Business Context and Reporting Period
This Form 8-K was filed by Civeo Corporation on March 22, 2018. The report addresses a putative class action lawsuit filed on January 26, 2018, regarding the company's proposed acquisition of Noralta Lodge Ltd. ("Noralta"). The filing provides supplemental disclosures to the Proxy Statement to address allegations of incomplete information, specifically concerning valuation multiples used in the transaction analysis.
Key Financial Metrics
The filing does not contain Civeo's current revenue, profit, cash flow, margins, debt, or liquidity figures. The only financial data provided relates to valuation multiples of precedent transactions used by the financial advisor, Lazard, to support the Noralta acquisition:
| Date | Acquirer | Target | EV/LTM EBITDA |
|---|---|---|---|
| March 2017 | Black Diamond Group Ltd. | Britco LP | 4.7x |
| July 2016 | Horizon North Logistics Inc. | Empire Camp Equipment Ltd. | 3.4x |
| November 2011 | Hammond, Kennedy, Whitney & Company, Inc. | Royal Camp Services Ltd. | 5.6x |
| June 2011 | Clean Harbors, Inc. | Peak Energy Services Ltd. | 5.5x |
| December 2010 | Oil States International, Inc. | Mountain West Oilfield Service and Supplies, Inc. | 4.7x |
The overall range of estimated EBITDA multiples for these selected transactions is 3.4x to 5.6x.
Material Changes
There are no material changes to Civeo's financial condition or operations reported in this filing. The primary change is the voluntary supplementation of the Proxy Statement to include specific EV/LTM EBITDA multiples for precedent transactions, which were previously summarized only as a range.
Guidance, Outlook, Risks, and Contingencies
- Litigation Risk: A class action lawsuit (Philip Suhr v. Civeo Corporation) alleges the Proxy Statement was materially incomplete and misleading. Plaintiffs seek to enjoin the shareholder vote and the acquisition itself.
- Management Commentary: Civeo asserts the claims are without merit and denies any liability or wrongdoing. The supplemental disclosure is made voluntarily to moot disclosure claims and minimize litigation risks.
- Transaction Status: The supplemental disclosures do not affect the consideration to be paid for Noralta or the timing of the special shareholder meeting scheduled for March 28, 2018.
- Legal Proceedings: A hearing on the plaintiff's motion for a preliminary injunction is scheduled for March 27, 2018.
Investor Verification Checklist
- Verify the outcome of the preliminary injunction hearing scheduled for March 27, 2018.
- Confirm whether the shareholder vote on the Noralta acquisition proceeds as scheduled on March 28, 2018.
- Review the full Proxy Statement to understand the complete valuation analysis beyond the specific multiples disclosed in this 8-K.
- Monitor for any further developments in the Suhr litigation that could delay or terminate the acquisition.