DEFM14A 1 d799822ddefm14a.htm DEFM14A DEFM14A
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No.     )

 

 

Filed by the Registrant    ☒                        Filed by a party other than the Registrant    ☐

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material under §240.14a-12

C&J ENERGY SERVICES, INC.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

  (1)

Title of each class of securities to which transaction applies:

 

 

 

  (2)

Aggregate number of securities to which transaction applies:

 

 

 

  (3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

 

  (4)

Proposed maximum aggregate value of transaction:

 

 

 

  (5)

Total fee paid:

 

 

 

Fee paid previously with preliminary materials.

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

  (1)

Amount Previously Paid:

 

 

 

  (2)

Form, Schedule or Registration Statement No.:

 

 

 

  (3)

Filing Party:

 

 

 

  (4)

Date Filed:

 

 

 

 

 


Table of Contents

 

 

LOGO    LOGO

MERGER PROPOSAL—YOUR VOTE IS VERY IMPORTANT

Dear Stockholder:

On June 16, 2019, C&J Energy Services, Inc. (“C&J”), Keane Group, Inc. (“Keane”) and King Merger Sub Corp., a wholly owned subsidiary of Keane (“Merger Sub”), entered into an Agreement and Plan of Merger (as it may be amended from time to time, the “merger agreement”), pursuant to which they agreed to combine their respective businesses in a merger of equals. Pursuant to the merger agreement, Merger Sub will merge with and into C&J, with C&J as the surviving corporation and wholly owned subsidiary of Keane (the “merger”), and immediately thereafter, as part of the same transaction, C&J will merge with and into another wholly owned subsidiary of Keane, with such subsidiary continuing as the surviving entity. Following completion of the merger, the combined company (the “Combined Company”) will be renamed and will be headquartered at the current C&J offices in Houston, Texas. The Combined Company will be a premier pure-play provider of integrated well completion services in the U.S. and an industry-leading, diversified oilfield services provider.

Upon successful completion of the merger, each share of common stock, par value $0.01 per share, of Merger Sub issued and outstanding immediately before the effective time shall be converted into and become one validly issued, fully paid and non-assessable share of common stock, par value $0.01 per share, of C&J and each issued and outstanding share of C&J common stock will be converted into the right to receive 1.6149 shares (the “exchange ratio”) of Keane common stock. The exchange ratio is fixed and will not be adjusted for changes in the market price of either Keane common stock or C&J common stock between the signing of the merger agreement and the effective time of the merger. Keane stockholders will continue to own their existing shares of Keane common stock. Based on the exchange ratio, the shares outstanding of C&J common stock (plus outstanding C&J restricted stock units, outstanding C&J performance share awards and outstanding C&J restricted stock awards) and the shares outstanding of Keane Common Stock (plus outstanding Keane restricted stock units, outstanding Keane performance-based restricted stock units and outstanding Keane restricted stock awards), it is estimated that C&J stockholders and Keane stockholders will each own approximately 50% of the issued and outstanding shares of the Combined Company immediately following the effective time of the merger. The board of directors of C&J (the “C&J board”) has declared, subject to the C&J board making a determination that surplus exists under Delaware law, a dividend of $1.00 per share of C&J common stock. If the C&J board determines that C&J has sufficient surplus to pay such dividend, such dividend will be paid prior to the effective time of the merger to the holders of record of C&J common stock as of the record date for such dividend. C&J common stock is traded on the New York Stock Exchange (the “NYSE”) under the symbol “CJ.” Keane common stock is traded on the NYSE under the symbol “FRAC.” The common stock of the Combined Company is expected to be listed on the NYSE under a new ticker symbol. We encourage you to obtain updated quotes for the common stock of both C&J and Keane.

C&J and Keane will each hold special meetings of their respective stockholders in connection with the proposed merger (respectively, the “C&J special meeting” and “Keane special meeting”).

At the C&J special meeting, C&J stockholders will be asked to consider and vote on proposals to (1) adopt the merger agreement (the “C&J merger proposal”), (2) approve, on a non-binding advisory basis, the compensation that may be paid or become payable to C&J’s named executive officers in connection with the merger and (3) approve the adjournment of the C&J special meeting to solicit additional proxies if there are not sufficient votes cast at the C&J special meeting to approve the C&J merger proposal. The C&J board unanimously recommends that C&J stockholders vote “FOR” each of the proposals to be considered at the C&J special meeting.

At the Keane special meeting, Keane stockholders will be asked to consider and vote on proposals to (1) approve the issuance of Keane common stock to current C&J stockholders pursuant to the merger agreement (the “Keane share issuance proposal”), (2) approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Keane’s named executive officers in connection with the merger and (3) approve the adjournment of the Keane special meeting to solicit additional proxies if there are not sufficient votes cast at the Keane special meeting to approve the Keane share issuance proposal. The Keane board of directors, with the unanimous recommendation of a special committee of the Keane board of directors solely with respect to the Keane share issuance proposal, unanimously recommends that Keane stockholders vote “FOR” each of the proposals to be considered at the Keane special meeting.

Concurrently with the execution of the Merger Agreement, C&J entered into a support agreement and irrevocable proxy with Keane Investor Holdings LLC (“Keane Investor”), which owns approximately 49.2% of the outstanding shares of Keane common stock, and Cerberus Capital Management, L.P., an affiliate of Keane Investor, pursuant to which Keane Investor and Cerberus Capital Management, L.P. have agreed, subject to the terms and conditions thereof, to vote Keane Investor’s shares in favor of the Keane share issuance proposal at the Keane special meeting.

We cannot complete the merger unless the C&J stockholders approve the C&J merger proposal and the Keane stockholders approve the Keane share issuance proposal. Your vote on these matters is very important regardless of the number of shares you own. Whether or not you plan to attend your respective special meeting in person, please promptly mark, sign and date the accompanying proxy and return it in the enclosed postage-paid envelope or, if you are a C&J stockholder, authorize the individuals named on your proxy card to vote your shares by calling the toll-free telephone number or by using the Internet as described in the instructions included with your proxy card.

The accompanying joint proxy statement/prospectus provides you with important information about the special meetings, the merger, and each of the proposals. We encourage you to read the entire document carefully, in particular the “Risk Factors” section beginning on page 34, for a discussion of risks relating to the merger and the Combined Company following the merger.

We look forward to the successful completion of the merger.

Sincerely,

 

LOGO    LOGO

Donald J. Gawick

Chief Executive Officer, President and Director

C&J Energy Services, Inc.

  

Robert W. Drummond

Chief Executive Officer and Director

Keane Group, Inc.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the merger or the issuance of Keane common stock to be issued in the merger or determined if this joint proxy statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

This joint proxy statement/prospectus is dated September 6, 2019 and is first being mailed to the stockholders of C&J and Keane with the proxy card on or about September 23, 2019.


Table of Contents

LOGO

C&J Energy Services, Inc.

3990 Rogerdale Rd.

Houston, TX 77042

(713) 325-6000

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON OCTOBER 22, 2019

To the Stockholders of C&J Energy Services, Inc.:

Notice is hereby given that C&J Energy Services, Inc. (“C&J”) will hold a special meeting of its stockholders (the “C&J Special Meeting”) at C&J’s headquarters at 3990 Rogerdale Rd., Houston, TX 77042, on October 22, 2019, beginning at 9:30 a.m. Central Time, for the purpose of considering and voting on the following proposals:

 

  1.

to adopt the Agreement and Plan of Merger, dated as of June 16, 2019 (as it may be amended from time to time, the “Merger Agreement”), a copy of which is attached as Annex A to the joint proxy statement/prospectus of which this notice is a part, by and among Keane Group, Inc. (“Keane”), King Merger Sub Corp., a wholly owned subsidiary of Keane (“Merger Sub”), and C&J, pursuant to which Merger Sub will merge with and into C&J, with C&J surviving the merger as a wholly owned subsidiary of Keane, and each outstanding share of C&J’s common stock, par value $0.01 (“C&J Common Stock”) (with certain exceptions described in the accompanying joint proxy statement/prospectus) will be cancelled and converted into the right to receive 1.6149 shares of Keane’s common stock, par value $0.01 per share (the “C&J Merger Proposal”);

 

  2.

to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to C&J’s named executive officers in connection with the merger (the “C&J Compensation Proposal”); and

 

  3.

to approve the adjournment of the C&J Special Meeting to solicit additional proxies if there are not sufficient votes at the time of the C&J Special Meeting to approve the C&J Merger Proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to C&J stockholders (the “C&J Adjournment Proposal”).

