Universal Compression Holdings, Inc. and Hanover Compressor Company to Combine in Merger of Equals.The parties expect: * Merger will create a global leader in the natural gas compression services and production and processing equipment fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. industry * Anticipated annual pre-tax cost savings of approximately $50 million * Combined company, which will have a new name, will be better positioned to compete in the global market place * Combination provides a larger pool of domestic contract compression contracts and assets that can be offered for sale to Universal Compression Partners, L.P. * Gordon T. Hall to be Chairman * Stephen A. Snider to be President and Chief Executive Officer HOUSTON -- Hanover Compressor compressor, machine that decreases the volume of air or other gas by the application of pressure. Compressor types range from the simple hand pump and the piston-equipped compressor used to inflate tires to machines that use a rotating, bladed element to achieve Company (NYSE NYSE See: New York Stock Exchange :HC) (Hanover) and Universal Compression Holdings, Inc. (NYSE:UCO UCO Universidad de Córdoba (University of Cordoba, Spain) UCO University of Central Oklahoma UCO Université Catholique de l'Ouest UCO Used Cooking Oil UCO Use Classes Order UCO Under Cover Of UCO United Cooperatives of Ontario ) (Universal) announced today that their boards of directors have approved a stock-for-stock merger of equals and that the companies have signed a definitive merger agreement. Under the terms of the merger agreement, Hanover stockholders will receive 0.325 shares of the new company for each share of Hanover they own, and Universal stockholders will receive 1.0 share of the new company for each share of Universal they own. Based on the closing market prices for the shares of both companies on February 2, 2007, the combined company would have an equity market capitalization Equity Market Capitalization A measure of the total market value of an equity market. The measure is calculated by taking the market capitalization of all companies in the equity market and adding them together to arrive at the capitalization for the market as a whole. of approximately $3.8 billion. It is anticipated that Hanover stockholders initially will own about 53 percent and Universal stockholders about 47 percent of the new company. The merger is expected to be tax free to stockholders of both companies. "The combination of Hanover and Universal brings together two highly respected companies in the natural gas compression and production and processing equipment fabrication industry. Both companies have an excellent team of employees known for their dedication to customer service," said Stephen A. Snider, Universal's Chairman, President and Chief Executive Officer. "Operating under a new corporate name, we will be able to fully leverage our combined capabilities to provide an enhanced level of customer support and a wider product and service offering to meet the full compression services and production and processing equipment needs of our customers worldwide." John E. Jackson, Hanover's President and Chief Executive Officer, said, "This merger will create a new company with a portfolio of high quality assets, products, services and financial capabilities to generate enhanced value for stockholders of both companies. It also affords excellent opportunities for the employees and customers of both companies to benefit from our combined global expertise in an increasingly competitive market place." Stephen Snider added, "The combination also provides a larger pool of domestic contract compression customers and equipment that can be offered for sale to Universal Compression Partners, L.P. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :UCLP UCLP User Controlled LightPaths UCLP Universal Commerce Language and Protocol UCLP Universal Customer Loyalty Program (Identlogic Systems Private Limited) UCLP User Controlled Light Path ) over time. The transfer of these domestic contract compression assets to Universal Compression Partners should further improve our cost of capital, and enable us to provide our services on a more efficient basis to our customers over the long term." Following the merger, Stephen Snider will serve as President and Chief Executive Officer and as a director of the new company. Gordon T. Hall, Hanover's Chairman, will serve as Chairman of the Board of the combined company, which will consist of ten directors, five designated by each company. John Jackson John Jackson may refer to: Politics:
The merger is expected to be accretive to earnings per share for stockholders of both companies in 2008 after achieving expected annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. pre-tax cost savings of approximately $50 million. These synergies are expected to arise from the closure of overlapping facilities, increased operational efficiencies and reduction of corporate overhead. Additional Information about the Merger The merger agreement provides for the formation of a new holding company that will own all the stock of both Hanover and Universal. The new company will be headquartered in Houston, and its common stock is expected to be listed on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. . The merger is subject to various conditions including approval of the stockholders of both Hanover and Universal and customary regulatory