ION Completes Acquisition of ARAM 9/18/2008 5:01:00 PM HOUSTON, Sept. 18 /PRNewswire-FirstCall/ -- ION Geophysical Corporation
(NYSE: IO) announced today that it has completed its acquisition of ARAM
Systems Ltd., a Canadian-based provider of cable-based land seismic recording
systems, and its affiliate company, Canadian Seismic Rentals Inc. The
purchase price paid by ION at closing was $236 million in cash plus the
issuance of 3,629,211 shares of ION common stock. The purchase price is
subject to certain working capital adjustments after closing. In addition,
ION issued short-term notes in the original aggregate principal amount of
$45 million as part of the purchase price. When ION repays these notes,
$35 million of the cash repayment amount will be deposited into escrow for
post-closing purchase price adjustments and to secure indemnification
obligations of the parties. Including anticipated interest expenses, the
issuance of ION common stock, and synergies, but excluding one-time charges,
the acquisition is projected to be earnings-neutral for the remainder of 2008
and accretive on a consolidated pro-forma basis in 2009.
ION financed the cash portion of the purchase price with $85 million in
borrowings under its revolving credit facility, a new $125 million five-year
term loan and a new $41 million senior unsecured loan. In connection with the
financing, ION amended its commercial banking credit facility to increase its
borrowing capacity under its revolving credit facility from $100 million to
$110 million, and to add a new $125 million term loan facility.
In connection with its acquisition of ARAM, ION has entered into
Employment Inducement Stock Option Agreements with 48 key employees of ARAM,
providing for the grant of stock options to each such employee to purchase
shares of common stock of ION as material inducements to their joining the
company. The options are exercisable for an aggregate amount of 410,000 shares
of ION common stock. The exercise price under these inducement stock options
is $14.10 per share. On September 18, 2008, the closing sales price per share
of common stock of ION on the New York Stock Exchange was $14.10 per share.
About ION
ION is a leading provider of geophysical technology, services, and
solutions for the global oil & gas industry. ION's offerings allow E&P
operators to obtain higher resolution images of the subsurface to reduce the
risk of exploration and reservoir development, and enable seismic contractors
to acquire geophysical data more efficiently. Additional information about ION
is available at http://www.iongeo.com.
The information included herein contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. Actual results may vary fundamentally
from those described in these forward-looking statements. All forward-looking
statements reflect numerous assumptions and involve a number of risks and
uncertainties. These risks and uncertainties include risk factors that are
disclosed by ION from time to time in its filings with the Securities and
Exchange Commission.
Contacts
ION (Financial community)
Chief Financial Officer
Brian Hanson, +1 281.879.3672
ION (Media affairs)
Senior Manager - Corporate Marketing
Jenny Salinas, +1 281.366.7286
jenny.salinas@iongeo.com
SOURCE ION Geophysical Corporation
Web site: http://www.iongeo.com
(IO)
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