C&J will transact no other business at the C&J Special Meeting except such business as may properly be brought before the C&J Special Meeting or any adjournment or postponement thereof. The accompanying joint proxy statement/prospectus, including the Merger Agreement attached thereto as Annex A, contains further information with respect to these matters.

Only holders of record of C&J Common Stock at the close of business on September 18, 2019, the record date for voting at the C&J Special Meeting (the “C&J Record Date”), are entitled to notice of and to vote at the C&J Special Meeting and any adjournments or postponements thereof.

The board of directors of C&J (the “C&J Board”) has unanimously approved and declared advisable the Merger Agreement and the transactions contemplated by the Merger Agreement, including the merger, on the terms and subject to the conditions set forth in the Merger Agreement. The C&J Board unanimously recommends that C&J stockholders vote “FOR” the C&J Merger Proposal, “FOR” the C&J Compensation Proposal and “FOR” the C&J Adjournment Proposal.

Your vote is very important regardless of the number of shares of C&J Common Stock you own. C&J cannot complete the transactions contemplated by the Merger Agreement, including the merger, without approval of the C&J Merger Proposal. Assuming a quorum is present, the approval of the C&J Merger Proposal requires the affirmative vote of a majority of the outstanding shares of C&J Common Stock entitled to vote on the C&J Merger Proposal.


Table of Contents

Whether or not you plan to attend the C&J Special Meeting in person, C&J urges you to please promptly mark, sign and date the accompanying proxy and return it in the enclosed postage-paid envelope, call the toll-free telephone number or use the Internet as described in the instructions included with the proxy card, so that your shares may be represented and voted at the C&J Special Meeting. If you hold your shares through a broker, bank or other nominee in “street name” (instead of as a registered holder) and you wish to vote in person at the C&J Special Meeting, you must obtain a legal proxy from your bank, broker or other nominee and bring the legal proxy to the meeting in order to vote in person. You will need to bring identification and either your notice of special meeting or proof of stock ownership to enter the C&J Special Meeting. The use of video, still photography or audio recording at the C&J Special Meeting is not permitted. For the safety of attendees, all bags, packages and briefcases are subject to inspection.

If you have any questions about the merger, please contact C&J at (713) 325-6000 or write to C&J Energy Services, Inc., Attn: Corporate Secretary, 3990 Rogerdale Rd., Houston, TX 77042.

If you have any questions about how to vote or direct a vote in respect of your shares of C&J Common Stock, you may contact C&J’s proxy solicitor:

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, NY 10022

Shareholders may call toll free: (888) 750-5834

Banks and Brokers may call collect: (212) 750-5833

 

By Order of the Board of Directors,
LOGO
Danielle Hunter
Executive Vice President, General Counsel, Chief Risk and Compliance Officer and Corporate Secretary

Houston, Texas

 

Your vote is important. C&J stockholders are requested to complete, date, sign and return the enclosed proxy card in the envelope provided, which requires no postage if mailed in the United States, or to submit their votes electronically through the Internet or by telephone.


Table of Contents

LOGO

Keane Group, Inc.

1800 Post Oak Boulevard, Suite 450

Houston, TX 77056

(713) 357-9490

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON OCTOBER 22, 2019

To the Stockholders of Keane Group, Inc.:

Notice is hereby given that Keane Group, Inc. (“Keane”) will hold a special meeting of its stockholders (the “Keane Special Meeting”) at Keane’s headquarters at 1800 Post Oak Boulevard, Suite 450, Houston, TX 77056, on October 22, 2019, beginning at 9:30 a.m. Central Time, for the purpose of considering and voting on the following proposals:

 

  1.

to approve the issuance of shares of Keane’s common stock, par value $0.01 per share (the “Keane Common Stock”), to stockholders of C&J Energy Services, Inc. (“C&J”) in connection with the Agreement and Plan of Merger, dated as of June 16, 2019 (as it may be amended from time to time, the “Merger Agreement”), a copy of which is attached as Annex A to the joint proxy statement/prospectus of which this notice is a part, by and among C&J, Keane and King Merger Sub Corp., a wholly owned subsidiary of Keane (“Merger Sub”), pursuant to which Merger Sub will merge with and into C&J, with C&J surviving the merger as a wholly owned subsidiary of Keane (the “Keane Share Issuance Proposal”);

 

  2.

to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Keane’s named executive officers in connection with the merger (the “Keane Compensation Proposal”); and

 

  3.

to approve the adjournment of the Keane Special Meeting to solicit additional proxies if there are not sufficient votes at the time of the Keane Special Meeting to approve the Keane Share Issuance Proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Keane stockholders (the “Keane Adjournment Proposal”).

Keane will transact no other business at the Keane Special Meeting except such business as may properly be brought before the Keane Special Meeting or any adjournment or postponement thereof. The accompanying joint proxy statement/prospectus, including the Merger Agreement attached thereto as Annex A, contains further information with respect to these matters.

Only holders of record of Keane Common Stock at the close of business on September 18, 2019, the record date for voting at the Keane Special Meeting (the “Keane Record Date”), are entitled to notice of and to vote at the Keane Special Meeting and any adjournments or postponements thereof.

The board of directors of Keane (the “Keane Board”), upon the unanimous recommendation of a special committee of the Keane Board composed solely of independent and disinterested members of the Keane Board (the “Keane Special Committee”) solely with respect to the Keane Share Issuance Proposal, has unanimously determined that the Merger Agreement and the merger and the other transactions contemplated by the Merger Agreement are fair to, and in the best interests of, Keane and the holders of shares of Keane Common Stock (other than Keane Investor Holdings LLC (“Keane Investor”) and its affiliates). The Keane Board, with the unanimous recommendation of the Keane Special Committee solely with respect to the Keane Share Issuance Proposal, unanimously recommends that Keane stockholders vote “FOR” the Keane Share Issuance Proposal, “FOR” the Keane Compensation Proposal and “FOR” the Keane Adjournment Proposal.


Table of Contents

Your vote is very important regardless of the number of shares of Keane Common Stock you own. Keane cannot complete the transactions contemplated by the Merger Agreement without approval of the Keane Share Issuance Proposal. Assuming a quorum is present, the approval of the Keane Share Issuance Proposal requires the affirmative vote of a majority of votes cast by Keane stockholders entitled to vote thereon and present in person or represented by proxy at the Keane Special Meeting.

Whether or not you plan to attend the Keane Special Meeting in person, Keane urges you to please promptly mark, sign and date the accompanying proxy and return it in the enclosed postage-paid envelope so that your shares may be represented and voted at the Keane Special Meeting. If you hold your shares through a broker, bank or other nominee in “street name” (instead of as a registered holder) and you wish to vote in person at the Keane Special Meeting, you must obtain a legal proxy from your bank, broker or other nominee and bring the legal proxy to the meeting in order to vote in person. You will need to bring identification and either your notice of special meeting or proof of stock ownership to enter the Keane Special Meeting. The use of video, still photography or audio recording at the Keane Special Meeting is not permitted. For the safety of attendees, all bags, packages and briefcases are subject to inspection.

If you have any questions about the merger, please contact Keane at (713) 357-9490 or write to Keane Group, Inc., Attn: Corporate Secretary, 1800 Post Oak Boulevard, Suite 450, Houston, TX 77056.

If you have any questions about how to vote or direct a vote in respect of your shares of Keane Common Stock, you may contact Keane’s proxy solicitor:

MacKenzie Partners, Inc.

1407 Broadway

New York, New York 10018

Stockholders, banks and brokers call: (800) 322-2885

 

By Order of the Board of Directors,
LOGO
Kevin M. McDonald
Executive Vice President, General Counsel & Corporate Secretary

Houston, Texas

 

Your vote is important. Keane stockholders are requested to complete, date, sign and return the enclosed proxy card in the envelope provided, which requires no postage if mailed in the United States.


Table of Contents

ADDITIONAL INFORMATION

Each of C&J and Keane files annual, quarterly and current reports, proxy statements and other business and financial information with the Securities and Exchange Commission (the “SEC”). C&J and Keane file reports and other business and financial information with the SEC electronically, and the SEC maintains a website located at www.sec.gov containing this information. You can also obtain these documents for free from C&J at investors.cjenergy.com/sec-filings and from Keane at investors.keanegrp.com/sec-filings, as applicable. The information contained on, or that may be accessed through, the respective websites of C&J and Keane is not incorporated by reference into, and is not a part of, this joint proxy statement/prospectus.

