Dawson Geophysical and TGC Industries Enter into a Definitive Merger Agreement
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Dawson Geophysical Co.
508 Westwall, Suite 800
Midland, TX, 79701
Press release date: March 21, 2011
Stock-for-Stock Transaction Valued at Approximately $157 Million
MIDLAND, Texas, March 21, 2011 - 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."
Jumper continued: "We believe the combination of these companies provides opportunities to better serve the combined company's expanded client base with higher channel count capacity, greater geographic diversification of the combined entity operations and blending of operational, technical and regional expertise. With the ability to share equipment and personnel resources, the combined companies will be able to provide its clients with the required channel counts to produce higher resolution images, enhanced efficiencies related to logistical improvements of crew timing while increasing utilization rates for all crews with an expanded order book."
Wayne Whitener, President and Chief Executive Officer of TGC, said: "We are pleased to join forces with Dawson Geophysical to create a strong and more dynamic organization capable of providing a multitude of seismic and geophysical services to our combined client base. We are excited about the market position and growth potential of Dawson Geophysical going forward. This transaction is a clear win-win for our shareholders, clients and employees. I look forward to our contributing to the success of the combined organization."
Jumper concluded: "The timing of this transaction creates an expanded opportunity to benefit all of our clients as demand for advanced seismic services continues to increase in the lower 48 states and Canada. The combined operating platform - services, people and equipment - positions our shareholders and employees to capture any upside in the onshore North American seismic market."
Dawson and TGC have scheduled a conference call to discuss the transaction for Monday, March 21, 2011, at 8:30 a.m. Eastern Time / 7:30 a.m. Central Time. To participate in the conference call, dial 866-322-9730 and use passcode 53785025 at least 10 minutes before the call begins and ask for the Dawson Geophysical / TGC Industries conference call. A replay of the call will be available approximately two hours after the live broadcast ends and will be accessible through March 23, 2011. To access the replay, dial 800-642-1687 using a passcode of 53785025. Any materials to be utilized by Dawson and TGC during the conference call will be posted to their respective websites at http://www.dawson3d.com and http://www.tgcseismic.com.
Investors, analysts, and the general public will also have the opportunity to listen to the conference call over the Internet by visiting http://www.dawson3d.com or http://www.tgcseismic.com. For those who cannot listen to the live webcast, an archive will be available shortly after the call and will remain available for approximately twelve months on both above-mentioned websites.
About Dawson Geophysical
Dawson Geophysical Company is the leading provider of U.S. onshore seismic data acquisition services as measured by the number of active data acquisition crews. Founded in 1952, Dawson acquires and processes 2D, 3D and multi-component seismic data solely for its clients, ranging from major oil and gas companies to independent oil and gas operators as well as providers of multi-client data libraries.
About TGC Industries
TGC Industries, Inc., based in Plano, Texas, is a provider of seismic data acquisition services with operations throughout the continental United States and Canada. The Company has branch offices in Houston, Midland, Oklahoma City and Calgary.
Web Site: http://www.tgcseismic.com