HOUSTON, Feb. 12 /PRNewswire/ -- Universal Compression Holdings, Inc.
(NYSE: UCO) today announced it has completed its acquisition of Weatherford
Global Compression Services, L.P. ("WGC"), the gas compression business of
Weatherford International, Inc. (NYSE: WFT).
The combined Company is the second largest natural gas compression service
provider in the world, with a fleet consisting of approximately
1,800,000 horsepower. Domestically, Universal will own approximately
1,550,000 horsepower, and will operate in every major gas-producing region in
the lower 48 states. Internationally, the Company will own 250,000 horsepower
in 9 countries.
Pursuant to the terms of the merger agreement, Enterra Compression
Company, a subsidiary of Weatherford International, merged with and into
Universal Compression, Inc., the operating subsidiary of Universal Compression
Holdings. As consideration for the merger, Weatherford received
13,750,000 shares of newly issued restricted Universal Holdings common stock,
which represents approximately 48% of Universal's total outstanding shares.
In connection with the acquisition, Weatherford has agreed, subject to certain
conditions, to limit its voting rights to 33 1/3% of Universal's total voting
power for up to two years. In addition, Universal restructured WGC's current
debt and operating leases totaling approximately $323 million.
Universal expects to realize annual cost savings and other synergies of
approximately $20 million by the end of fiscal 2002, primarily through
consolidation and streamlining operations, especially in the U.S. The
transaction will be accounted for using the purchase accounting method and is
expected to be immediately accretive to earnings.
"The combination with Weatherford Global greatly improves our ability to
meet our customers' compression needs while expanding our presence in growing
international markets including Canada, as well as important segments of the
U.S. market such as the Gulf of Mexico," said Stephen A. Snider, Universal's
President and CEO. "This addition greatly improves our parts and services
business while adding significant horsepower to our domestic and international
fleet. We're excited about the quality people and equipment we've added to
Universal and believe the level of service we can offer our customers will
continue to improve as a result."
Universal also announced the completion of the financing transactions
associated with the WGC acquisition concurrently with the acquisition. The
Company raised $427 million under a new operating lease facility funded
primarily through an offering of $350 million of 8 7/8% Senior Secured Notes
due 2008 by an unaffiliated entity. The Company also entered into a new
$125 million secured revolving credit facility, and a new $200 million
asset-backed securitization operating lease facility (the "ABS Operating Lease
Facility"). At the closing, Universal funded approximately $80 million under
the ABS Operating Lease Facility and had no amounts under the new revolving
credit facility. The proceeds from the two new operating lease facilities
were used to restructure operating lease obligations and refinance certain
indebtedness of Universal and WGC.
In connection with the merger, the size of the Company's Board of
Directors has been increased from eight to eleven members to accommodate the
three Board members designated by Weatherford pursuant to the merger
agreement. The Company has appointed Bernard J. Duroc-Danner -- Chairman and
CEO of Weatherford International, Inc.; Curtis W. Huff -- President, Chief
Executive Officer and Director of Grant Prideco, Inc. and former Executive
Vice President, Chief Financial Officer and General Counsel of Weatherford
International, Inc.; and Uriel E. Dutton -- Partner at Fulbright & Jaworski
L.L.P to the Universal Board.
The notes being issued have not been registered under the Securities Act
of 1933 or state securities laws and may not be offered or sold in the United
States absent registration or an applicable exemption from registration
requirements. This communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, including the notes.
Universal is headquartered in Houston, Texas and is a leading natural gas
compression services company providing a full range of rental, sales,
operations, maintenance and fabrication services and products to the domestic
and international natural gas industry.
Statements about Universal's outlook and all other statements in this
release other than historical facts are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements rely on a number of assumptions concerning future
events and are subject to a number of uncertainties and factors, many of which
are out of Universal's control, that could cause actual results to differ
materially from such statements. While Universal believes that the assumption
concerning future events are reasonable, it cautions that there are inherent
difficulties in predicting certain important factors that could impact future
performance and the successful integration of the business. Such risks and
uncertainties include, but are not limited to, the integration of acquired
businesses (including WGC), costs and other difficulties related to the
merger, future financial and operational results, competition, general
economic conditions, ability to manage and continue growth, and risks
associated with international operations. These factors are discussed in more
detail in Universal's filings with the Securities and Exchange Commission,
copies of which are available to the public. Universal disclaims any
intention or obligation to revise any forward-looking statements, whether as a
result of new information, future events, or otherwise.
SOURCE Universal Compression Holdings, Inc.
CONTACT: Manager-Investor Relations, Jeffrey Todd of Universal Compression Holdings, Inc., 713-335-7464