Keane has filed a registration statement on Form S-4, of which this joint proxy statement/prospectus forms a part. As permitted by SEC rules, this joint proxy statement/prospectus does not contain all of the information included in the registration statement or in the exhibits or schedules to the registration statement. You may read the registration statement, including any amendments, schedules and exhibits at the SEC’s website mentioned above. Statements contained in this joint proxy statement/prospectus as to the contents of any contract or other documents referred to in this joint proxy statement/prospectus are not necessarily complete. In each case, you should refer to the copy of the applicable agreement or other document filed as an exhibit to the registration statement. This joint proxy statement/prospectus incorporates important business and financial information about C&J and Keane from documents that are not attached to this joint proxy statement/prospectus. This information is available to you without charge upon your written or oral request. You can obtain the documents incorporated by reference into this joint proxy statement/prospectus, including copies of financial statements and management’s discussion and analysis, free of charge by requesting them in writing or by telephone from the appropriate company at the following addresses and telephone numbers:

 

For C&J stockholders:

   For Keane stockholders:

C&J Energy Services, Inc.

3990 Rogerdale Rd.

Houston, TX 77042

(713) 325-6000

Attention: Corporate Secretary

  

Keane Group, Inc.

1800 Post Oak Boulevard, Suite 450

Houston, TX 77056

(713) 357-9490

Attention: Corporate Secretary

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, NY 10022

Shareholders may call toll free: (888) 750-5834

Banks and Brokers may call collect: (212) 750-5833

  

MacKenzie Partners, Inc.

1407 Broadway

New York, New York 10018

Stockholders, banks and brokers call: (800) 322-2885

If you would like to request any documents, please do so by October 15, 2019, which is five business days prior to the date of the C&J Special Meeting and the Keane Special Meeting, in order to receive them before the applicable meeting.

For a more detailed description of the information incorporated by reference into this joint proxy statement/prospectus and how you may obtain it, please see “Where You Can Find More Information.”


Table of Contents

ABOUT THIS JOINT PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form S-4 filed with the SEC by Keane, constitutes a prospectus of Keane under Section 5 of the Securities Act of 1933 (as amended, the “Securities Act”) with respect to the shares of common stock of Keane to be issued to C&J stockholders pursuant to the Merger Agreement. This document also constitutes a joint proxy statement of C&J and Keane under Section 14(a) of the Securities Exchange Act of 1934 (as amended, the “Exchange Act”). It also constitutes a notice of meeting with respect to each of the C&J Special Meeting and the Keane Special Meeting.

You should rely only on the information contained in or incorporated by reference into this joint proxy statement/prospectus. C&J and Keane have not authorized anyone to provide you with information that is different from that contained in or incorporated by reference into this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated September 6, 2019, and you should not assume that the information contained in this joint proxy statement/prospectus is accurate as of any date other than such date unless otherwise specifically provided herein.

Further, you should not assume that the information incorporated by reference into this joint proxy statement/prospectus is accurate as of any date other than the date of the incorporated document. Neither the mailing of this joint proxy statement/prospectus to C&J stockholders or Keane stockholders nor the issuance by Keane of shares of its common stock pursuant to the Merger Agreement will create any implication to the contrary.

This joint proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. C&J has supplied all information contained or incorporated by reference into this joint proxy statement/prospectus relating to C&J, and Keane has supplied all such information relating to Keane. C&J and Keane have both contributed to the information related to the merger contained in this joint proxy statement/prospectus.

All references in this joint proxy statement/prospectus to “C&J” refer to C&J Energy Services, Inc., a Delaware corporation. All references in this joint proxy statement/prospectus to “Keane” refer to Keane Group, Inc., a Delaware corporation. All references in this joint proxy statement/prospectus to “Merger Sub” refers to King Merger Sub Corp., a Delaware corporation and a wholly owned subsidiary of Keane. All references in this joint proxy statement/prospectus to the “Combined Company” refer to Keane immediately following completion of the merger and the other transactions contemplated by the Merger Agreement. All references in this joint proxy statement/prospectus to “C&J Common Stock” refer to the common stock of C&J, par value $0.01 per share, and all references in this joint proxy statement/prospectus to “Keane Common Stock” refer to the common stock of Keane, par value $0.01 per share. All references in this joint proxy statement/prospectus to “Merger Agreement” refer to the Agreement and Plan of Merger, dated as of June 16, 2019, as it may be amended. All references in this joint proxy statement/prospectus to the “Exchange Ratio” refer to the ratio of 1.6149 shares of Keane Common Stock per outstanding share of C&J Common Stock that will be issued to C&J stockholders in connection with the merger.


Table of Contents

TABLE OF CONTENTS

 

     Page  

QUESTIONS AND ANSWERS

     i  

SUMMARY

     1  

The Parties to the Merger

     1  

The Merger and the Merger Agreement

     1  

Exchange Ratio

     2  

C&J Pre-closing Cash Dividend

     2  

The C&J Special Meeting

     2  

The Keane Special Meeting

     3  

Support Agreement

     4  

Recommendation of the C&J Board and Reasons for the Merger

     5  

Recommendation of the Keane Board and Reasons for the Merger

     6  

Opinion of C&J’s Financial Advisor

     6  

Opinion of Keane’s Financial Advisor

     7  

Opinion of the Keane Special Committee’s Financial Advisor

     7  

Board of Directors and Management of the Combined Company

     8  

Interests of C&J’s Directors and Executive Officers in the Merger

     8  

Treatment of Existing C&J Long-Term Incentive Awards in the Merger

     9  

Interests of Keane’s Directors and Executive Officers in the Merger

     10  

Treatment of Existing Keane Equity Awards in the Merger

     10  

Certain Beneficial Owners of C&J Common Stock

     11  

Certain Beneficial Owners of Keane Common Stock

     11  

Ownership of the Combined Company after the Merger

     11  

Conditions to the Completion of the Merger

     12  

No Solicitation of Acquisition Proposals

     14  

No Change of Recommendation

     15  

C&J Special Meeting

     16  

Keane Special Meeting

     16  

Termination of the Merger Agreement

     16  

Termination Fees

     17  

Expense Reimbursement

     18  

Stockholders’ Agreement

     19  

Accounting Treatment

     19  

Material U.S. Federal Income Tax Consequences

     20  

Comparison of Stockholders’ Rights

     20  

Listing of Keane Common Stock; Delisting and Deregistration of C&J Common Stock and Warrants

     20  

Regulatory Approvals

     21  

Appraisal Rights

     21  

Litigation Related to the Merger

     21  

Risk Factors

     22  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF C&J

     23  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF KEANE

     26  

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     31  

COMPARATIVE HISTORICAL AND UNAUDITED PER SHARE INFORMATION

     32  

MARKET PRICE INFORMATION

     33  

RISK FACTORS

     34  

Risks Relating to the Merger

     34  

Risks Relating to the Combined Company

     44  

Risks Relating to C&J’s Business

     48  

Risks Relating to Keane’s Business

     48  

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     49  


Table of Contents

THE PARTIES TO THE MERGER

     51  

C&J Energy Services, Inc.

     51  

Keane Group, Inc.

     51  

King Merger Sub Corp.

