News Release Source: TGC Industries, Inc.
Dawson Geophysical and TGC Industries Enter into a Definitive Merger Agreement
Stock-For-Stock Transaction Valued at Approximately $157 Million
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MIDLAND, Texas, March 21, 2011/PR Newswire/ — Dawson Geophysical Company (Dawson) (NASDAQ: DWSN) and TGC Industries, Inc. (TGC) (NASDAQ: TGE) today announced they have entered into a merger agreement dated March 20, 2011 whereby Dawson will acquire TGC in a tax-free stock-for-stock transaction. The combined company will retain the Dawson name and trading symbol.
Based on the NASDAQ closing prices of Dawson and TGC shares on Friday, March 18, 2011, the transaction is valued at approximately $157 million, representing approximately $8.00 per TGC share.
Pursuant to the terms of the merger agreement, at the effective time of the merger, TGC shareholders will receive 0.188 shares of Dawson stock for every one share of TGC stock, provided that the average of the volume weighted average price of Dawson common stock on the NASDAQ during the ten consecutive trading days ending on the second business day prior to the date of the shareholders’ meetings of Dawson and TGC to be called for the purpose of approving the transaction is equal to or greater than $32.54 but less than or equal to $52.54. In the event that the average of the volume weighted average price of Dawson’s common stock is outside of that range, then the parties, at their respective option, shall be entitled to terminate the transaction following good faith negotiations to determine a modified, mutually acceptable exchange ratio. For the ten consecutive trading days ended March 18, 2011, the average of the volume weighted average price of Dawson’s common stock was $44.16.
At the closing of the transaction, it is anticipated that Dawson will issue approximately 3.7 million shares in exchange for the approximately 19.6 million shares of TGC stock outstanding. Upon completion of the transaction, Dawson will have approximately 11.7 million shares outstanding, with current Dawson shareholders owning approximately 68% of the combined company and current TGC shareholders owning approximately 32%.
Boards of Directors of both companies have approved the transaction, and directors and officers representing approximately 29% of TGC outstanding shares and approximately 4% of Dawson outstanding shares have agreed to vote in favor of the Merger.
The closing of the transaction is anticipated to be completed by late second quarter or early third quarter of 2011, subject to approval by holders of 80% of the outstanding shares of TGC and a majority of the Dawson shares present and voting at the special meeting, as well as certain other closing conditions and regulatory approvals.
Raymond James & Associates, Inc. served as financial advisor to Dawson while Southwest Securities, Inc. served as financial advisor to TGC.
Upon closing of the transaction, Wayne Whitener, President, CEO and Director of TGC, will join the Board of Directors of Dawson along with Allen T. McInnes, Ph.D., current TGC Director and Dean of the Texas Tech Jerry S. Rawls College of Business Administration. Mr. Whitener will continue as President and Chief Operating Officer of TGC, which after the transaction will be a wholly owned subsidiary of Dawson. Rob Wood, President of Eagle Canada, TGC’s wholly owned Canadian subsidiary, will remain in his role as President of Eagle Canada. Each of these named executives will enter into three-year employment agreements with the continuing entity.
Stephen Jumper, President and Chief Executive Officer of Dawson, said: “We are excited to welcome the shareholders of TGC as shareholders of Dawson. Likewise, we are excited to welcome the employees of TGC and its subsidiary Eagle Canada, Inc. to the Dawson family along with their respective clients.”
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