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S-4/A
KEY ENERGY SERVICES INC filed this Form S-4/A on 03/08/1996
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               CERTAIN CONSIDERATIONS RELATING TO THE TRANSACTION

Reasons for the Transaction; Recommendation of Key Board of Directors

         At the meeting of the Board of  Directors  of Key held on November  18,
1995, the Key Board received a presentation by members of Key management and its
legal advisors  regarding,  and reviewed the terms of, the Merger  Agreement and
the transactions  contemplated thereby. By unanimous vote of Directors,  the Key
Board  determined  that  the  Merger  is  advisable,  fair  to,  and in the best
interests of, Key and its stockholders,  approved the Merger and the Key Charter
Amendment,  and resolved to recommend that stockholders of Key vote FOR approval
and adoption of the Merger Agreement and each of the  transactions  contemplated
thereby and FOR approval and adoption of the Key Charter Amendment.

   
Advantages and Disadvantages of the Merger

         In reaching its determination  with respect to the Merger,  the members
of the Key Board  considered  the advice and opinion of Simmons,  its  financial
advisor. See "Certain  Considerations  Relating to the  Transaction--Opinion  of
Financial  Advisor  to Key." The Key  Board  also  considered  a number of other
positive and negative factors,  including without limitation, the following: (i)
the Key Board's  familiarity  with and review of Key's and WellTech's  business,
operations,  financial  condition,  earnings and  prospects;  (ii) the business,
operations,  earnings  and  financial  condition  of WellTech  and the  enhanced
opportunities  for growth  that the Merger  makes  possible;  (iii) a variety of
factors affecting and relating to the overall strategic focus of Key,  including
without  limitation  growth in  assets  and  earnings;  (iv)  other  acquisition
opportunities available to Key; (v) the terms of the Merger Agreement;  and (vi)
the  anticipated  cost  savings and  efficiencies  available  as a result of the
Merger.  The Key Board reached its conclusion  notwithstanding  certain negative
aspects of the Merger,  including (i) WellTech's  five-year history of operating
losses;  (ii) the  discontinuation of WellTech's Russian  operations;  (iii) the
risks  and  uncertainties  associated  with  the  integration  of  the  WellTech
operations with those of Key and (iv) the fact that Key has incurred substantial
expense and devoted a  significant  amount of the time and  resources,  and will
continue to do so, in connection with the consummation of the Merger.  See "Risk
Factors."
    
   
         In view of the wide variety of factors  considered  by the Key Board of
Directors,  the Key Board did not find it  practicable  to quantify or otherwise
attempt to assign relative weights to the specific factors  considered in making
its determination.  Consequently, the Key Board did not quantify the assumptions
and results of its  analyses in reaching  its  determination  that the Merger is
advisable, fair to, and in the best interests of, Key and its stockholders.
    

         THE  BOARD  OF  DIRECTORS  OF  KEY  UNANIMOUSLY   RECOMMENDS  THAT  KEY
STOCKHOLDERS  VOTE FOR  APPROVAL AND  ADOPTION OF THE MERGER  AGREEMENT  AND FOR
APPROVAL AND ADOPTION OF THE KEY CHARTER AMENDMENT.

Opinion of Financial Advisor to Key

         Key retained  Simmons to act as its  financial  advisor and to render a
fairness  opinion in  connection  with the  Merger.  Simmons  rendered  its oral
opinion (which was subsequently  confirmed in writing) to the Board of Directors
of Key to the effect that,  as of November 18, 1995,  the Merger was fair from a
financial point of view to the holders of Key Common Stock.

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