     51  

THE C&J SPECIAL MEETING

     52  

General

     52  

Date, Time and Place of the C&J Special Meeting

     52  

Matters to Be Considered at the C&J Special Meeting

     52  

Recommendation of the C&J Board of Directors

     52  

Attending the C&J Special Meeting

     53  

Record Date for the C&J Special Meeting and Voting Rights

     53  

Quorum and Broker Non-Votes

     54  

Vote Required

     54  

Methods of Voting

     55  

Proxies and Revocation

     56  

Proxy Solicitation Costs

     57  

Inspector of Election

     57  

Adjournments

     57  

Appraisal Rights

     57  

Other Matters

     57  

Householding of Special Meeting Materials

     57  

Questions and Additional Information

     58  

C&J PROPOSAL 1—ADOPTION OF THE MERGER AGREEMENT

     59  

C&J PROPOSAL 2—NON-BINDING ADVISORY VOTE ON MERGER-RELATED COMPENSATION FOR NAMED EXECUTIVE OFFICERS

     60  

C&J PROPOSAL 3—ADJOURNMENT OF THE C&J SPECIAL MEETING

     61  

THE KEANE SPECIAL MEETING

     62  

General

     62  

Date, Time and Place of the Keane Special Meeting

     62  

Matters to be Considered at the Keane Special Meeting

     62  

Recommendation of the Keane Board of Directors

     62  

Attending the Keane Special Meeting

     63  

Record Date for the Keane Special Meeting and Voting Rights

     63  

Quorum and Broker Non-Votes

     63  

Vote Required

     64  

Methods of Voting

     65  

Proxies and Revocation

     66  

Proxy Solicitation Costs

     66  

Householding

     67  

Inspector of Election

     67  

Adjournments

     67  

Assistance

     67  

KEANE PROPOSAL 1—SHARE ISSUANCE

     68  

KEANE PROPOSAL 2—NON-BINDING ADVISORY VOTE ON MERGER-RELATED COMPENSATION FOR NAMED EXECUTIVE OFFICERS

     69  

KEANE PROPOSAL 3—ADJOURNMENT OF THE KEANE SPECIAL MEETING

     70  

THE MERGER

     71  

Transaction Structure

     71  

Background of the Merger

     71  

Recommendation of the C&J Board and Reasons for the Merger

     85  

Recommendation of the Keane Board and Reasons for the Merger

     91  

Certain C&J Unaudited Prospective Financial and Operating Information

     94  

Opinion of C&J’s Financial Advisor

     97  

Certain Keane Unaudited Prospective Financial and Operating Information

     108  


Table of Contents

Opinion of Keane’s Financial Advisor

     110  

Opinion of the Keane Special Committee’s Financial Advisor

     118  

Certain Estimated Cost Synergies

     125  

Board of Directors and Management of the Combined Company

     125  

Interests of C&J’s Directors and Executive Officers in the Merger

     126  

Treatment of Existing C&J Long-Term Incentive Awards in the Merger

     127  

Interests of Keane’s Directors and Executive Officers in the Merger

     134  

Treatment of Existing Keane Equity Awards in the Merger

     135  

Indemnification and Insurance

     140  

Dividend Policy

     140  

Appraisal Rights and Dissenters’ Rights

     141  

Litigation Related to the Merger

     141  

THE MERGER AGREEMENT

     143  

Explanatory Note Regarding the Merger Agreement

     143  

Structure of the Merger

     143  

Completion and Effectiveness of the Merger

     144  

Merger Consideration

     144  

C&J Pre-closing Cash Dividend

     144  

C&J Registration Rights

     145  

Treatment of C&J Warrants

     145  

Governance

     145  

Name

     145  

Headquarters

     145  

Accounting Treatment

     145  

Exchange of Shares

     146  

Termination of the Exchange Fund

     147  

Lost, Stolen or Destroyed Share Certificates

     147  

Withholding Rights

     148  

Adjustments to Prevent Dilution

     148  

Representations and Warranties

     148  

Covenants

     151  

Conditions to the Completion of the Merger

     167  

Termination of the Merger Agreement

     169  

Regulatory Approvals

     172  

Amendment

     173  

Waiver

     173  

Specific Performance

     173  

Third-Party Beneficiaries

     173  

Support Agreement

     174  

Stockholders’ Agreement

     175  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

     176  

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

     185  

U.S. Holders

     186  

Non-U.S. Holders

     187  

The Cash Dividend

     188  

FATCA Withholding

     189  

Backup Withholding and Information Reporting

     189  

COMPARISON OF STOCKHOLDERS’ RIGHTS

     190  

LEGAL MATTERS

     210  

EXPERTS

     211  

CERTAIN BENEFICIAL OWNERS OF C&J COMMON STOCK

     212  

CERTAIN BENEFICIAL OWNERS OF KEANE COMMON STOCK

     214  

STOCKHOLDER PROPOSALS

     216  

C&J

     216  


Table of Contents


Table of Contents

QUESTIONS AND ANSWERS

The following are some questions that you, as a stockholder of C&J or Keane, may have regarding the merger and the other matters being considered at the special meetings of each company’s stockholders, and brief answers to those questions. You are urged to carefully read this joint proxy statement/prospectus and the other documents referred to in this joint proxy statement/prospectus in their entirety. Additional important information is contained in the annexes to, and the documents incorporated by reference into, this joint proxy statement/prospectus. You may obtain the information incorporated by reference in this joint proxy statement/prospectus for free by following the instructions in “Where You Can Find More Information.”

 

Q:

Why am I receiving this joint proxy statement/prospectus?

 

A:

You are receiving this joint proxy statement/prospectus because C&J and Keane have agreed to combine their companies in a merger of equals. Following completion of the merger, the Combined Company will be renamed. C&J and Keane expect to announce the name of the Combined Company prior to the C&J Special Meeting and the Keane Special Meeting. As referred to in this joint proxy statement/prospectus, the “effective time” means the date and time when the certificate of merger has been duly filed with and accepted by the Secretary of State of the State of Delaware, or such later date and time as may be agreed by C&J and Keane in writing and specified in the certificate of merger. The Merger Agreement governs the terms of the merger of equals of C&J and Keane and is attached to this joint proxy statement/prospectus as Annex A.

In order to complete the merger, among other things:

 

   

C&J stockholders must adopt the Merger Agreement in accordance with the Delaware General Corporation Law (the “DGCL”); and

 

   

Keane stockholders must approve the issuance of Keane Common Stock to current C&J stockholders pursuant to the Merger Agreement in accordance with the Listed Company Manual of the New York Stock Exchange (the “NYSE”).

This joint proxy statement/prospectus serves as the proxy statement through which C&J and Keane will solicit proxies to obtain the necessary stockholder approvals for the merger. It also serves as the prospectus by which Keane will issue shares of its common stock as consideration in the merger.

This joint proxy statement/prospectus, which you should carefully read in its entirety, contains important information about the merger, the share issuance and other matters.

 

Q:

What will happen in the merger?

 

A:

The Merger Agreement sets forth the terms and conditions of the proposed merger of equals of C&J and Keane. Under the Merger Agreement, Merger Sub will merge with and into C&J, with C&J as the surviving corporation and wholly owned subsidiary of Keane, and immediately thereafter, as part of the same transaction, C&J will merge with and into another wholly owned subsidiary of Keane (such mergers, together, the “Integrated Mergers”), with such subsidiary continuing as the surviving entity.

The Merger Agreement is attached to this joint proxy statement/prospectus as Annex A. For a more complete discussion of the proposed merger, its effects and the other transactions contemplated by the Merger Agreement, please see “The Merger” elsewhere in this joint proxy statement/prospectus.

 

Q:

What is C&J’s strategic rationale for the merger?

 

A:

In reaching its determination and recommendation, the C&J Board consulted with C&J management and its outside legal and financial advisors, and considered the business, assets and liabilities, results of operations, financial performance, strategic direction and prospects of both C&J and Keane. In evaluating the expected pro forma effect of the proposed merger of equals on the Combined Company and its ability to achieve future growth and generate additional returns for C&J stockholders, the C&J Board considered a number of

 

i


Table of Contents
  factors, including that the Combined Company would have significant scale and value as a large, diversified well completion and production services company with a strong presence in the most active U.S. basins, as well as an enhanced financial position with a strong balance sheet capable of enabling opportunities for further innovation and financial flexibility. Further, the merger of equals is expected to create runway for earnings growth via additional revenue generation, improved efficiencies and cost reductions, be immediately (after the payment of certain one-time transaction costs) accretive to cash flow per share with greater potential for increased operating cash flow generation and generate $100 million of expected annualized run-rate cost synergies, all of which should benefit the Combined Company and the C&J stockholders.

 

Q:

What is Keane’s strategic rationale for the merger?

 

A:

In reaching its determinations and recommendations, the Keane Board and the Keane Special Committee each consulted with Keane management and its outside legal and financial advisors, and considered a number of factors, including that the merger will create a leading well completion and production services company in the U.S., with increased scale and density across services and geographies with a prominent presence in the most active U.S. basins. Both C&J and Keane share a commitment to safety and integrity, employee development, partnerships with blue-chip customers, technological innovation, and strong community relationships, all of which will be reflected in the operations of the Combined Company. In addition, the two companies anticipate achieving annualized run-rate cost synergies of $100 million within 12 months after closing and the Combined Company will have flexibility to invest in growth and technology and return capital to stockholders.

 

Q:

What am I being asked to vote on?

 

A:

C&J is holding a special meeting of its stockholders to vote on the adoption of the Merger Agreement, pursuant to which each outstanding share of C&J Common Stock (other than shares of C&J Common Stock owned by C&J, excluding any such shares of C&J Common Stock owned by a C&J benefits plan or held on behalf of third parties (the “C&J Excluded Shares”)) will be cancelled and converted into the right to receive 1.6149 shares of Keane Common Stock. C&J stockholders will also be asked to approve, on a non-binding advisory basis, the merger-related compensation payments that will or may be paid by C&J to its named executive officers in connection with the merger and to approve the proposal to adjourn the C&J Special Meeting to solicit additional proxies if there are not sufficient votes at the time of the C&J Special Meeting to approve the C&J Merger Proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to C&J stockholders.