approvals, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (Public Law 94-435, known commonly as the HSR Act) is a set of amendments to the antitrust laws of the United States, principally the Clayton Antitrust Act. The HSR Act was signed into law by President Gerald R. of 1976. It is anticipated that the closing of the merger will occur in the third quarter of this year. Hanover and Universal intend to file a proxy statement/prospectus with the Securities and Exchange Commission as promptly as practicable after each company files its 2006 Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . Hanover Fourth Quarter Financial Results Update Hanover also announced that, for the three months ended December 31, 2006, it expects to report revenue of $465 million to $470 million, up from $424 million in the third quarter; income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the before income taxes and minority interest in the range of $27 million to $31 million, compared to $23 million in the third quarter; and backlog of $808 million, including $325 million for compression at December 31, 2006 compared to $689 million, including $192 million for compression at September 30, 2006. With respect to fourth quarter income taxes, Hanover has not yet finalized See finalization. its tax analysis, but it currently expects the effective tax rate in the fourth quarter to be less than the mid-40% range, which Hanover had expected at the time of its third quarter 2006 conference call. Hanover will provide more specific information in its fourth quarter earnings conference call, which it expects to conduct on Thursday, February 15, 2007. Universal Fourth Quarter and Full Year Earnings Updates Universal also announced updated revenue and earnings guidance for the fourth quarter and full year 2006. For the three months ending December 31, 2006, Universal expects revenue of $250 million to $255 million and earnings per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share of $0.66 to $0.70; this compares to previously reported guidance of revenue of $240 million to $250 million and earnings per diluted share of $0.70 to $0.74. The reduced earnings guidance is primarily the result of higher labor costs in the domestic contract compression segment. For the twelve months ended December 31, 2006, Universal expects revenue of $945 million to $950 million and earnings per diluted share of $2.84 to $2.88; this compares to previously reported guidance of revenue of $935 million to $945 million and earnings per diluted share of $2.88 to $2.92. Universal's fabrication backlog was approximately $289 million at December 31, 2006. Universal plans to conduct its fourth quarter earnings joint conference call for both Universal Compression Holdings and Universal Compression Partners during the week of February 26, 2007. Conference Call for the Investment Community A joint conference call for Hanover and Universal to discuss the merger will be held Monday, February 5, 2007, at 10:00 a.m. Central Time. Stephen Snider and John Jackson will make a presentation and take questions. The call will be broadcast on Hanover's website on the home page at www.hanover-co.com and on Universal's website in the UCO "Investor Information" section at www.universalcompression.com, and a replay will be available on these sites for 30 days following the conference. Participants may also join the conference call by dialing 312-470-7273, with the passcode 6199065, five to ten minutes prior to the scheduled start time. A replay of the call will be available by dialing 203-369-3601, with the passcode 5252. About Hanover Compressor Company Hanover Compressor Company, headquartered in Houston, Texas “Houston” redirects here. For other uses, see Houston (disambiguation). Houston (pronounced /'hjuːstən/) is the largest city in the state of Texas and the , is a global market leader in full service natural gas compression and a leading provider of service, fabrication and equipment for oil and natural gas production, processing and transportation applications. More information can be found at www.hanover-co.com. About Universal Compression Holdings, Inc. Universal Compression Holdings, Inc., headquartered in Houston, Texas, is a leading natural gas compression services company, providing a full range of contract compression, sales, operations, maintenance and fabrication services to the domestic and international natural gas industry. Additional information is available at Universal's website, www.universalcompression.com. About Universal Compression Partners, L.P. Universal Compression Partners, L.P. was recently formed by Universal Compression Holdings, Inc. to provide natural gas contract compression services to customers throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and was started in October 2006 with an initial fleet comprising approximately 330,000 horsepower horsepower, unit of power in the English system of units. It is equal to 33,000 foot-pounds per minute or 550 foot-pounds per second or approximately 746 watts. , or approximately 17 percent by available horsepower of Universal Compression Holdings' domestic contract compression business at that time. Universal Compression Holdings owns approximately 51 percent of Universal Compression Partners. Advisors Hanover's financial advisor for the merger is Credit Suisse The Credit Suisse Group (SWX:CSGN, NYSE: CS) is a financial services company, headquartered in Zürich, Switzerland. It is the second-largest Swiss bank, behind UBS AG. Securities (USA) LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ; its principal legal advisor is Vinson & Elkins L.L.P. Universal's financial advisor is Goldman Sachs The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS) is one of the world's largest global investment banks. