UNION DRILLING INC

UNION DRILLING INC deregistered its securities, ending its obligation to file reports with the SEC.

listing compliance notice

The Sidewinder deal closed on Nov 5, 2012: Fastball merged into Union, which is now a wholly owned subsidiary of Sidewinder (Avista affiliates). The tender offer shares were accepted and paid for at $6.50 cash, and because Sidewinder's merger sub then owned over 90% of the shares, the merger followed. This completes the sale and ends the open merger thread. Union's old stock position is converted to the cash price (the visible text does not give the remaining merger mechanics, as it is truncated). The filing also describes new financing: a $50.0M PNC-led senior secured revolving facility (5-year maturity) with Sidewinder, Crown Drilling of Pennsylvania and Union as borrowers, and Union guaranteeing Sidewinder's $250M 9.750% senior notes due 2019 (issued Nov 2, 2012). Items 3.01, 3.03, 5.01, 5.02, 5.03 are listed but their text is cut off, so delisting and leadership/charter changes are not detailed here.

business combination

Union's Amendment No. 5 confirms the offer results: 16,405,502 shares (about 76.67%) tendered by the Nov 2 2012 midnight expiry, and about 91.78% fully diluted counting the support-agreement shares. A short-form merger is planned for about Nov 5 2012 with no shareholder meeting; remaining shares become the right to $6.50 cash (appraisal rights aside), Union becomes a wholly-owned Sidewinder subsidiary, and the stock stops trading on NASDAQ.

business combination

Sidewinder's final amendment reports the tender offer expired at midnight Nov 2 2012 with 16,405,502 shares tendered (about 76.67% of outstanding shares), including 176,042 through guaranteed delivery. With the shares to be contributed under the support agreements, the total is about 91.78% on a fully diluted basis, above the 67.2% minimum. All validly tendered shares were accepted for payment, and Sidewinder plans a short-form merger on or about Nov 5 2012 without a shareholder meeting. Shares not tendered will be converted into $6.50 cash each (except for those exercising appraisal rights), Union will become a wholly-owned Sidewinder subsidiary, and the shares will stop trading on NASDAQ. This resolves the open tender-result and closing threads.

business combination

UNION DRILLING INC's exchange filed to remove a class of its securities from listing.

listing compliance notice

Sidewinder's Amendment No. 3 says the shareholder lawsuits over the $6.50 deal (Hall and Patel, consolidated by court order on Oct 17 2012) have reached an agreement in principle to settle (memorandum of understanding, Oct 18). Union agreed to make extra disclosures, and the plaintiffs will drop their effort to block the deal before the Oct 29 hearing. The settlement is conditioned on the merger closing, further discovery, class certification and court approval, and defendants still deny wrongdoing. This resolves the injunction threat in the open litigation thread; the settlement itself is not yet final. The filing also adds that Steven Webster beneficially owns 556,728 shares (about 2.6%) and gives more background on lender Jefferies' concern about the minimum tender threshold, which led the parties to reconsider the structure.

business combination

Union's Amendment No. 3 to its tender offer response adds detail on how the sale came about, in response to scrutiny of the process. It says that over 2011 and early 2012 Union and RBC contacted or heard from 16 parties (12 potential strategic buyers, 4 financial); five signed confidentiality agreements, including Avista. An earlier all-stock approach from 'Bidder A' was judged financially unattractive because of a low premium and its stock looking overvalued relative to Union's; other bidders declined or never made an offer. The board said it believed the shares were not fully valued and that Union faced substantial challenges as a standalone company. The excerpt is truncated, so further amendments in this filing are not visible. The deal remains pending.

business combination

Union reported that the antitrust waiting period for the Sidewinder deal ended early: Avista Capital Partners III and Union were granted early termination on Oct 16, 2012, after the filing was made on Oct 9. This satisfies the offer's antitrust (HSR) condition, resolving that open item; the minimum-tender condition and the closing remain pending, and the offer is still $6.50 per share in cash.

