<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (D)
OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): APRIL 13, 1995
BJ SERVICES COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C> <C>
Delaware 1-10570 63-0084140
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (IRS EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
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5500 Northwest Central Drive
Houston, Texas 77092
(ADDRESS OF PRINCIPAL
EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(713) 462-4239
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
<PAGE> 2
INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On April 13, 1995, pursuant to the Agreement and Plan of
Merger, dated as of November 17, 1994, as amended (the "Merger Agreement"),
between BJ Services Company ("BJ Services") and The Western Company of North
America ("Western"), Western merged with and into BJ Services. Western common
stock is no longer transferrable, and certificates evidencing shares of Western
common stock represent only the right to receive the consideration into which
such shares were converted upon consummation of the Merger. In accordance with
the provisions of the Merger Agreement, holders of shares of Western common
stock will receive an aggregate of 10.98 million shares of common stock of BJ
Services ("BJ Common Stock," each share including a preferred share purchase
right), 4.38 million warrants to purchase BJ Services common stock ("BJ
Warrants") and $219 million in cash. For each share of Western common stock
that is treated as convertible into BJ Common Stock, BJ Services will issue (in
addition to 0.2 warrants) 1.0028 shares of BJ Common Stock, and Western
stockholders will receive $20.00 (in addition to 0.2 warrants) for each share
of Western common stock that is treated as convertible into cash consideration
in the Merger. Cash will be paid in lieu of fractional shares of BJ Common
Stock (on the basis of $19.9438 per share) and fractions of BJ Warrants (on the
basis of $5.00 per warrant). Pursuant to the Merger Agreement, no interest
will be paid or accrue on the consideration paid in the Merger. Following the
merger, the assets and operations of Western were contributed to BJ Services
Company, U.S.A. ("BJ U.S.A."), a wholly owned subsidiary of BJ Services.
The funding for the cash consideration for the Merger was
through a $440 million unsecured bank credit facility ("Bank Credit Facility")
entered into on April 14, 1995. The Bank Credit Facility provides for term
loans in an aggregate principal amount of $265 million and a revolving loan
facility in an aggregate principal amount at any one time outstanding of up to
$175 million with Bank of America National Trust and Savings Association as
agent, Bank of America Illinois as letter of credit issuing bank, The Chase
Manhattan Bank, N.A., as co-agent, Credit Lyonnais Cayman Island Branch, as
co-agent, First Interstate Bank of Texas, N. A., as co-agent, and the other
financial institutions from time to time party thereto. The borrowers and
guarantors under the Bank Credit Facility are BJ Services and certain of
its subsidiaries, including BJ U.S.A., BJ Service International, Inc., and BJ
Services Company Middle East. In addition, Western Petroleum Services
International Company, a subsidiary of BJ Services and formerly a subsidiary of
Western, is a guarantor of the Bank Credit Facility. As of April 28, 1995,
amounts drawn under the Bank Credit Facility accrue interest at a weighted
average rate of 6.875 percent.
The operations acquired from Western include well stimulation,
cementing, sand control and coiled tubing services provided to oil and gas
companies operating in the continental United States, the Gulf of Mexico and
certain foreign countries. BJ U.S.A. will also conduct Western's business of
providing production and industrial chemicals to the oil, gas, refining and
petrochemical industries in the United States. The assets acquired from
Western in the Merger include approximately thirty operating facilities,
pressure pumping equipment, a well stimulation vessel, a manufacturing complex
and distribution center in Fort Worth, Texas, and a chemical blending facility
in Hobbs, New Mexico.
On the basis of discussions between BJ Services and the
Antitrust Division of the Department of Justice in connection with the Merger,
BJ Services sold certain of its fracturing assets located in Brighton,
Colorado, to Nowsco Well Service Ltd., which at the same time also acquired
certain nitrogen pumping assets of BJ Services located in Cortland, Ohio.
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Following the effectiveness and consummation of the Merger, the
Board of Directors of BJ Services was increased from 7 to 10 directors. The
new directors named to fill those vacancies are David A. B. Brown, President of
the Windsor Group, Inc., a management consulting firm, William J. Johnson, an
independent oil and natural gas producer and consultant, and Michael E.
Patrick, Managing Director of M. E. Zukerman & Co., a merchant banking firm,
each formerly a director of Western.
The information set forth in the press release of BJ Services
dated April 26, 1995, regarding the proration of the merger consideration and
the conversion of a portion of the stock election shares to cash election
shares, is incorporated herein by reference.