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street. & Co., and its principal legal advisor is Baker Botts Baker Botts L.L.P. is a major international law firm of about 800 attorneys, with a long history, significant political connections, and a long list of corporate clients. History L.L.P. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Statements about Hanover's and Universal's outlook and all other statements in this release (and oral statements made regarding the subjects of this release, including on the conference call announced herein) other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors, many of which are outside Hanover's and Universal's control, which could cause actual results to differ materially from such statements. Forward looking information includes, but is not limited to, statements regarding the new combined company, including Hanover's and Universal's expected combined financial and operating results; the expected amount and timing of cost savings and operating synergies; the expected financial outlook of and opportunities associated with Universal Compression Partners; and whether and when the transactions contemplated by the merger agreement will be consummated. Among the factors that could cause results to differ materially from those indicated by such forward-looking statements are the failure to realize anticipated synergies; the result of the review of the proposed merger by various regulatory agencies regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. and any conditions imposed on the new company in connection with consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of the merger; failure to receive the approval of the merger by the stockholders of Hanover and Universal and satisfaction of various other conditions to the closing of the merger contemplated by the merger agreement. These forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties described in Hanover's Annual Report on Form 10-K for the twelve months ended December 31, 2005 and Universal's Transition Report on Form 10-K for the nine months ended December 31, 2005, and those set forth from time to time in Hanover's and Universal's filings with the Securities and Exchange Commission, which are available through Hanover's and Universal's websites at www.hanover-co.com and www.universalcompression.com. Hanover and Universal expressly disclaim dis·claim v. dis·claimed, dis·claim·ing, dis·claims v.tr. 1. To deny or renounce any claim to or connection with; disown. 2. To deny the validity of; repudiate. 3. any intention or obligation to revise or update any forward-looking statements whether as a result of new information, future events, or otherwise. Additional Information In connection with the proposed merger, a registration statement of the new company, Iliad Holdings, Inc., which will include proxy statements Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. of Universal Compression Holdings, Inc. and Hanover Compressor Company, and other materials, will be filed with the Securities and Exchange Commission. INVESTORS AND SECURITY HOLDERS ARE URGED TO CAREFULLY READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS AND THESE OTHER MATERIALS REGARDING THE PROPOSED MERGER WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT UNIVERSAL, HANOVER, ILIAD HOLDINGS AND THE PROPOSED TRANSACTION. Investors and security holders may obtain a free copy of the registration statement and the proxy statement/prospectus when they are available and other documents containing information about Universal and Hanover, without charge, at the SEC's web site at www.sec.gov, Universal's web site at www.universalcompression.com, and Hanover's web site at www.hanover-co.com. Copies of the registration statement and the proxy statement/prospectus and the SEC filings that will be incorporated by reference therein may also be obtained for free by directing a request to either Investor Relations Investor relations The process by which the corporation communicates with its investors. , Universal Compression Holdings, Inc., 713-335-7000 or to Investor Relations, Hanover Compressor Company, 832-554-4856. Participants in Solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual Hanover Compressor Company and Universal Compression Holdings, Inc. and their respective directors, officers and certain other members of management may be deemed to be participants in the solicitation of proxies from their respective stockholders in respect of the merger. Information about these persons can be found in Hanover's and Universal's respective proxy statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc their 2006 annual meetings of stockholders as filed with the SEC on March 24, 2006 and March 15, 2006, respectively. Additional information about the interests of such persons in the solicitation of proxies in respect of the merger will be included in the registration statement and the proxy statement/prospectus to be filed with the SEC in connection with the proposed transaction. |
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