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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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): July 13, 2000
HANOVER COMPRESSOR COMPANY
(Exact Name of Registrant as Specified in Charter)
Delaware 1-13071 76-0625124
(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
12001 North Houston Rosslyn 77086
Houston, Texas 77086 (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (281) 447-8787
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Item 5. Other Events.
See the following press release announcing the signing of the purchase agreement
for the compression service division of Dresser-Rand Company by Hanover
Compression, Inc, a wholly-owned subsidiary of Hanover Compressor Company.
HANOVER TO ACQUIRE DRESSER--RAND'S COMPRESSION
SERVICES BUSINESS FOR $190 MILLION
Acquisition Significantly Extends Hanover's Global Position
Hanover Compressor (NYSE: HC - news), a leader in outsourced natural gas
compression and related gas handling services, today announced it has executed a
definitive agreement to acquire the Dresser Rand compression services division
from Ingersoll-Rand Company (NYSE: IR - news) for $190 million.
Under the terms of the definitive agreement, half of the purchase price will be
in cash with the balance paid in newly issued restricted Hanover common stock.
It is anticipated that the transaction, which is subject to required government
approvals, will be completed in the third quarter of this year.
The acquisition will combine Dresser-Rand compressor services division's
substantial operations and customer base with Hanover's leading outsourced
compression and gas handling operations, significantly extending Hanover's
capabilities around the world. Dresser-Rand compression services was organized
25 years ago to provide gas compression rental equipment and related services
and has been a leader in introducing outsourced compression and related
equipment to international markets. The Dresser-Rand compressor rental fleet to
be acquired by Hanover exceeds 240,000 horsepower, averaging over 800 horsepower
per unit, over one-quarter of which operates under long-term contracts outside
the U.S. Under terms of the agreement, Hanover will also acquire Dresser-Rand's
compressor-packaging operations based in Broken Arrow, Oklahoma, a leader in the
design and fabrication of gas compressor packages and related equipment. The
company's related sales and service network is also a major provider of
compression-related parts and service, extending Hanover's presence around the
world. Altogether, the Dresser-Rand operations to be acquired by Hanover are
expected to generate revenues in excess of $175 million this year.
"Dresser-Rand is one of the founders of our industry and is one of the most
recognized and respected players in the energy services business," said Michael
J. McGhan, President and Chief Executive Officer of Hanover. "The D-R
organization is first rate and it is with great pride and excitement that we
bring this outstanding group into the Hanover family. This acquisition further
strengthens Hanover's business position and helps us fill out the total
solution package we offer customers: high-quality, full range products and
services that are crucial to the production, gathering, processing, storage and
distribution of natural gas in a highly reliable, cost effective basis
worldwide. All in all, we believe this transaction represents a giant step
forward in Hanover's quest to better serve our customers and create significant
value for our shareholders.
Hanover Compressor Company is a leader in outsourced full service natural gas
compression and a leading provider of service, financing, fabrication and
equipment for contract natural gas handling applications. Hanover provides
this equipment on a rental, contract compression, maintenance and acquisition
leaseback basis to natural gas production, processing and transportation
companies that are increasingly seeking outsourcing solutions. Founded in 1990
and a public company since 1997, its customers include premier independent and
major producers and distributors throughout the Western Hemisphere.
This news release contains forward-looking statements intended to qualify for
the safe harbors from liability established by the Private Securities Litigation
Reform Act of 1995, including statements regarding the completion of the
transaction and the demand for Hanover's products and services. These
projections and statements are based on management's estimates and assumptions
with respect to future events and financial performance and are believed to be
reasonable, though are inherently uncertain and difficult to predict. Actual
results could differ materially from those projected as a result of certain
factors. A discussion of factors that could cause results to vary are included
in the Company's periodic reports filed with the Securities and Exchange
Commission, including its Form 10-K for the fiscal year/ended December 31, 1999,
and its Form 10-Q for the three months ended March 31, 2000.
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SIGNATURES
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.
HANOVER COMPRESSOR COMPANY
Date: July 13, 2000 By: /s/ Michael J. McGhan
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Name: Michael J. McGhan
Title: President and Chief Executive Officer