Keane is holding a special meeting of its stockholders, to obtain approval of the issuance of Keane Common Stock to C&J stockholders in connection with the merger. Keane stockholders will also be asked to approve, on a non-binding advisory basis, the merger-related compensation payments that will or may be paid by Keane to its named executive officers in connection with the merger, and to approve the proposal to adjourn the Keane Special Meeting to solicit additional proxies if there are not sufficient votes at the time of the Keane Special Meeting to approve the Keane Share Issuance Proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to Keane stockholders.

Your vote is very important, regardless of the number of shares that you own. The approval of the C&J Merger Proposal by the C&J stockholders and the approval of the Keane Share Issuance Proposal by the Keane stockholders are conditions to the obligations of C&J and Keane to complete the merger. None of the approvals of the C&J Compensation Proposal, the Keane Compensation Proposal, the C&J Adjournment Proposal or the Keane Adjournment Proposal are conditions to the obligations of C&J or Keane to complete the merger.

 

ii


Table of Contents
Q:

When and where will each of the special meetings take place?

 

A:

The C&J Special Meeting will be held at C&J’s headquarters at 3990 Rogerdale Rd., Houston, TX 77042, on October 22, 2019, at 9:30 a.m. Central Time.

The Keane Special Meeting will be held at Keane’s headquarters at 1800 Post Oak Boulevard, Suite 450, Houston, TX 77056, on October 22, 2019, at 9:30 a.m. Central Time.

If you choose to vote your shares in person at your respective company’s special meeting, please bring all required documentation as described in “The C&J Special Meeting—Attending the C&J Special Meeting,” with respect to the C&J Special Meeting, and “The Keane Special Meeting—Attending the Keane Special Meeting,” with respect to the Keane Special Meeting. The use of video, still photography or audio recording at the special meetings is not permitted. For the safety of attendees, all bags, packages and briefcases are subject to inspection.

Even if you plan to attend your respective company’s special meeting, C&J and Keane recommend that you vote your shares in advance as described below so that your vote will be counted if you later decide not to or become unable to attend the applicable special meeting. Shares held in “street name” may be voted in person by you only if you obtain a signed legal proxy from your bank, broker or other nominee giving you the right to directly vote the shares.

 

Q:

How important is my vote?

 

A:

Your vote “FOR” each proposal presented at the C&J Special Meeting or the Keane Special Meeting, as applicable, is very important, and you are encouraged to submit a proxy as soon as possible. The merger between C&J and Keane cannot be completed without the approval of the C&J Merger Proposal by the C&J stockholders and the approval of the Keane Share Issuance Proposal by the Keane stockholders.

C&J. Approval of the C&J Merger Proposal requires the affirmative vote of a majority of the outstanding shares of C&J Common Stock entitled to vote thereon. Accordingly, a C&J stockholder’s abstention from voting, a broker non-vote or the failure of a C&J stockholder to vote (including the failure of a C&J stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have the same effect as a vote “against” the C&J Merger Proposal. Approval of the C&J Compensation Proposal and the C&J Adjournment Proposal requires the affirmative vote of a majority of votes cast by C&J stockholders entitled to vote thereon and present in person or represented by proxy at the C&J Special Meeting. Accordingly, a C&J stockholder’s abstention from voting, a broker non-vote or the failure of a C&J stockholder to vote (including the failure of a C&J stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have no effect on the C&J Compensation Proposal or the C&J Adjournment Proposal. Regardless of whether there is a quorum, the chairman of the C&J Special Meeting may also adjourn the C&J Special Meeting.

Keane. Approval of each of the Keane Share Issuance Proposal, Keane Compensation Proposal and Keane Adjournment Proposal requires the affirmative vote of a majority of votes cast by Keane stockholders entitled to vote thereon and present in person or represented by proxy at the Keane Special Meeting. Accordingly, a Keane stockholder’s abstention from voting, a broker non-vote or the failure of a Keane stockholder to vote (including the failure of a Keane stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have no effect on the Keane Share Issuance Proposal, the Keane Compensation Proposal or the Keane Adjournment Proposal. Regardless of whether there is a quorum, the chairman of the Keane Special Meeting may also adjourn the Keane Special Meeting.

Keane Investor, which owns approximately 49.2% of the outstanding shares of Keane Common Stock, and Cerberus Capital Management, L.P. (“Cerberus”), an affiliate of Keane Investor, are party to a Support Agreement, as defined in “The Merger Agreement—Support Agreement,” with C&J, pursuant to which

 

iii


Table of Contents

Keane Investor and Cerberus have agreed, subject to the terms and conditions thereof including with respect to the percentage of Keane Investor’s shares required to be voted in favor in the event of a Change of Recommendation, as defined in “The Merger Agreement—Covenants—No Change of Recommendation,” by Keane to vote Keane Investor’s shares in favor of the Keane Share Issuance Proposal at the Keane Special Meeting. For more information, please see “The Merger Agreement—Support Agreement.”

 

Q:

What will I receive if the merger is completed?

 

A:

If the merger is completed, each share of C&J Common Stock outstanding at the effective time will be converted into the right to receive 1.6149 shares of Keane Common Stock. Each C&J stockholder will receive cash for any fractional shares of Keane Common Stock that such stockholder would otherwise receive in the merger. Any cash amounts to be received by a C&J stockholder in respect of fractional shares will be aggregated and rounded to the nearest whole cent.

If the merger is completed, Keane stockholders’ shares of Keane Common Stock will constitute shares of the Combined Company.

Because Keane will issue a fixed number of shares of Keane Common Stock in exchange for each share of C&J Common Stock, the value of the merger consideration that C&J stockholders will receive in the merger will depend on the market price of shares of Keane Common Stock at the effective time. The market price of shares of Keane Common Stock that C&J stockholders receive at the effective time could be greater than, less than or the same as the market price of shares of Keane Common Stock on the date of this joint proxy statement/prospectus or at the time of the special meetings. Accordingly, you should obtain current market quotations for C&J Common Stock and Keane Common Stock before deciding how to vote with respect to the C&J Merger Proposal and Keane Share Issuance Proposal, as applicable. The C&J Common Stock and Keane Common Stock are traded on the NYSE under the symbols “CJ” and “FRAC,” respectively. Shares of common stock, par value $0.01 per share, of the Combined Company (the “Combined Company Common Stock”) are expected to trade on the NYSE under a new ticker symbol. C&J and Keane expect to announce the ticker symbol of the Combined Company prior to the C&J Special Meeting and the Keane Special Meeting.

For more information regarding the merger consideration to be received by C&J stockholders if the merger is completed, please see “The Merger Agreement—Merger Consideration.”

 

Q:

Will holders of C&J Common Stock receive anything other than the merger consideration?

 

A:

The C&J Board has declared, subject to the C&J Board making a determination that surplus exists under Delaware law, a dividend of $1.00 per share of C&J Common Stock (the “Pre-closing Cash Dividend”). If the C&J Board determines that C&J has sufficient surplus to pay the Pre-closing Cash Dividend, it will be paid prior to the effective time of the merger to the holders of record of C&J Common Stock as of the record date for the Pre-closing Cash Dividend. The Pre-closing Cash Dividend is not merger consideration.

 

Q:

Who will own the Combined Company immediately following the merger?

 

A:

C&J and Keane estimate that upon completion of the merger, current C&J stockholders, collectively, and current Keane stockholders, collectively, will each own approximately 50% of the outstanding Combined Company Common Stock.

 

Q:

Will C&J equity and other long-term incentive awards be affected by the merger?

 

A:

The Merger Agreement specifies that the merger will be deemed to constitute a “change in control” (or term of similar meaning) at the effective time for purposes of C&J’s and Keane’s benefit plans, policies, programs or agreements (including employment agreements and C&J’s and Keane’s stock plans).

 

iv


Table of Contents

Each option to purchase shares of C&J Common Stock (a “C&J Option”), whether vested or unvested, that is outstanding immediately prior to the effective time will, at the effective time, be assumed by Keane and remain subject to the same terms and conditions as were applicable to such C&J Option, but will vest and be converted into an option to purchase a number of shares of Keane Common Stock equal to the product of (i) the number of shares of C&J Common Stock subject to the C&J Option immediately prior to the effective time and (ii) the Exchange Ratio (rounded down to the nearest whole share), with a per share exercise price equal to (a) the per share exercise price applicable to such C&J Option immediately prior to the effective time divided by (b) the Exchange Ratio (rounded up to the nearest whole cent).

