UNITED
STATES
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): FEBRUARY 14,
2005
Commission
File Number 1-13270
FLOTEK
INDUSTRIES, INC.
Incorporated
pursuant to the Laws of the State of Delaware
Internal
Revenue Service-Employer Identification No. 90-0023731
7030
Empire Central Drive, Houston, Texas 77040
(713)
849-9911
TABLE
OF CONTENTS
Item
2.01. Completion of Acquisition or Disposition of Assets
Item
9.01. Financial Statements and Exhibits
Signature
Exhibit
Index
Financial
Statements of Business Acquired
Pro Forma
Financial Information
ITEM
2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
On
December 20, 2004, Flotek Industries, Inc., (“Flotek”) and the shareholders of
Spidle Sales & Service, Inc. (“Spidle”) entered into a stock purchase
agreement pursuant to which Flotek agreed to purchase all of the outstanding
stock of Spidle. On February 14, 2005 (the “Closing Date”), Flotek completed the
purchase and Spidle became a wholly-owned subsidiary of Flotek effective January
1, 2005 for financial accounting purposes. The aggregate purchase price was
$8.075 million. Consideration for the purchase was comprised of $6.1 million
cash, $1.275 million notes payable to the sellers, and 129,271 shares of Flotek
common stock valued at the weighted average closing price for the 10 days prior
to the Closing Date. The acquisition was approved by unanimous consent of our
Board of Directors on November 11, 2004.
The
seller notes bear a fixed 6% interest rate and are amortized over three years. A
portion of the common stock issued to the sellers is subject to a collar
provision which allows Flotek to repurchase 35,000 shares of common stock at
$5.42 on the two year anniversary of the Closing Date. On the Closing Date,
Flotek entered into employment contracts with key individuals at Spidle.
The
acquisition was partially financed with a $13 million senior credit facility
from Wells Fargo Commercial Banking in Houston. The senior credit facility is
comprised of $8 million in term loans and a $5 million revolving credit
facility. Initial borrowings under this facility were used to finance the
acquisition of Spidle and repay Flotek’s existing senior credit facility. In
addition to significantly increasing the Company’s working capital availability,
Flotek’s senior borrowing rates were reduced approximately 300 basis points as a
result of the new financing.
Spidle
(www.spidle.com) is a
downhole tool company with rental, sales, and manufacturing operations
throughout the Rocky Mountains. Spidle serves both the domestic and
international downhole tool markets with a customer base extending into Canada,
Mexico, South America, Europe, Asia and Africa. Spidle operates in the energy,
mining, water well and industrial drilling sectors. Spidle will be merged with
Turbeco, Inc. into Flotek's Drilling Products segment.
ITEM
9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial
statements of business acquired.
Spidle
Sales & Service, Inc.
Report of
Independent Auditors
Balance
Sheets as of December 31, 2004 and 2003
|
Statements
of Income for the Years Ended 2004 and 2003 |
|
Statements
of Changes in Stockholders’ Equity for the Years Ended 2004 and
2003 |
|
Statements
of Cash Flows for the Years Ended 2004 and
2003 |
Notes to
Financial Statements
(b) Pro
forma financial information.
|
Unaudited
Pro Forma Combined Balance Sheet as of December 31,
2004 |
|
Unaudited
Pro Forma Combined Statement of Income for the Year Ended December 31,
2004 |
|
Notes
to Unaudited Pro Forma Combined Financial
Statements |
(c)
Exhibits.
| 2.1 | Stock Purchase Agreement dated December 20, 2004 among Flotek Industries, Inc., and the shareholders of Spidle Sales & Service, Inc. |
| 99.1 |
Financial
Statements of Business Acquired |
| 99.2 |
Pro
Forma Financial Information |
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.
| FLOTEK INDUSTRIES INC. | ||
|
Registrant | ||
| |
|
|
| Date: April 22, 2005 | By: | /s/ Lisa Bromiley Meier |
| Lisa Bromiley Meier | ||
| Chief Financial Officer & Vice President | ||
EXHIBIT
INDEX
Flotek
Industries, Inc.
Exhibit
No.
| 2.1 |
Stock
Purchase Agreement dated December 20, 2004 among Flotek Industries, Inc.,
and the shareholders of Spidle Sales & Service,
Inc. |
| 99.1 |
Financial
Statements of Business Acquired - Spidle Sales & Service,
Inc. |
Independent
Auditors’ Report
Balance
Sheets as of December 31, 2004 and 2003
Statements
of Changes in Stockholders’ Equity for the Years Ended December 31, 2004
and
2003
Statements
of Income and Owner’s Net Investment for the Years Ended December 31, 2004 and
2003
Statements
of Cash Flows for the Years Ended December 31, 2004 and 2003
Notes to
Financial Statements
| 99.2 |
Pro
Forma Financial Information |
Unaudited
Pro Forma Combined Balance Sheet as of December 31, 2004
Unaudited
Pro Forma Combined Statement of Income for the Year Ended December 31,
2004
Notes to
Audited Pro Forma Combined Financial Statements