conditioning tool and the patented Strider™ oscillation system
technology. In addition, SDP is a manufacturer and refurbisher of
PDC (polycrystalline diamond compact) drill bits for leading oil
field service companies. SDPI operates a state-of-the-art drilling
tool fabrication facility, where it manufactures its solutions for
the drilling industry, as well as customers’ custom products.
Additional information about SDPI can be found at:
www.sdpi.com.
Additional Information for Superior
Drilling Products, Inc. Shareholders and Where to Find
It
This press release relates to a proposed acquisition of Superior
Drilling Products, Inc. by Drilling Tools International
Corporation. In connection with the transaction, DTI filed a
registration statement on Form S-4 which includes a document that
serves as a prospectus of DTI and a proxy statement of SDPI (the
“proxy statement/prospectus”), and each party has filed and will
file other relevant documents regarding the transaction with the
Securities and Exchange Commission (the “SEC”). INVESTORS AND
SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS
AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN
THEIR ENTIRETY, INCLUDING THE SCHEDULE 13E-3, BECAUSE THEY CONTAIN
IMPORTANT INFORMATION. A definitive proxy statement/prospectus was
sent to stockholders of SDPI on or about July 2, 2024. Investors
and security holders can obtain free copies of the registration
statement and the proxy statement/prospectus and other relevant
documents filed with the SEC through the website maintained by the
SEC at http://www.sec.gov. Copies of
the documents filed with the SEC by DTI are available free of
charge on the DTI website at www.drillingtools.com or by contacting DTI by
email at InvestorRelations@drillingtools.com or by mail at
3710 Briarpark Drive, Suite 150, Houston, TX 77042. Copies of the
documents filed with the SEC by SDPI are available free of charge
on the SDPI website at https://sdpi.com or by contacting SDPI by email at
dpawlowski@keiadvisors.com or by mail
at 1583 S. 1700 E., Vernal, UT 84078.
Participants in the
Solicitation
DTI and SDPI and their respective directors and executive
officers and other members of management and employees may be
deemed to be participants in the solicitation of proxies from the
SDPI stockholders in connection with the proposed transaction.
Information about the directors and executive officers of DTI is
set forth in its Annual Report on Form 10-K for the year ended
December 31, 2023, which was filed with the SEC on March 28, 2024,
its Proxy Statement for its 2024 Annual Meeting Stockholders, which
was filed with the SEC on April 2, 2024 and in other documents
filed with the SEC by DTI and its executive officers and directors.
Information about the directors and executive officers of SDPI is
set forth in its Annual Report on Form 10-K for the year ended
December 31, 2023, which was filed with the SEC on March 7, 2024,
its Proxy Statement for its 2023 Annual Meeting Stockholders, which
was filed with the SEC on June 30, 2023, and in other documents
filed with the SEC by SDPI and its executive officers and
directors.
These documents can be obtained free of charge from the sources
indicated above. Additional information regarding the participants
in the proxy solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, is contained
in the proxy statement/prospectus and Schedule 13e-3 and other
relevant materials in connection with the transaction which were
filed with the SEC. Information concerning the interests of the
participants in the solicitation, which may, in some cases, be
different than those of SDPI’s shareholders generally, is set forth
in the prospectus/proxy statement relating to the proposed
transaction and the Schedule 13e-3 . Investors should read the
proxy statement/prospectus and Schedule 13e-3 carefully before
making any voting or investment decisions.
Forward-Looking
Statements
This press release may include, and oral statements made from
time to time by representatives of DTI and SDPI may include,
“forward-looking statements.” Statements regarding the business
combination and the financing thereof, and related matters, as well
as all other statements other than statements of historical fact
included in this press release are forward-looking statements. The
words “anticipate,” “believe,” “continue,” “could,” “estimate,”
“expect,” “intends,” “may,” “might,” “plan,” “possible,”
“potential,” “predict,” “project,” “should,” “will,” “would” and
similar expressions may identify forward-looking statements, but
the absence of these words does not mean that a statement is not
forward looking. These forward-looking statements include, but are
not limited to, statements regarding the proposed transaction,
including any statements regarding the expected timetable for
completing the proposed transaction, benefits of the proposed
transaction, and DTI and its management team’s expectations, hopes,
beliefs, intentions or strategies regarding the future. In
addition, any statements that refer to projections, forecasts or
other characterizations of future events or circumstances,
including any underlying assumptions, are forward-looking
statements. Forward looking statements in this press release may
include, for example, statements about: (1) the demand for DTI’s
products and services, which is influenced by the general level
activity in the oil and gas industry; (2) DTI’s ability to retain
its customers, particularly those that contribute to a large
portion of its revenue; (3) DTI’s ability to remain the sole North
American distributor of the Drill-N-Ream; (4) DTI’s ability to
employ and retain a sufficient number of skilled and qualified
workers, including its key personnel; (5) DTI’s ability to market
its services in a competitive industry; (9) DTI’s ability to
execute, integrate and realize the benefits of acquisitions, and
