Destiny Resource Services Corp.
TSX : DSC

Destiny Resource Services Corp.

February 01, 2010 09:00 ET

Destiny Resource Services Corp. Announces Special Shareholder Meeting and Special Dividend

CALGARY, ALBERTA--(Marketwire - Feb. 1, 2010) - Destiny Resource Services Corp. (TSX:DSC) ("Destiny") announces the mailing of the Management Information Circular and Proxy Statement ("Information Circular") and the meeting of its shareholders ("Special Meeting") to consider the proposed merger with Logan Holdings, Inc. ("Logan") will be held February 26, 2010. 

Destiny also announces the declaration of a special dividend of $0.325 per Destiny common share, totaling $1.8 million, payable February 25, 2010.

"Our people and our advisors, on both the Destiny and the Logan side, have worked very hard to provide Destiny shareholders and potential investors with information on our combined businesses. I am eager to put this matter to our shareholders for approval" said Bruce Libin, Executive Chairman and CEO of Destiny. "I am also very pleased we are able to share some of the cash generated by Destiny since we stopped paying regular dividends with the owners of Destiny through payment of the special dividend."

"We are excited the merger is almost upon us and we can turn our attention from documenting the past to planning and executing on the future" said Gerald Hage, President and Chief Executive Officer of Logan. "We very much believe in our strategy and look forward to the opportunity to deliver value to the shareholders of our merged companies."

The special dividend will be payable February 25, 2010 to shareholders of record on February 19, 2010. The dividend is not conditional upon the completion of the merger and is expected to be an "eligible" dividend. The $1.8 million represents a partial return to the Destiny shareholders of working capital generated by Destiny since the announcement of the merger.

The Special Meeting of Destiny shareholders will be held February 26, 2010. The meeting will begin at 9:30 a.m. Details are contained in the Notice of Special Meeting of Shareholders and the Information Circular dated January 29, 2010. These documents will be mailed to shareholders on or about February 1, 2010. They will also be available at www.sedar.com and at www.destiny-resources.com. 

Included in the Information Circular are the anticipated slate of officers and directors following the merger. 

Gerald Hage Chief Executive Officer, Director
Bruce Libin President, Director
David Jones Chief Financial Officer
Peter Scott Chief Safety Officer
Patrick Egli Corporate Secretary
   
Paul McDermott, Cadent Energy Partners Chairman of the Board of Directors
David Barr, retired Director
David Coppé, Cadent Energy Partners Director
David Kennedy, consultant Director
Glen Roane, corporate director Director

Destiny Shareholders, including all of Destiny's directors and officers, representing approximately 39% of the outstanding common shares of Destiny have signed agreements in support of the merger. Logan Shareholders representing approximately 65% of the shares of Logan have signed agreements in support of the merger. The proposed merger is subject to approval by the shareholders of Destiny voting in person or by proxy at the Special Meeting. At the meeting, Destiny shareholders will be asked to approve the issuance of Destiny shares to the former Logan shareholders and a new stock option plan, details of which are in the Information Circular. 

The merger is subject to a number of conditions including approval by the Destiny and Logan shareholders, regulatory approvals and other customary conditions.

The Information Circular contains information with respect to the merger of Destiny and Logan. It includes the background to and reasons for and advantages of the merger, together with a view of the strategy to be followed after closing. The Information Circular contains information regarding Logan and its business and operations and financial statements for Logan. In addition there are pro-forma statements showing the effect if Destiny and Logan had been together from the beginning of 2009. 

For purposes of inclusion in the Information Circular, the Logan financial statements have now been reviewed and reconciled in accordance with Canadian GAAP. The financial information included in the Information Circular reflects combined EBITDA for the twelve months ended September 30, 2009 of C$28 million. This amount reflects revisions to the Logan amounts to include the negative impact of discontinued operations previously excluded and certain one-time adjustments. The revised Logan gross profit and EBITDA margins for the twelve months ended September 30, 2009 were 43% and 20%, respectively.

Looking forward to 2010, Logan anticipates that 2009 was a low point for its oil tool business. During Q4 2009 and January 2010, Logan entered into new multi-year preferred vender contracts with its largest customers Weatherford International, Smith International, and Knight Oil Tools. In addition, Logan's backlog for its core fishing tool business has grown 40% from the 2009 year-end amount and the recently acquired Dennis Tool Company ("Dennis") is experiencing significant growth. Dennis has increased its manufacturing shifts from 12 hour per day to three shifts, six days a week in an attempt to meet demand. 

Peters & Co. Limited acted as financial advisor to Logan in connection with Transaction. FirstEnergy Capital Corp. provided financial advice to Destiny.

About Logan: 

Logan manufactures and sells a complete line of downhole products – retrieving tools, stroking tools, surface tools, remedial tools and high performance polycrystalline diamond compact cutters and bearings for a variety of well workover, intervention, drilling and completion activities. Based in Houston, Texas, Logan is recognized as a leading source of superior products for many of the largest fishing and rental tool companies around the world.

About Destiny:

Destiny provides seismic front-end services to energy explorers and producers and to seismic acquisition companies in North America. Services provided are seismic line clearing (Destiny Line Clearing); shot-hole drilling (Destiny Drilling; Destiny Drilling USA) and Geospatial Services including survey and mapping (Destiny Survey & Mapping; Destiny Survey & Mapping USA); navigation, positioning and asset management technology (Destiny Navigation Technologies); and locating services (Advanced Locating Services). 

Forward-looking Statements

This press release contains forward-looking statements relating, among other things, to the merger. These statements relate to future events or future performance of Destiny, Destiny Merger Co. ("Mergeco") and Logan. When used in this press release, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "predict", "seek", "propose", "expect", "potential", "continue", and similar expressions, are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Such statements reflect Destiny's current views with respect to certain events, and are subject to certain risks, uncertainties and assumptions. Although Destiny believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because we can give no assurance that they will prove to be correct. Many factors could cause Destiny's or Logan's future results, performance, or achievements to materially differ from those described in this press release. These include, but are not limited to, risks that required shareholder, regulatory and third party approvals and consents are not obtained on terms satisfactory to the parties within the timelines provided for in the agreement and plan of merger dated November 18, 2009 among Destiny, Logan and Mergeco and risks that other conditions to the completion of the merger are not satisfied on the timelines set forth in the Agreement or at all. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated, or expected. The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement. These statements speak only as of the date of this press release. Destiny does not intend and does not assume any obligation, to update these forward-looking statements to reflect new information, subsequent events or otherwise, expect as required by law. 

The securities to be issued pursuant to the Transaction have not been registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities described herein in any jurisdiction.

Contact Information

  • Logan Holdings, Inc.
    Gerald Hage
    President and Chief Executive Officer
    (281) 617-5300
    (281) 219-6638 (FAX)
    www.loganoiltools.com
    or
    Destiny Resource Services Corp.
    Bruce R. Libin, Q.C.
    Executive Chairman and Chief Executive Officer
    (403) 231-2755
    (403) 233-8714 (FAX)
    www.destiny-resources.com