On September 20, 2018, Key Energy Services, Inc. (the Company) sent a letter (the September 20 Letter) to the
Chairman and the President and Chief Executive Officer of Basic Energy Services, Inc., a Delaware corporation (Basic), indicating an interest in acquiring, by means of a merger agreement to be negotiated between the Company and Basic,
all outstanding capital stock of Basic in a
transaction at a fixed exchange ratio of 0.773 shares of common stock, par value $0.01 per share, of the
Company (Company Shares) for each share of common stock, par value $0.01 per share, of Basic (each, a Basic Share). The exchange ratio proposed represents a value of $9.80 per Basic Share, based on the
volume weighted average price of Company Shares as of September 19, 2018. On September 23, 2018, the Company sent a second letter (the September 23 Letter, and together with the
September 20 Letter, the Letters) to Basic regarding the bond offering Basic had previously announced on September 19, 2018, in which the Company urged Basic to delay or modify the terms of the bond offering.
On September 23, 2018, Basic responded to the Letters by telephone and indicated (i) it would proceed with the bond offering,
(ii) it did not view the bond offering as impacting its ability to engage in a transaction with the Company, (iii) that it would formally respond by letter in the next 24 to 48 hours and (iv) that Basic would then be prepared to
discuss the Companys proposal following such response. On September 24, 2018, the Company issued a press release announcing the Companys proposal to enter into a business combination with Basic and that the Company had sent the
Letters to Basic.
A copy of the press release, including the full text of the Letters, is attached hereto as Exhibit 99.1. The foregoing
description is qualified in its entirety by reference to the text of the press release.
This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. This communication relates to a
proposal that the Company has made for a business combination transaction with Basic. In furtherance of this proposal and subject to future developments, the Company (and, if a negotiated transaction is agreed, Basic) may file one or more
registration statements, proxy statements or other documents with the SEC. This communication is not a substitute for any proxy statement, registration statement, prospectus or other document the Company may file with the SEC in connection with the
proposed transaction. INVESTORS AND SECURITY HOLDERS OF THE COMPANY AND BASIC ARE URGED TO READ THE PROXY STATEMENT(s), REGISTRATION STATEMENT, PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY, IF AND WHEN THEY BECOME
AVAILABLE, AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain free copies of these documents (if and when they become available) and other documents filed with the SEC by
the Company through the web site maintained by the SEC at http://www.sec.gov.
Financial Statements and Exhibits.