manage the resulting growth of its business; (6) potential
liability for claims arising from damage or harm caused by the
operation of DTI’s tools, or otherwise arising from the dangerous
activities that are inherent in the oil and gas industry; (7) DTI’s
ability to obtain additional capital; (8) potential political,
regulatory, economic and social disruptions in the countries in
which DTI conducts business, including changes in tax laws or tax
rates; (9) DTI’s dependence on its information technology systems,
in particular Customer Order Management Portal and Support System,
for the efficient operation of DTI’s business; (10) DTI’s ability
to comply with applicable laws, regulations and rules, including
those related to the environment, greenhouse gases and climate
change; (11) DTI’s ability to maintain an effective system of
disclosure controls and internal control over financial reporting;
(12) the potential for volatility in the market price of DTI’s
common stock; (13) the impact of increased legal, accounting,
administrative and other costs incurred as a public company,
including the impact of possible shareholder litigation; (14) the
potential for issuance of additional shares of DTI’s common stock
or other equity securities; (15) DTI’s ability to maintain the
listing of its common stock on Nasdaq; (16) the conditions to the
completion of the proposed transaction, including obtaining SDPI
shareholder approval and the regulatory approvals required for the
transaction on the anticipated schedule or at all, (17) financing
for the transaction may not be obtained by DTI on favorable terms
or at all, (18) the closing of the proposed transaction may not
occur or could be delayed, either as a result of litigation related
to the transaction or otherwise or result in significant costs of
defense, indemnification, and liability, (19) the risk that the
cost savings and any other synergies from the SDPI transaction may
not be fully realized by DTI or may take longer or cost more to be
realized than expected, including that the SDPI transaction may not
be accretive to DTI within the expected timeframe or the extent
anticipated, (20) completing the SDPI transaction may distract DTI
and SDPI management from other important matters, (21) the
possibility that any or all of the various conditions to the
consummation of the proposed transaction may not be satisfied or
waived, including the failure to receive any required regulatory
approvals from any applicable governmental entities (or any
conditions, limitations or restrictions placed on such approvals),
(22) the possibility that competing offers or acquisition proposals
for SDPI will be made, (23) the occurrence of any event, change or
other circumstance that could give rise to the termination of the
definitive transaction agreement relating to the proposed
transaction, including in circumstances, which would require a
party to pay a termination fee, (24) the effect of the announcement
or pendency of the proposed transaction on SDPI’s ability to
attract, motivate or retain key executives and employees, its
ability to maintain relationships with its customers, suppliers and
other business counterparties, or its operating results and
business generally, (25) risks related to the proposed transaction
diverting management’s attention from SDPI’s or DTI’s ongoing
business operations, (26) the amount of costs, fees and expenses
related to the proposed transaction, (26) the risk that SDPI’s or
DTI’s stock price may decline significantly if the proposed
transaction is not consummated, (27) the risk of shareholder
litigation in connection with the proposed transaction, including
resulting expense or delay, and (28) other risks and uncertainties
separately provided to you and indicated from time to time
described in filings and potential filings by DTI and SDP with the
SEC.
You should carefully consider the risks and uncertainties
described in the information presented in DTI’s Annual Report on
Form 10-K for the year ended December 31, 2023 filed March 28, 2024
and the Quarterly Report on Form 10-Q for the period ended March
31, 2024 filed May 16, 2024 and SDPI’s Annual Report on Form 10-K
for the year ended December 31 2023 filed March 15, 2024 and its
Quarterly Report on Form 10-Q for the quarter ended March 31, 2024
and filed May 15, 2024. Such forward-looking statements are based
on the beliefs of management of DTI and SDPI, respectively, as well
as assumptions made by, and information currently available to
DTI’s and SDPI’s management, respectively. Actual results could
differ materially from those contemplated by the forward-looking
statements as a result of certain factors detailed above and in the
prospectus/proxy statement and other filings by DTI or SDPI with
the SEC. All subsequent written or oral forward-looking statements
attributable to DTI, SDPI or persons acting on their respective
behalf are qualified in their entirety by this paragraph.
Forward-looking statements are subject to numerous conditions, many
of which are beyond the control of each of DTI and SDPI, including
those set forth or to be set forth in the Risk Factors section of
the prospectus/proxy statement, and described in the other filings
by DTI and SDPI with the SEC. Neither DTI nor SDPI undertake any
obligation to update these statements for revisions or changes
after the date of this release, except as required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240730721591/en/
DTI Investor Relations Ken Dennard
/ Rick Black InvestorRelations@drillingtools.com SDPI Investor Relations Deborah K. Pawlowski /
Craig P. Mychajluk Kei Advisors LLC 716-843-3908 / 716-843-3832
dpawlowski@keiadvisors.com / cmychajluk@keiadvisors.com
Grafico Azioni Drilling Tools (NASDAQ:DTI)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Drilling Tools (NASDAQ:DTI)
Storico
Da Gen 2024 a Gen 2025