Each C&J performance share award (a “C&J Performance Share Award”) that is outstanding immediately prior to the effective time other than a Vested C&J Performance Share Award (as defined below) will, at the effective time, be assumed by Keane and remain subject to the same terms and conditions (including the time-based vesting schedule applicable to such award, but excluding any performance-based vesting requirements) as were applicable to such C&J Performance Share Award, but will be converted into an award with respect to a number of shares of Keane Common Stock (rounded up or down to the nearest whole share) equal to the product of (i) the number of shares of C&J Common Stock subject to such C&J Performance Share Award and (ii) the Exchange Ratio. For purposes of the immediately preceding sentence, the number of shares of C&J Common Stock subject to such C&J Performance Share Award will be deemed to be the number of shares subject to the C&J Performance Share Award assuming the applicable performance metrics were achieved at target levels. C&J Performance Share Awards that are fully vested as of the effective time after taking into account any acceleration upon consummation of the merger in accordance with the terms and conditions of the applicable award agreement pursuant to which such award was granted (such awards, “Vested C&J Performance Share Awards”) will, at the effective time, be deemed to have been settled with shares of C&J Common Stock, and the holders thereof will receive the merger consideration in the same manner as holders of shares of C&J Common Stock.

Each C&J time-based restricted stock unit award (a “C&J RSU Award”) will, at the effective time, be assumed by Keane and remain subject to the same terms and conditions as were applicable to such C&J RSU Award, but will be converted into an award with respect to a number of shares of Keane Common Stock equal to the product of (i) the number of shares of C&J Common Stock subject to the C&J RSU Award immediately prior to the effective time and (ii) the Exchange Ratio.

Each C&J restricted stock award (a “C&J Restricted Stock Award”) will, at the effective time, be assumed by Keane and remain subject to the same terms and conditions as were applicable to such C&J Restricted Stock Award, but will be converted into an award with respect to a number of shares of Keane Common Stock equal to the product of (i) the number of shares of C&J Common Stock subject to the C&J Restricted Stock Award immediately prior to the effective time and (ii) the Exchange Ratio.

Each C&J cash retention award granted pursuant to the C&J Energy Services, Inc. 2017 Management Incentive Plan or the C&J Energy Services 2015 Long Term Incentive Plan (a “C&J Restricted Cash Award”), whether vested or unvested, that is outstanding immediately prior to the effective time and not settled as of the closing date will, at the effective time, be assumed by Keane and remain subject to the same terms and conditions as were applicable to such C&J Restricted Cash Award.

 

Q:

How will Keane stockholders be affected by the merger?

 

A:

Upon completion of the merger, each Keane stockholder will hold the same number of shares of Keane Common Stock that such stockholder held immediately prior to completion of the merger. As a result of the merger, Keane stockholders will own shares in the Combined Company, which will be a larger company with a more diverse business base and lower leverage. However, because Keane will be issuing additional shares of Keane Common Stock to C&J stockholders in exchange for their shares of C&J Common Stock, each share of Keane Common Stock outstanding prior to the merger will represent a smaller percentage of the aggregate number of shares of the Combined Company outstanding after the merger.

 

v


Table of Contents
Q:

Will Keane equity awards be affected by the merger?

 

A:

The Merger Agreement reflects the respective decisions of the C&J Board and the Keane Board that the merger will be deemed to constitute a “change in control” or “change of control” at the effective time for purposes of C&J’s and Keane’s compensation and benefit plans, policies, programs or agreements (including employment agreements and C&J’s and Keane’s stock plans).

Each Keane stock option (a “Keane Option”), Keane time-based restricted stock unit award (a “Keane RSU Award”) and Keane restricted stock award (a “Keane Restricted Stock Award”) that is outstanding immediately before the effective time of the merger will continue to be an award in respect of Keane Common Stock following the merger and subject to the same terms and conditions that were applicable to such award before the effective time. Each Keane performance-based restricted stock unit (a “Keane PSU Award”) held by certain of Keane’s executive officer will be amended to provide that, upon the consummation of the merger, the respective executive officer will become fully vested in his Keane PSU Award, at the target level of achievement.

 

Q:

What will happen to the Keane Equity and Incentive Award Plan?

 

A:

The Keane Equity and Incentive Award Plan will remain in effect in accordance with its terms.

 

Q:

What will the composition of the board of directors of the Combined Company be following completion of the merger?

 

A:

Following the effective time, the board of directors of the Combined Company (the “Combined Company Board”) will consist of twelve directors, comprised of six directors designated by C&J (the “C&J Designees”), which will include the chairman (the “C&J Chairman”) of the C&J Board, and six directors designated by Keane (the “Keane Designees”), which will include the chief executive officer of Keane (the “Keane CEO”). The individuals expected to serve on the Combined Company Board following the effective time include, as C&J Designees: Stuart Brightman, John Kennedy, Steven Mueller, Patrick Murray (the C&J Chairman), Amy Nelson and Michael Roemer, and as Keane Designees: Robert W. Drummond (the Keane CEO), Marc G. R. Edwards, Christian A. Garcia, Gary H. Halverson, James C. Stewart and Scott Wille.

 

Q:

What will the composition of the management of the Combined Company be following completion of the merger?

 

A:

Prior to the effective time, Keane will take all actions necessary to cause, effective as of the effective time, (i) Robert Drummond, the Keane CEO, to be appointed to serve as the chief executive officer of the Combined Company, (ii) Jan Kees van Gaalen, the chief financial officer of C&J, to be appointed to serve as the executive vice president and chief financial officer of the Combined Company and (iii) Greg Powell, the chief financial officer of Keane, to be appointed to serve as executive vice president and chief integration officer of the Combined Company. Prior to the effective time, Keane will take all actions necessary to cause, effective as of the effective time, the executive officers (other than the officers specified in the preceding sentence) of the Combined Company to be those individuals selected by the Keane CEO on a merit basis, with input from the chief executive officer of C&J and the chief financial officers of C&J and Keane, and without consideration of whether the persons selected serve as employees of C&J or Keane prior to the effective time.

 

Q:

How does the C&J Board recommend that I vote at the C&J Special Meeting?

 

A:

The C&J Board unanimously recommends that you vote “FOR” the C&J Merger Proposal, “FOR” the C&J Compensation Proposal and “FOR” the C&J Adjournment Proposal.

In considering the recommendations of the C&J Board, C&J stockholders should be aware that C&J directors and executive officers have interests in the merger that are different from or in addition to their interests as C&J stockholders. These interests may include, among others, the payment of severance benefits

 

vi


Table of Contents

and acceleration of outstanding C&J equity awards upon certain terminations of employment or service, the payment of retention and transaction-related bonuses and the Combined Company’s agreement to indemnify C&J directors and officers against certain claims and liabilities. For a more complete description of these interests, please see “The Merger—Interests of C&J’s Directors and Executive Officers in the Merger.”

 

Q:

How does the Keane Board recommend that I vote at the Keane Special Meeting?

 

A:

The Keane Board, upon the unanimous recommendation of the Keane Special Committee solely with respect to the Keane Share Issuance Proposal, unanimously recommends that you vote “FOR” the Keane Share Issuance Proposal, “FOR” the Keane Compensation Proposal and “FOR” the Keane Adjournment Proposal.

In considering the recommendations of the Keane Board and Keane Special Committee, Keane stockholders should be aware that Keane directors and executive officers have interests in the merger that are different from or in addition to their interests as Keane stockholders. These interests may include, among others, entering into amended and restated employment agreements for certain of Keane’s executive officers in connection with their employment by the Combined Company, payment of severance benefits and acceleration of outstanding Keane equity awards upon a qualifying termination of employment and the payment of retention and transaction-related bonuses. For a more complete description of these interests, please see “The Merger—Interests of Keane’s Directors and Executive Officers in the Merger.”

 

Q:

Who is entitled to vote at the C&J Special Meeting?

 

A:

The C&J Record Date for the C&J Special Meeting is September 18, 2019. All holders of shares of C&J Common Stock who held shares at the close of business on the C&J Record Date are entitled to receive notice of, and to vote at, the C&J Special Meeting. Each such holder of C&J Common Stock is entitled to cast one vote on each matter properly brought before the C&J Special Meeting for each share of C&J Common Stock that such holder owned of record as of the record date. Physical attendance at the special meeting is not required to vote. Please see below and “The C&J Special Meeting—Methods of Voting” for instructions on how to vote your shares without attending the C&J Special Meeting.