business combination

Union amended its tender offer response to update the shareholder lawsuits over the $6.50-per-share Sidewinder deal. The Van Hall suit (filed Oct 3, amended Oct 9) alleges the board breached its duties, the price undervalues Union, the sale process was flawed and the 14D-9 omitted material information; it seeks to block the deal. A court order of Oct 11 sets a hearing on a preliminary injunction for Oct 29, 2012, and a second similar suit (Patel, filed Oct 12) is to be consolidated with it. Union and the other defendants say the suits are meritless and will be defended; the offer is still scheduled to expire Nov 2 unless extended.

business combination

Sidewinder's subsidiary Fastball Acquisition formally started the tender offer on Oct 5 2012, offering $6.50 per share in cash for all Union shares, with Avista funds named as the controlling sponsors. The filing mostly points to the Offer to Purchase for the details. Its fee table values the deal at about $145.0 million, which differs from the earlier $242 million headline figure; the filing gives the basis as 21,398,534 shares plus 915,591 option shares, so the two figures use different measures. Listed exhibits include financing commitment letters from Jefferies Finance (Sep 24) and PNC Bank (Sep 28), and the Van Hall shareholder lawsuit filed Oct 3 in Tarrant County, Texas. This resolves the open question of the offer's commencement; the offer remains pending.

business combination

Union filed its formal Schedule 14D-9, responding to the tender offer that started Oct 5 2012 at $6.50 per share in cash (Offer to Purchase dated Oct 5). It repeats the merger mechanics (top-up option, short-form merger at 90%, appraisal rights for those who qualify) and says 21,398,534 shares were outstanding on Oct 4 2012. Directors and executive officers held 132,895 shares worth about $863,820 at the offer price, and about $311,186 for in-the-money options, which are cashed out in the merger. UDC LLC's 7,955,395 shares would bring $51,710,068 if tendered. The excerpt shown is truncated, so the board's stated recommendation reasons are not visible here, though the earlier announcement said the board unanimously recommends the offer. A Texas shareholder lawsuit (Van Hall, filed Oct 3 2012) is listed as an exhibit, which is a new item. Shareholders still hold their shares; the offer is pending.

business combination

This 8-K gives the full terms of the Sidewinder deal announced Sep 25 2012 (merger agreement dated Sep 24). Fastball Acquisition will offer $6.50 cash per share, then merge into Union, which would survive as a wholly-owned Sidewinder subsidiary. The minimum tender condition is 67.2% of fully diluted shares (counting shares contributed to Sidewinder), and HSR clearance is also required; financing is not a condition. Union Drilling Company LLC (about 36%) and the executive officers (under 1%) agreed to tender, and 'Rollover Stockholders' (about 15%) agreed not to tender but to contribute shares to Sidewinder for equity in it. If the offer falls short, a shareholder vote can still complete the merger, and a top-up option aims to reach 90% for a short-form merger. A $5 million fee is payable by Union on certain terminations, such as accepting a superior proposal, and $10 million by Sidewinder in others; Union may owe up to $2 million of Sidewinder's expenses in some cases. This fills in the content of the Sep 28 8-K referenced by the earlier 14D-9C. The deal is still pending.

business combination

On September 25, 2012 Union announced a merger agreement under which Sidewinder Drilling (controlled by Avista Capital Partners), through its subsidiary Fastball Acquisition, will make a cash tender offer of $6.50 per share, valued at about $242 million. The offer requires 67.2% of shares on a fully diluted basis to be tendered, and holders of 51% of shares have signed voting agreements; closing is expected in the fourth quarter of 2012, and a one-step merger with a shareholder vote is the fallback. The board unanimously recommends the offer. The deal is pending, so shareholders still hold their shares for now.

