STEP Energy Services Ltd. ("STEP" or the "Company") is pleased to announce that both leading independent proxy advisors, Institutional Shareholder Services Inc. ("ISS") and Glass Lewis & Co. ("Glass Lewis"), have issued recommendations that shareholders of STEP ("STEP Shareholders") vote FOR the previously announced plan of arrangement (the "Arrangement") with 2659160 Alberta Ltd. (the "Purchaser") and the limited partnerships comprising ARC Energy Fund 8 (a private equity fund advised by ARC Financial Corp.) (collectively, "ARC"). Under the terms of the Arrangement, STEP Shareholders will receive $5.00 in cash for each share of STEP (the "STEP Shares") owned, a premium of approximately 40.4% to the closing price of the STEP Shares of $3.56 on the Toronto Stock Exchange on November 1, 2024, being the last trading day prior to the execution of the arrangement agreement dated November 3, 2024 (the "Arrangement Agreement").
In issuing its endorsement of the Arrangement to clients, ISS highlighted the "significant premium", the fact the special committee (the "Special Committee") of the STEP board of directors was able to negotiate an increase in the consideration from the original offer, and that the "valuation appears credible, and the offer represents the Company's highest trading price since Feb. 1, 2023 (and is above the midpoint of the [discounted cash flow] analysis)".
As an independent proxy advisory firm, ISS has approximately 3,400 clients including many of the world's leading institutional investors who rely on ISS' objective and impartial analysis to make important voting decisions. Glass Lewis' analysis of the transaction focused on the arm's length negotiation process undertaken by the Special Committee that yielded multiple offers from ARC and which considered the Company's standalone prospects, and found the Arrangement to be in the interests of STEP and STEP Shareholders.
Glass Lewis is an independent proxy advisor to institutional investors, covering 30,000 shareholder meetings each year, across approximately 100 global markets. Their customers include the majority of the world's largest pension plans, mutual funds, and asset managers who collectively manage over $40 trillion in assets.
CANADA POST SERVICE DISRUPTION
Due to the Canada Post service disruption, STEP Shareholders in Canada may not have received physical materials for the special meeting of STEP Shareholders (the "Meeting"). Whether or not you have received the physical mailing, you can still vote your STEP Shares. Materials related to the Meeting have been posted on the Company's website at https://www.stepenergyservices.com/special-meeting and on STEP's SEDAR+ profile at http://sedarplus.ca.
Many STEP Shareholders can submit their vote quickly and easily over the phone with STEP's proxy solicitation agent, Laurel Hill Advisory Group ("Laurel Hill"), and Laurel Hill can otherwise provide voting assistance and answer shareholder questions about the Arrangement. STEP Shareholders can reach Laurel Hill by telephone at 1-877-452-7184 (North American Toll Free) or 1-416-304-0211 (Outside North America), or by email at [email protected].
Further, STEP Shareholders should avoid submitting their vote via mail. STEP Shareholders can vote by utilizing one of the alternative methods below:
VOTING METHOD | BENEFICIAL SHAREHOLDERS | REGISTERED SHAREHOLDERS |
Shares held with a broker, bank, or other intermediary and have a 16-digit control number | Shares held in own name and represented by a physical certificate or DRS | |
INTERNET | ONLINE: www.voteproxyonline.com EMAIL: [email protected] | |
TELEPHONE | Call the toll-free number listed on your Voting Instruction Form (VIF) and vote using the control number provided therein. | FAX: 416-595-9593 |
MEETING INFORMATION
The Meeting will be held virtually on December 19, 2024 at 10:00 a.m. (Mountain time) at https://virtual-meetings.tsxtrust.com/en/1729 (Password: step2024). STEP Shareholders are encouraged to vote in advance of the Meeting.
The deadline for STEP Shareholders to submit votes by proxy is Tuesday, December 17, 2024 at 10:00 a.m. (Mountain time).