C&J is commencing its solicitation of proxies on or about September 23, 2019, and C&J will continue to solicit proxies until the date of the C&J Special Meeting. Each holder of record of C&J Common Stock on the C&J Record Date who has not yet received this joint proxy statement/prospectus will receive this joint proxy statement/prospectus and have the opportunity to vote on the matters described in this joint proxy statement/prospectus. Proxies delivered prior to the C&J Record Date will be valid and effective so long as the holder providing the proxy is a holder on the C&J Record Date. If you are not a holder of record on the C&J Record Date, any proxy you deliver will not be counted. If you deliver a proxy prior to the C&J Record Date and remain a holder on the C&J Record Date, you do not need to deliver another proxy after the C&J Record Date. If you deliver a proxy prior to the C&J Record Date and do not revoke that proxy, your proxy will be deemed to cover the number of shares of C&J Common Stock you own on the C&J Record Date even if that number is different from the number of shares of C&J Common Stock you owned when you executed and delivered your proxy card.

 

Q:

Who is entitled to vote at the Keane Special Meeting?

 

A:

The Keane Record Date for the Keane Special Meeting is September 18, 2019. All holders of shares of Keane Common Stock who held shares at the close of business on the Keane Record Date are entitled to receive notice of, and to vote at, the Keane Special Meeting. Each such holder of Keane Common Stock is entitled to cast one vote on each matter properly brought before the Keane Special Meeting for each share of Keane Common Stock that such holder owned of record as of the record date. Physical attendance at the special meeting is not required to vote. Please see below and “The Keane Special Meeting—Methods of Voting” for instructions on how to vote your shares without attending the Keane Special Meeting.

 

vii


Table of Contents

Keane is commencing its solicitation of proxies on or about September 23, 2019, and Keane will continue to solicit proxies until the date of the Keane Special Meeting. Each holder of record of Keane Common Stock on the Keane Record Date who has not yet received this joint proxy statement/prospectus will receive this joint proxy statement/prospectus and have the opportunity to vote on the matters described in this joint proxy statement/prospectus. Proxies delivered prior to the Keane Record Date will be valid and effective so long as the holder providing the proxy is a holder on the Keane Record Date. If you are not a holder of record on the Keane Record Date, any proxy you deliver will not be counted. If you deliver a proxy prior to the Keane Record Date and remain a holder on the Keane Record Date, you do not need to deliver another proxy after the Keane Record Date. If you deliver a proxy prior to the Keane Record Date and do not revoke that proxy, your proxy will be deemed to cover the number of shares of Keane Common Stock you own on the Keane Record Date even if that number is different from the number of shares of Keane Common Stock you owned when you executed and delivered your proxy card.

 

Q:

What is a proxy?

 

A:

A stockholder’s legal designation of another person to vote shares of such stockholder’s common stock at a special meeting is referred to as a proxy. The document used to designate a proxy to vote your shares of common stock is called a proxy card.

 

Q:

How many votes do I have for the C&J Special Meeting?

 

A:

Each C&J stockholder is entitled to one vote for each share of C&J Common Stock held of record as of the close of business on the C&J Record Date. As of the close of business on August 29, 2019, the latest practicable date prior to the date of this joint proxy statement/prospectus, there were 66,025,630 outstanding shares of C&J Common Stock.

 

Q:

How many votes do I have for the Keane Special Meeting?

 

A:

Each Keane stockholder is entitled to one vote for each share of Keane Common Stock held of record as of the close of business on the Keane Record Date. As of the close of business on August 29, 2019, the latest practicable date prior to the date of this joint proxy statement/prospectus, there were 105,015,124 outstanding shares of Keane Common Stock.

 

Q:

What constitutes a quorum for the C&J Special Meeting?

 

A:

The holders of a majority of the total voting power of all issued and outstanding shares of C&J Common Stock entitled to vote at the C&J Special Meeting must be represented at the C&J Special Meeting in person or by proxy in order to constitute a quorum.

 

Q:

What constitutes a quorum for the Keane Special Meeting?

 

A:

The holders of a majority of the issued and outstanding shares of Keane Common Stock entitled to vote at the Keane Special Meeting must be represented at the Keane Special Meeting in person or by proxy in order to constitute a quorum.

 

Q:

Where will the Combined Company Common Stock be publicly traded?

 

A:

The shares of Combined Company Common Stock are expected to be listed for trading on the NYSE under a new ticker symbol. C&J and Keane expect to announce the ticker symbol of the Combined Company prior to the C&J Special Meeting and the Keane Special Meeting.

 

viii


Table of Contents
Q:

What happens if the merger is not completed?

 

A:

If the C&J Merger Proposal or Keane Share Issuance Proposal is not approved or if the merger is not completed for any other reason, C&J stockholders will not receive any merger consideration for their shares of C&J Common Stock in connection with the merger. Instead, C&J and Keane will each remain independent public companies and the C&J Common Stock and Keane Common Stock will each continue to be separately listed and traded on the NYSE, and Keane will not complete the share issuance pursuant to the Merger Agreement as contemplated by the Keane Share Issuance Proposal. If the Merger Agreement is terminated under certain specified circumstances, C&J or Keane, as applicable, may be required to pay to the other party either a termination fee of $30 million or an expense reimbursement of up to $7.5 million. Please see “The Merger Agreement—Termination of the Merger Agreement—Termination Fees” for a more detailed discussion of the termination fees and expense reimbursement.

 

Q:

What is a “broker non-vote”?

 

A:

Under the NYSE rules, banks, brokers and other nominees may use their discretion to vote “uninstructed” shares (i.e., shares of record held by banks, brokers or other nominees, but with respect to which the beneficial owner of such shares has not provided instructions on how to vote on a particular proposal) with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. All of the proposals currently scheduled for consideration at the C&J Special Meeting and the Keane Special Meeting are “non-routine” matters.

A “broker non-vote” occurs on an item when (i) a bank, broker or other nominee has discretionary authority to vote on one or more proposals to be voted on at a meeting of stockholders, but is not permitted to vote on other proposals without instructions from the beneficial owner of the shares and (ii) the beneficial owner fails to provide the bank, broker or other nominee with such instructions. Because none of the proposals currently scheduled to be voted on at either the C&J Special Meeting or the Keane Special Meeting are routine matters for which brokers may have discretionary authority to vote, C&J and Keane do not expect there to be any broker non-votes at the special meetings.

 

Q:

Why am I being asked to consider and vote on a proposal to approve, by non-binding advisory vote, merger-related compensation arrangements for C&J’s or Keane’s named executive officers (i.e., the C&J Compensation Proposal and the Keane Compensation Proposal, respectively)?

 

A:

Under the SEC rules, C&J and Keane are each required to seek a non-binding advisory vote of their respective stockholders with respect to the compensation that may be paid or become payable to C&J’s or Keane’s respective named executive officers in connection with the merger, also known as “golden parachute” compensation.

 

Q:

What happens if C&J stockholders or Keane stockholders do not approve, by non-binding advisory vote, merger-related compensation arrangements for C&J’s or Keane’s named executive officers (i.e., the C&J Compensation Proposal and the Keane Compensation Proposal, respectively)?

 

A:

The votes on the proposals to approve the merger-related compensation arrangements for each of C&J’s and Keane’s named executive officers are separate and apart from the votes to approve the other proposals being presented at the C&J Special Meeting and the Keane Special Meeting. Because the votes on the proposals to approve the merger-related executive compensation are advisory in nature, they will not be binding upon C&J, Keane or the Combined Company. Accordingly, the merger-related compensation may be paid to C&J’s and Keane’s named executive officers to the extent payable in accordance with the terms of their compensation agreements and arrangements even if C&J stockholders or Keane stockholders do not approve the proposals to approve the merger-related executive compensation.

 

ix


Table of Contents
Q:

What if I hold shares in both C&J and Keane?

 

A:

If you are both a C&J stockholder and a Keane stockholder, you will receive two separate packages of proxy materials. A vote cast as a C&J stockholder will not count as a vote cast as a Keane stockholder, and a vote cast as a Keane stockholder will not count as a vote cast as a C&J stockholder. Please submit separate proxies for your shares of C&J Common Stock and your shares of Keane Common Stock.

 

Q:

How can I vote my shares in person at my respective special meeting?