business combination

On July 5, 2011 Union agreed to buy two IDE-1500 Sparta Series AC electric rigs and related equipment from Integrated Drilling Equipment Company Holdings for about $35 million, with deliveries in January and February 2012. The 8-K says they are for an existing customer's program in the Arkoma Basin, while the press release says Arkansas' Fayetteville Shale and cites executed three-year contracts; the filings differ on the location description. The CEO said this is the kind of investment the expanded credit facility was meant for.

material agreement

On April 27, 2011 Union replaced its PNC-led credit agreement with an Amended and Restated agreement running to April 27, 2016, with a $125 million commitment (up to $150 million if increased). It is secured by a first-priority lien on the company's assets and carries lower stated starting margins than the 2008 amendment (0.75% over prime, 2.50% over LIBOR). This replaces the facility that was due to expire March 30, 2012 under the seventh amendment.

debt financing

On June 4, 2009 Union agreed with Jefferies & Company to sell 3,000,000 new shares to the public at $8.25 per share (plus up to 450,000 more if the over-allotment option is used), expected to close June 10, 2009. The press release says proceeds will repay borrowings under its revolving credit facility. This uses the shelf registration filed in 2008 and adds shares, which dilutes existing holders.

material agreement

On September 30, 2008 Union signed a seventh amendment to its PNC Bank-led credit agreement, extending it to March 30, 2012 with a $67.5 million commitment (up to $100 million if more lenders join). The Amendment also sets new interest margins and unused-line fees, and removes The CIT Group/Business Credit and National City Business Credit as lenders. This follows the sixth amendment of July 2008; the commitment now stated is lower than the previous $100 million maximum line unless more lenders join.

debt financing

Union signed a sixth amendment to its PNC Bank revolving credit agreement that permits, subject to conditions, share repurchases and cash dividends, removes the annual capital spending cap after June 30, 2008, and revises the fixed charge coverage ratio. Second-quarter 2008 results: revenue $75.4 million (up 2%), net income $3.4 million or $0.15 per share (down from $9.2 million, $0.42), which management attributed to rising costs and competition limiting dayrate increases. It also mentions buying a 1,000 horsepower Barnett Shale rig and ordering two DC electric rigs for the Fayetteville Shale.

material agreement

Union agreed on January 4, 2008 to buy a 1,600 horsepower AC Quicksilver drilling rig and related equipment from IDM Equipment, LLC for about $17 million, with delivery by May 31, 2008. It intends to use it for an existing customer's drilling program in the Appalachian Basin; the press release adds a customer commitment to a three-year contract, targeting the Marcellus Shale in Pennsylvania. The company owns 71 rigs.

material agreement

Union and PNC Bank (as agent for the lenders) signed a fifth amendment to the revolving credit facility, raising the maximum revolving line of credit to $100 million. It also redefines some terms, adds conditions on yearly capital spending and changes lender assignment provisions.

material agreement

Union exercised its option from the December 2005 agreement and agreed to buy three 1,500 horsepower SRC IDEAL rigs from National Oilwell Varco, L.P. for $25.2 million, with the earlier $1 million option payment applied to the price. Delivery is scheduled for October, November and December 2006.

material agreement

Union Drilling agreed to buy three Ideal Rigs from National-Oilwell, L.P. for $24 million in total, with delivery scheduled for March, May and June 2006. It also paid $1 million for an option, exercisable by April 30, 2006, to buy three more for $25.2 million (delivery Sept-Nov 2006 if exercised); the $1 million counts toward that price.

material agreement

Union Drilling signed the underwriting agreement for the follow-on share sale whose final prospectus was filed the same week: 8,823,530 shares, half sold by the company and half by two selling stockholders, offered to the public at $14.00 per share (underwriters pay $13.055). One selling stockholder gave the underwriters an option for up to 1,323,530 more shares; delivery is expected November 28, 2005. Only half of the shares are sold by the company, so the company receives only part of the proceeds. The filing also restates a 180-day lock-up ending May 20, 2006 on sales by the company, principal shareholders, officers and directors.

material agreement