ITEM 5. OTHER EVENTS
Effective upon consummation of the Merger, by execution of a
supplemental indenture (the "Senior Note Supplement") with respect to Western's
12-7/8% Senior Notes due December 1, 2002, and a supplemental indenture (the
"Convertible Note Supplement") with respect to Western's 7-1/4% Convertible
Subordinated Debentures due January 15, 2015 (the "Convertible Debentures"), BJ
Services assumed the covenants and obligations of Western under the respective
indentures. Pursuant to the indenture for the Convertible Debentures, as
supplemented by the Convertible Note Supplement, each holder of a Convertible
Debenture may convert each $1,000 principal amount debenture into (i) $588.235
in cash, (ii) 29.49 shares of BJ Common Stock and (iii) 11.76 BJ Warrants.
Cash will be paid in lieu of fractional shares of BJ Common Stock (on the basis
of $19.9438 per share) and fractions of BJ Warrants (on the basis of $5.00 per
warrant). On April 20, 1995, BJ Services announced the redemption, effective
May 9, 1995, of the Convertible Debentures, which will cease to be convertible
as of the close of business on May 4, 1995.
The information set forth in the press release of BJ Services
dated April 20, 1995, regarding the redemption of the 7- 1/4% Convertible
Subordinated Debentures due January 15, 2015, is incorporated herein by
reference.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
The following audited financial statements of Western are hereby
incorporated by reference herein: The consolidated balance
sheets, consolidated statements of operations, consolidated
statements of cash flows and consolidated statements of
stockholders' equity, together with the notes to consolidated
financial statements, included as exhibit number 21.4 in the
Current Report of Western on Form 8-K dated February 10, 1995
(No. 1-7451). Also incorporated by reference herein is the
report of Price Waterhouse LLP dated February 22, 1995, relating
to the financial statements of Western, which appears in
exhibit number 21.4 of such Current Report on Form 8-K.
(b) Pro Forma Financial Information.
It is not practicable as of the date of this filing to file the
pro forma financial information required pursuant to Item 7 of
Form 8-K in connection with the Merger. Such pro forma financial
information will be filed not later than May 15, 1995.
(c) Exhibits.
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Exhibit Number Description
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2.1 Agreement and Plan of Merger dated as of November 17, 1994, among BJ Services Company, WCNA Acquisition Corp.
and The Western Company of North America (included as Appendix A in Registration Statement on Form S-4
(Registration No. 33-58017) and incorporated by reference herein).
2.2 First Amendment to Agreement and Plan of Merger dated March 7, 1995, among BJ Services Company, WCNA
Acquisition Corp. and The Western Company of North America, including form of Warrant Agreement (included as
Appendix B in Registration Statement on Form S-4 (Registration No. 33-58017) and incorporated by reference
herein).
99.1 Press release of BJ Services dated April 20, 1995, with respect to the redemption of the 7-1/4% Convertible
Subordinated Debentures due January 15, 2015.
99.2 Press release of BJ Services dated April 25, 1995, with respect to the Company's earnings for the second
fiscal quarter ended March 31, 1995.
99.3 Press release of BJ Services dated April 26, 1995, with respect to the proration of the merger consideration
and the conversion of a portion of the stock election shares to cash election shares.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
BJ SERVICES COMPANY
By /s/ MARGARET B. SHANNON
_______________________
Margaret B. Shannon
Vice President and
General Counsel
Date: April 28, 1995
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EXHIBIT INDEX
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<CAPTION>
Exhibit
Number Description
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2.1 Agreement and Plan of Merger dated as of November 17, 1994, among BJ Services Company, WCNA Acquisition
Corp. and The Western Company of North America (included as Appendix A in Registration Statement on
Form S-4 (Registration No. 33-58017) and incorporated by reference herein).
2.2 First Amendment to Agreement and Plan of Merger dated March 7, 1995, among BJ Services Company, WCNA
Acquisition Corp. and The Western Company of North America, including form of Warrant Agreement
(included as Appendix B in Registration Statement on Form S-4 (Registration No. 33-58017) and
incorporated by reference herein).
99.1 Press release of BJ Services dated April 20, 1995, with respect to the redemption of the Company's 7-
1/4% Convertible Subordinated Debentures due January 15, 2015.
99.2 Press release of BJ Services dated April 25, 1995, with respect to the Company's earnings for the second
fiscal quarter ended March 31, 1995.
99.3 Press release of BJ Services dated April 26, 1995, with respect to the proration of the merger
consideration and the conversion of a portion of the stock election shares to cash election shares.
