Print Page  Close Window

SEC Filings

KEY ENERGY SERVICES INC filed this Form S-4/A on 03/08/1996
Entire Document

         In  conducting  its  analysis  and  arriving at its  opinion  expressed
herein,  Simmons has  considered  such  financial and other factors as it deemed
appropriate under the circumstances including,  among others, the following: (i)
the historical and current  financial  position and results of Key and WellTech;
(ii) the business  prospects of Key and WellTech;  (iii)  estimates of pro forma
combination  benefits pursuant to the Merger prepared by Key and WellTech,  (iv)
the  historical  and  current  market  for Key  Common  Stock and for the equity
securities  of certain  other  companies  believed  to be  comparable  to Key or
WellTech;  (iv) the  respective  contributions  in terms  of  various  financial
measures of Key and WellTech to the combined company, and the relative ownership
of Key after the proposed transaction by the current holders of Key Common Stock
and WellTech Common Stock;  (v) the pro forma effect of the transaction on Key's
capitalization ratios,  earnings per share and cash flow per share; and (vi) the
nature and terms of certain other acquisition transactions that Simmons believes
to be relevant.  Simmons has also taken into account its  assessment  of general
economic,  market and financial conditions and its experience in connection with
similar  transactions  and securities'  valuation  generally.  Simmons'  opinion
necessarily is based upon  conditions as they exist and can be evaluated on, and
on the information made available at, the date of such opinion.  Simmons did not
express  any  opinion  as to the price or range or prices at which the shares of
Key Common Stock will trade subsequent to the consummation of the Merger.

         In connection with its fairness opinion, Simmons performed a variety of
financial  analyses with respect to Key and WellTech,  including those described

         Analysis  of Selected  Publicly-Traded  Comparable  Companies.  Simmons
reviewed  certain  publicly  available  financial,  operating  and stock  market
information   as  of   November   17,  1995  for  Key,   WellTech   and  certain
publicly-traded companies (the "Comparable Companies") that Simmons considers to
be  comparable  to  Key or  WellTech.  For  the  Comparable  Companies,  Simmons
calculated,  among other  things,  multiples  of market  stock price to trailing
twelve months' ("TTM")  earnings per share and cash flow per share and multiples
of Adjusted  Market Value (total  market  capitalization  less cash in excess of
five percent of revenues) to TTM  revenues,  TTM earnings  before  depreciation,
depletion and amortization, interest and taxes ("EBDIT") and Adjusted Book Value
(total book capitalization less cash in excess of five percent of revenues). All
multiples  calculated  for  WellTech  were  based on the most  recent  available
results of  WellTech  for the TTM  period,  including  certain  adjustments  for
non-recurring  and/or  extraordinary items, and exclude the results attributable
to WellTech's  Russian  operations.  In addition,  the multiples  related to the
acquisition  of  WellTech  were  based on an  acquisition  price  (the  "Implied
Consideration")  calculated  using  the net  number of  additional  shares to be
issued and Key's  closing  share price at  November  17, 1995 ($5.00 per share),
plus the estimated  value of the New Key Warrants,  less the estimated  value of
the Existing Key  Warrants,  plus assumed debt to be assumed.  Unless  otherwise
noted,  WellTech's  results were not restated to reflect any benefit  associated
with the cost savings estimated by the managements of Key and WellTech.