Based on proxies submitted, if the vote were to be held today it would fail based on achieving less than a majority of the minority shareholder approval. ARC has advised STEP that it does not intend to increase the consideration to be paid from $5.00 per STEP Share or support any alternative transaction to acquire STEP Shares.
SHAREHOLDER QUESTIONS AND VOTING ASSISTANCE
STEP Shareholders who have questions or need assistance in voting should contact Laurel Hill Advisory Group by telephone at 1-877-452-7184 (North American Toll Free) or 1-416- 304-0211 (Outside North America), or by email at [email protected].
ABOUT STEP
STEP is an energy services company that provides coiled tubing, fluid and nitrogen pumping and hydraulic fracturing solutions. Our combination of modern equipment along with our commitment to safety and quality execution has differentiated STEP in plays where wells are deeper, have longer laterals and higher pressures. STEP has a high-performance, safety-focused culture and its experienced technical office and field professionals are committed to providing innovative, reliable and cost-effective solutions to its clients.
Founded in 2011 as a specialized deep capacity coiled tubing company, STEP has grown into a North American service provider delivering completion and stimulation services to exploration and production companies in Canada and the U.S. Our Canadian services are focused in the Western Canadian Sedimentary Basin, while in the U.S., our fracturing services are focused on the Permian basin and our coiled tubing services are focused on the Permian and Eagle Ford in Texas, the Uinta Piceance, and Niobrara-DJ basins in Colorado and the Bakken in North Dakota.
Our four core values; Safety, Trust, Execution and Possibilities inspire our team of professionals to provide differentiated levels of service, with a goal of flawless execution and an unwavering focus on safety.
Forward-Looking Statements:
This news release contains "forward-looking information" or "forward-looking statements" within the meaning of applicable securities laws (collectively, "forward-looking statements"). In some cases, forward-looking statements are identifiable by the terminology used, such as "may," "expect," "believe," "plan," "anticipate," "intend," "could," "estimate," "continue," or similar expressions or the negative of such expressions are intended to identify forward-looking statements. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances are considered forward-looking statements. Forward-looking statements in this news release, include, among other things, references, expressed or implied, to: statements and implications about the reasons for, and the anticipated benefits of, the Arrangement for the Company and the STEP Shareholders; the anticipated date for the holding of the Meeting; the timing and effects of the Arrangement; the solicitation of proxies by the Company; and other information or statements that relate to future events or circumstances and which do not directly and exclusively relate to historical facts.
Forward-looking statements are subject to known and unknown risks and uncertainties and other factors, some beyond the control of STEP, which could cause actual events, results, expectations, achievements or performance to differ materially. The risks and uncertainties related to the Arrangement include, but are not limited to: the possibility that the Arrangement will not be completed on the terms and conditions, or on the timing, currently contemplated, and that it may not be completed at all, due to a failure to obtain or satisfy, in a timely manner or otherwise, the necessary STEP Shareholder and court approvals and other conditions to the completion of the Arrangement or for other reasons; failure to realize the expected benefits of the Arrangement; the failure to complete the Arrangement, which could negatively impact the price of the STEP Shares or otherwise affect the business of the Company; the dedication of significant resources to pursuing the Arrangement and the restrictions imposed on the Company while the Arrangement is pending; the uncertainty surrounding the Arrangement could adversely affect the Company's retention of customers, business partners and key employees; the occurrence of a material adverse effect leading to the termination of the Arrangement Agreement; the payment of a fee by the Company to the Purchaser if the Arrangement Agreement is terminated in certain circumstances; general economic conditions; and other risks and uncertainties. The foregoing list of risks and uncertainties is not exhaustive.
Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other risk factors not presently known to us or that we presently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. No forward-looking statement is a guarantee of future results. Accordingly, you should not place undue reliance on forward-looking statements, which speak only as of the date made. The forward-looking statements contained in this news release represents the Company's expectations as of the date of this news release (or as the date they are otherwise stated to be made) and are subject to change after such date. However, the Company disclaims any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws in Canada. All of the forward-looking information contained in this news release is expressly qualified by the foregoing cautionary statements.
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