</TABLE>
<PAGE> 1
EXHIBIT 99.1
================================================================================
PRESS RELEASE [BJ SERVICES LOGO]
CONTACT: MIKE MCSHANE (713) 462-4239 BJ SERVICES
5500 N.W. Central Drive
RELEASE: IMMEDIATELY Houston, Texas 77092
================================================================================
BJ SERVICES COMPANY ANNOUNCES REDEMPTION
OF CONVERTIBLE SUBORDINATED DEBENTURES
Houston, Texas. April 20, 1995. BJ Services Company (BJS-NYSE, CBOE)
announced today that it intends to call for redemption on May 9, 1995 (the
"Redemption Date") all of the outstanding 7 1/4% Convertible Subordinated
Debentures due January 15, 2015 originally issued by The Western Company of
North America. The redemption price is 103.625% of the principal amount of the
Debentures plus accrued interest to the Redemption Date, for a total amount of
$1,059.21 per $1,000 principal amount of the Debentures. The Debentures are
convertible into (i) $588.235 cash, (ii) 29.49 shares of BJ Services Common
Stock and (iii) 11.76 Warrants to purchase shares of BJ Services Common Stock
per $1,000 in principal amount of Debentures. The Debentures may be presented
for conversion up to the close of business on May 4, 1995, the fifth day
preceding the Redemption Date, but not thereafter. The Debentures, which are
listed on the New York Stock Exchange, originally aggregated $90,000,000 in
principal amount. On April 19, 1995, approximately $36,000,000 principal
amount of Debentures remain outstanding.
Paying agent for conversion and redemption will be Harris Trust and Savings
Bank, located at:
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Mailing Address: Street Address: Street Address:
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P.O. Box 830 311 West Monroe Street c/o Harris Trust
Chicago, Illinois 11th Floor Company of New York
60690 Chicago, Illinois 77 Water Street
60606 4th Floor
New York, New York
10005
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BJ Services Company is a leading provider of pressure pumping and related
services to the petroleum industry.
**********
(NOT INTENDED FOR DISTRIBUTION TO BENEFICIAL OWNERS)
<PAGE> 1
EXHIBIT 99.2
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PRESS RELEASE [BJ SERVICES LOGO]
CONTACT: MIKE MCSHANE (713) 462-4239 BJ SERVICES
5500 N.W. Central Drive
RELEASE: IMMEDIATELY Houston, Texas 77092
================================================================================
BJ SERVICES REPORTS
REVENUE AND EARNINGS GROWTH
DURING ITS SECOND FISCAL QUARTER
Houston, Texas. April 25, 1995. BJ Services Company (BJS-NYSE, CBOE) reported
revenue of $106.7 million and net income of $1.4 million during its second
fiscal quarter ended March 31, 1995. Revenue increased by 8% and operating
earnings more than doubled compared with the second quarter of the prior fiscal
year due mainly to increases in Latin America. Correspondingly, net income
improved from $.4 million ($.03 per share) to $1.4 million ($.09 per share) for
the quarter.
Higher interest rates compared with the previous year caused interest expense
to increase by $.7 million to $2.1 million for the quarter. The Company's
effective tax rate was 20% during both quarters.
For the six months ended March 31, 1995, the Company reported revenue of $226.1
million and net income of $6.1 million ($.39 per share).
The results do not reflect any of the operations of The Western Company of
North America. The acquisition of Western, which closed April 13, 1995, will
be accounted for under the purchase method of accounting beginning in the
Company's third fiscal quarter.
International Operations Shows 15% Revenue Increase
Led by continued strong results by the Company's Latin America operations,
revenue from international operations increased by 15% over the same quarter of
the prior year to $60.0 million. Increased stimulation activity with both
private and governmental oil companies, and the addition of a stimulation
vessel and a coiled tubing barge to service the Lake Maracaibo, Venezuela
market contributed to a substantial revenue increase in the Latin America
region. Also contributing to the international revenue gain was revenue growth
from alliances with other major oilfield service companies.
Gains from Customer Alliances and Offshore Offset Weaker Natural Gas Activity
in the U.S.
Despite a 7% decline in the active rig count, revenue from the Company's U.S.
operations increased slightly to $46.6 million during the quarter as a result of
gains from customer alliances and increased offshore work. The active rig count
in the U.S. averaged 708 during the quarter compared with 759 in the prior
year's March quarter. Most of the decrease was in the natural gas drilling
caused by mild winter weather and the resulting weak natural gas prices. The
Company was able to compensate for the activity decline with a continued focus
on new product technology that has strengthened its position with major and
large independent operators.
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CEO Stewart Comments
CEO J.W. Stewart commented, "While the second fiscal quarter typically
represents our weakest quarter, I am pleased with the improvement over the
previous year's second quarter, especially in light of the current weakness in
U.S. drilling activity. Recent investments in Latin America are providing
significant benefits as this region has experienced the greatest increase in
drilling activity of the major oil producing areas.
This quarter's results represent the final quarter before consolidating the
results of our recent acquisition of Western. While merger related costs will
depress earnings for the next two quarters, the acquisition should add 70-80%
to the Company's revenue beginning in the June quarter. In addition, the
majority of our consolidation efforts and the resulting benefits should be in
place by the beginning of fiscal 1996."
