Current Report Filing (8-k)
March 14 2014 - 4:23PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): March 10, 2014
Nuverra Environmental Solutions, Inc.
(Exact Name of Registrant as Specified in Charter)
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Delaware |
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001-33816 |
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26-0287117 |
(State or Other Jurisdiction
of Incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
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14624 N. Scottsdale Road, Suite #300, Scottsdale, Arizona |
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85254 |
(Address of Principal Executive Offices) |
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(Zip Code) |
Registrants telephone number, including area code: (602) 903-7802
Not Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2.):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement
On March 10, 2014, Nuverra Environmental Solutions, Inc., a Delaware corporation (the Company), and VeroLube USA, Inc., a
Texas corporation (the Buyer), entered into a Stock Purchase Agreement (the Agreement) pursuant to which the Buyer will acquire (the Acquisition) all of the issued and outstanding shares of Thermo Fluids, Inc., a
Delaware corporation (TFI) and a wholly-owned subsidiary of the Company.
Under the terms of the Agreement, the Buyer would
pay an aggregate amount of consideration worth approximately $175 million (the Purchase Price), consisting of a combination of $165 million in cash and $10 million in equity in Buyers parent, VeroLube Inc, a corporation organized
under the Canada Business Corporations Act (the Buyer Parent), based on the price at which equity of the Buyer Parent is sold in a private placement being conducted by Parent to raise capital for the transactions contemplated by the
Agreement. The Purchase Price is subject to adjustment based on the working capital and cash position of TFI at the closing of the Acquisition.
The Agreement contains customary representations and warranties by the Company, covenants by the Company regarding the operation of the TFI
business between the date of signing of the Agreement and the closing date of the Acquisition, and indemnification provisions whereby the Company will indemnify the Buyer and affiliated parties for breaches of representations and warranties,
breaches of covenants and certain other matters. The representations and warranties set forth in the Agreement generally survive for eighteen (18) months following the closing of the Acquisition, with longer survival periods with respect to
certain fundamental representations and warranties. The Companys indemnification obligations are subject to a deductible of $1 million with an indemnity cap of $17.5 million. However, the deductible and cap on indemnification do not apply with
respect to breaches of the fundamental representations and warranties described above, breaches of covenants and certain other matters, including certain provisions contained in the Agreement with respect to the post-closing collection of accounts
receivable.
The Buyer and the Company have agreed that $17.5 million of the cash portion of the Purchase Price will be placed in escrow
at the closing of the Acquisition as security for the Companys indemnification and other potential obligations under the Agreement. Any amounts remaining in escrow will be released to the Company, with one-half of the balance released nine
(9) months following the closing date and the remainder released eighteen (18) months following the closing date, net of any pending indemnification or other claims under the Agreement.
Consummation of the Acquisition is subject to customary closing conditions, as well as the Buyers satisfaction with the results of
confirmatory due diligence with respect to certain legal and environmental matters. In addition, the Buyers obligations are subject to a financing contingency that provides the Buyer until June 10, 2014 to arrange committed financing to
complete the transactions contemplated by the Agreement, subject to extension by up to fifteen (15) calendar days, with a final termination date of June 25, 2014; provided, that if the Buyer fails to satisfy the financing contingency and
the Company is not in breach of the Agreement at that time, the Buyer will be obligated to pay the Company a termination fee of $500,000.
The foregoing description of the Agreement is qualified in its entirety by reference to the full text of the Agreement, which is attached to
this Current Report on Form 8-K as Exhibit 2.1 and incorporated herein by reference in its entirety. The Agreement has been attached to provide investors with information regarding its terms. It is not intended to provide any other factual
information about the Company, TFI, the Buyer or the Buyer Parent. In particular, the assertions embodied in the representations and warranties contained in the Agreement are qualified by information in certain confidential Disclosure Schedules
provided by the Company to the Buyer in connection with the signing of the Agreement. These confidential Disclosure Schedules contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the
Agreement. Moreover, certain representations and warranties in the Agreement were used for the purpose of allocating risk between the Buyer and the Company rather than establishing matters as facts. Accordingly, investors should not rely on the
representations and warranties in the Agreement as characterizations of the actual state of facts about the Company, TFI, the Buyer, the Buyer Parent or any other person or entity.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
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Exhibit
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Description |
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2.1 |
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Stock Purchase Agreement dated as of March 10, 2014 between Nuverra Environmental Solutions, Inc. and VeroLube USA, Inc. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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NUVERRA ENVIRONMENTAL SOLUTIONS, INC. |
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Date: March 14, 2014 |
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By: |
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/s/ Jay C. Parkinson |
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Name: |
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Jay C. Parkinson |
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Title: |
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Executive Vice President and Chief Financial Officer |
EXHIBIT INDEX
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Exhibit
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Description |
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2.1 |
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Stock Purchase Agreement dated as of March 10, 2014 between Nuverra Environmental Solutions, Inc. and VeroLube USA, Inc. |