History
Dawson Operating Co tried twice to merge with TGC Industries, failed in 2011, succeeded in February 2015, and then became a subsidiary and left public reporting.
2011: A first merger with TGC falls through
In March 2011 Dawson agreed to buy TGC Industries by merging a subsidiary into it. TGC holders were to receive 0.188 Dawson shares for each TGC share, provided Dawson's average price stayed between $32.54 and $52.54. After the deal, Dawson holders would have owned about 68% and TGC holders about 32%. Two TGC directors, Wayne Whitener and Allen McInnes, were to join Dawson's board.
The path was bumpy. In late May the U.S. Justice Department's antitrust arm asked for more information, which pushed the timetable back. It closed its review without action on September 6. On June 30, Dawson also borrowed the full $16,426,680.06 from Western National Bank to buy 14,850 OYO GSR single-channel seismic units it had been leasing. The loan was due June 30, 2014, and nothing was drawn on its $20.0 million revolving line.
In October the two sides exchanged letters suggesting changes to the exchange ratio. Dawson's shareholders approved the share issue on October 27, but the 10-day average Dawson price on October 25 had fallen outside the $32.54 to $52.54 range. The parties could not agree on an adjusted ratio, and TGC ended the agreement on October 28. No shares were issued to TGC holders.
2012-2013: A quiet record, then a slowdown
The record for these years is thin. Shares on issue edged up from about 7.9 million at the end of 2010 to about 8.06 million by the end of 2013, and the disclosures do not explain the rise. In September 2013 Dawson warned that its crew use had fallen sharply, to the equivalent of eight data acquisition crews from thirteen in the prior quarter. It blamed projects not being ready, early completions in the prior quarter and a slowdown in requests for proposals. It expected 10 to 12 U.S. crews in the December quarter, and its order book supported thirteen U.S. crews and one Canadian crew in early 2014. Meanwhile, in December 2013 it took a $10.0 million Fourth Term Note from Western National Bank, at a fixed 3.16% and due December 2016, to buy recording equipment.
2014-2015: The second TGC merger
On October 8, 2014 Dawson signed a new merger agreement with TGC and its subsidiary Riptide Acquisition Corp. This time Dawson would become a wholly owned TGC subsidiary. Each Dawson share would convert into 1.760 TGC shares after a one-for-three TGC reverse split, and TGC would take the Dawson Geophysical name. Dawson holders would own about 66% of the combined company and TGC holders about 34%. Dawson insiders holding 2.40% agreed to vote in favour, as did TGC insiders holding 28.89% of TGC. A $2.0 million termination fee, plus up to $1.5 million of expenses, applied in certain takeover-proposal cases.
The registration statement became effective on December 31, 2014, and both companies set shareholder meetings for February 9, 2015. On January 7 shareholder Andrew Speese sued in federal court in the Western District of Texas, alleging directors breached their duties and that the filings were misleading. He sought to block the merger or win damages. Dawson's board formed a Special Litigation Committee, and the company said it would seek dismissal of the class claims.
The merger closed on February 11, 2015. Riptide merged into the company, which was renamed Dawson Operating Company and survived as a wholly owned subsidiary of the renamed Dawson Geophysical Company. Old Dawson holders ended with about 66% of roughly 21.6 million parent shares. Stephen Jumper stayed Chairman, President and CEO, and the fiscal year end moved from September 30 to December 31. Old Dawson stock was delisted, and on February 23, 2015 the company ended its registration and its reporting obligation. The filings do not say how the Speese lawsuit stood after closing.
Written from the 16 story beats below (2011 to 23 Feb 2015), which come from the company's own announcements and filings.