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Three Months Ended Six Months Ended
3/31/95 3/31/94 3/31/95 3/31/94
------- ------- ------- -------
(In thousands except per share data)
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Revenue $ 106,668 $ 98,451 $ 226,083 $ 203,208
Cost of Sales and Services 90,665 85,658 190,264 173,300
Other Operating Expenses 12,568 11,231 24,679 22,292
---------- ----------- ----------- -----------
Operating Income 3,435 1,562 11,140 7,616
Interest Expense - net (2,114) (1,389) (4,284) (2,745)
Other Income - net 393 383 940 95
Income Taxes (336) (111) (1,674) (949)
---------- ----------- ----------- -----------
Income Before Cumulative Effect
of Accounting Change 1,378 445 6,122 4,017
Cumulative Effect of Accounting
Change (10,400)
---------- ----------- ----------- -----------
Net Income (Loss) $ 1,378 $ 445 $ 6,122 $ (6,383)
========== =========== =========== ===========
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Three Months Ended Six Months Ended
3/31/95 3/31/94 3/31/95 3/31/94
------- ------- ------- -------
(In thousands except per share data)
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Earnings (Loss) per Share:
Before Cumulative Effect $ 0.09 $ 0.03 $ 0.39 $ 0.26
Cumulative Effect of
Accounting Change (0.66)
------------- -------------- ------------- --------------
Earnings (Loss) Per Share $ 0.09 $ 0.03 $ 0.39 $ (0.40)
============= ============== ============= =============
Average Share Outstanding 15,717 15,663 15,717 15,663
</TABLE>
Western Results
Western's results for the quarter ended March 31, 1995 show revenue of $80.0
million and an operating loss from continuing operations of $1.9 million. The
revenue figure represents a 3% increase from the same prior year quarter due
primarily to additional revenue from Western's production chemical business.
Western's pressure pumping revenue increased slightly compared to the previous
year's quarter and its production chemical business increased by $2.1 million,
or 27%, due to revenues from the acquisition of Betz Energy Chemicals, Inc. in
June 1994.
The $1.9 million operating loss from Western's continuing operations represents
an increase from prior year's operating loss of $.5 million. Most of the
increase results from higher depreciation expense and $1.2 million of
non-recurring expenses associated with the merger with BJ.
The unaudited results for the quarter are summarized as follows:
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Three Months Ended
3/31/95 3/31/94
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(In thousands except per share data)
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Revenue
Pressure pumping $ 70,489 $ 70,278
Production chemicals 9,503 7,773
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79,992 78,051
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Three Months Ended
3/31/95 3/31/94
------- -------
(In thousands except per share data)
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Operating Costs and Expenses:
Pressure pumping 64,900 64,677
Production chemicals 8,922 7,092
Depreciation and amortization 5,354 4,577
General and administrative 2,740 2,234
------------ --------------
81,916 78,580
------------ --------------
Operating Loss from Continuing Operations $ (1,924) $ (529)
</TABLE>
BJ Services Company is a leading provider of pressure pumping and related
services to the petroleum industry.
**********
(NOT INTENDED FOR DISTRIBUTION TO BENEFICIAL OWNERS)
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EXHIBIT 99.3
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PRESS RELEASE [BJ SERVICES LOGO]
CONTACT: MIKE MCSHANE (713) 462-4239 BJ SERVICES
5500 N.W. Central Drive
RELEASE: IMMEDIATELY Houston, Texas 77092
================================================================================
BJ SERVICES ANNOUNCES FINAL STOCK PRORATION
Houston, Texas. April 26, 1995. BJ Services Company (BJS-NYSE, CBOE)
announced the final results of the proration of consideration relating to its
acquisition of The Western Company of North America.
As of April 13, 1995, 21,899,919 shares of common stock of The Western Company
were outstanding. Of such, 19,519,596 or 89.13% elected to receive stock
consideration in exchange for Western shares. The remaining shares outstanding
either elected to receive cash consideration or made no election and are
therefore deemed to be cash election shares.
As a result, for stock election shares, 0.56097268 are converted into the right
to receive stock consideration and 0.43902732 are converted into the right to
receive cash consideration. Each share of Western common stock, whether
treated as a cash election share, a stock election share, or a non-election
share, will be entitled to receive 0.2 warrants to purchase common stock of BJ
Services.
In lieu of fractional shares of BJ common stock, Western stockholders will be
entitled to receive cash on the basis of $19.9438 per share of BJ common stock.
In lieu of fractional BJ warrants, Western stockholders will be entitled to
receive cash on the basis of $5.00 per BJ warrant.
The initial distribution of merger consideration is expected to occur on May 1,
1995.
BJ Services Company is a leading provider of pressure pumping and related
services to the petroleum industry.
**********
(NOT INTENDED FOR DISTRIBUTION TO BENEFICIAL OWNERS)