 

A:

Record Holders. Shares held directly in your name as the stockholder of record of C&J or Keane may be voted in person at the C&J Special Meeting or the Keane Special Meeting, as applicable. If you choose to vote your shares in person at the respective special meeting, please bring required documentation in accordance with “The C&J Special Meeting—Attending the C&J Special Meeting,” with respect to the C&J Special Meeting, and “The Keane Special Meeting—Attending the Keane Special Meeting,” with respect to the Keane Special Meeting.

“Street name” Holders. Shares held in “street name” may be voted in person by you only if you obtain a signed legal proxy from your bank, broker or other nominee giving you the right to vote the shares. If you choose to vote your shares in person at your respective meeting, please bring all required documentation as described in “The C&J Special Meeting—Attending the C&J Special Meeting,” with respect to the C&J Special Meeting, and “The Keane Special Meeting—Attending the Keane Special Meeting,” with respect to the Keane Special Meeting.

Even if you plan to attend your respective meeting, C&J and Keane recommend that you vote your shares in advance as described below so that your vote will be counted even if you later decide not to or become unable to attend the special meeting. The use of video, still photography or audio recording is not permitted at either special meeting. For the safety of attendees, all bags, packages and briefcases are subject to inspection.

Additional information on attending the special meetings can be found under “The C&J Special Meeting” and “The Keane Special Meeting.”

 

Q:

How can I vote my shares without attending my respective special meeting?

 

A:

Whether you hold your shares directly as the stockholder of record of C&J or Keane or beneficially in “street name,” you may direct your vote by proxy without attending your respective special meeting. You can vote by proxy by mail or, if you are a C&J stockholder, over the Internet or by telephone by following the instructions provided in the enclosed proxy card. Please note that if you hold shares beneficially in “street name,” you should follow the voting instructions provided by your bank, broker or other nominee.

Additional information on voting procedures can be found under “The C&J Special Meeting” and “The Keane Special Meeting.”

 

Q:

What is the difference between holding shares as a stockholder of record and as a beneficial owner of shares held in “street name?”

 

A:

If your shares of common stock in C&J or Keane are registered directly in your name with American Stock Transfer & Trust Company, LLC, the transfer agent for each of C&J and Keane, you are considered the stockholder of record with respect to those shares. As the stockholder of record, you have the right to vote, or to grant a proxy directly to C&J or Keane or to a third party to cast your vote, at the respective special meeting.

If your shares of common stock in C&J or Keane are held by a bank, broker or other nominee, you are considered the beneficial owner of shares held in “street name,” and your bank, broker or other nominee is considered the stockholder of record with respect to those shares. Your bank, broker or other nominee will

 

x


Table of Contents

send you, as the beneficial owner, a package describing the procedure for voting your shares. You should follow the instructions provided by them to vote your shares. You are invited to attend your respective special meeting, however, you may not vote these shares in person at the special meeting unless you obtain a signed legal proxy from your bank, broker or other nominee that holds your shares, giving you the right to vote the shares at the special meeting.

 

Q:

If my shares of C&J Common Stock or Keane Common Stock are held in “street name” by my bank, broker or other nominee, will my bank, broker or other nominee automatically vote those shares for me?

 

A:

No. Under the rules of the NYSE, your bank, broker or other nominee will only be permitted to vote your shares of C&J Common Stock or Keane Common Stock, as applicable, if you instruct your bank, broker or other nominee how to vote. You should follow the procedures provided by your bank, broker or other nominee regarding the voting of your shares.

For C&J stockholders, the effect of not instructing your bank, broker or other nominee how you wish to vote your shares will be the same as a vote “against” the C&J Merger Proposal, but will have no effect on the C&J Compensation Proposal or C&J Adjournment Proposal.

For Keane stockholders, the effect of not instructing your bank, broker or other nominee how you wish to vote your shares will have no effect on the Keane Share Issuance Proposal, Keane Compensation Proposal or Keane Adjournment Proposal.

 

Q:

What should I do if I receive more than one set of voting materials for the same special meeting?

 

A:

If you hold shares of C&J Common Stock or Keane Common Stock in “street name” and also directly in your name as a stockholder of record or otherwise, or if you hold shares of C&J Common Stock or Keane Common Stock in more than one brokerage account, you may receive more than one set of voting materials relating to the same special meeting.

Record Holders. For shares held directly, please complete, sign, date and return each proxy card, or, if you are a C&J stockholder, you may cast your vote by telephone or Internet as provided on each proxy card, or otherwise follow the voting instructions provided in this joint proxy statement/prospectus in order to ensure that all of your shares of C&J Common Stock or Keane Common Stock are voted.

“Street nameHolders. For shares held in “street name” through a bank, broker or other nominee, you should follow the procedures provided by your bank, broker or other nominee to vote your shares.

 

Q:

If a stockholder gives a proxy, how are the shares of C&J Common Stock or Keane Common Stock voted?

 

A:

Regardless of the method you choose to vote, the individuals named on the enclosed proxy card will vote your shares of C&J Common Stock or Keane Common Stock in the way that you indicate. When completing the proxy card or, if you are a C&J stockholder, the Internet or telephone processes, you may specify whether your shares of C&J Common Stock or Keane Common Stock should be voted for or against, or abstain from voting on, all, some or none of the specific items of business to come before the respective special meetings.

 

Q:

How will my shares of C&J Common Stock be voted if I return a blank proxy?

 

A:

If you sign, date and return your proxy card and do not indicate how you want your shares of C&J Common Stock to be voted, then your shares of C&J Common Stock will be voted “FOR” the C&J Merger Proposal, “FOR” the C&J Compensation Proposal and “FOR” the C&J Adjournment Proposal.

 

xi


Table of Contents
Q:

How will my shares of Keane Common Stock be voted if I return a blank proxy?

 

A:

If you sign, date and return your proxy card and do not indicate how you want your shares of Keane Common Stock to be voted, then your shares of Keane Common Stock will be voted “FOR” the Keane Share Issuance Proposal, “FOR” the Keane Compensation Proposal and “FOR” the Keane Adjournment Proposal.

 

Q:

Can I change my vote after I have submitted my proxy?

 

A:

Any stockholder giving a proxy has the right to revoke it before the proxy is voted at the applicable special meeting by:

 

   

subsequently submitting a new proxy, whether by submitting a new proxy card or, if you are a C&J stockholder, by submitting a proxy via the Internet or telephone, that is received by the deadline specified on the accompanying proxy card;

 

   

giving written notice of your revocation to C&J’s corporate secretary or Keane’s corporate secretary, as applicable; or

 

   

revoking your proxy and voting in person at the applicable special meeting.

Execution or revocation of a proxy will not in any way affect your right to attend your respective special meeting and vote in person. Written notices of revocation and other communications with respect to the revocation of proxies should be addressed:

 

if you are a C&J stockholder, to:    if you are a Keane stockholder, to:

C&J Energy Services, Inc.

Attn: Corporate Secretary

3990 Rogerdale Rd.

Houston, TX 77042

  

Keane Group, Inc.

Attn: Corporate Secretary

1800 Post Oak Boulevard, Suite 450

Houston, TX 77056

For more information, please see “The C&J Special Meeting—Proxies and Revocation” and “The Keane Special Meeting—Proxies and Revocation,” as applicable.

 

Q:

If I hold my shares in “street name,” can I change my voting instructions after I have submitted voting instructions to my bank, broker or other nominee?

If your shares are held in the name of a bank, broker or other nominee and you previously provided voting instructions to your bank, broker or other nominee, you should follow the instructions provided by your bank, broker or other nominee to revoke or change your voting instructions.

 

Q:

Where can I find the voting results of the special meetings?

 

A:

The preliminary voting results for each special meeting will be announced at that special meeting. In addition, within four business days of each special meeting, each of C&J and Keane intends to file the final voting results of its respective special meeting with the SEC on a Current Report on Form 8-K.

 

Q:

Do C&J stockholders and Keane stockholders have appraisal rights or dissenters’ rights, as applicable?

 

A:

C&J stockholders are not entitled to appraisal or dissenters’ rights in connection with the merger under Section 262 of the DGCL.

Keane stockholders are not entitled to appraisal or dissenters’ rights in connection with the merger under Section 262 of the DGCL.

 

xii


Table of Contents
Q:

Are there any risks that I should consider in deciding whether to vote for the approval of the C&J Merger Proposal or the Keane Share Issuance Proposal?

 

A:

Yes. You should read and carefully consider the risk factors set forth in “Risk Factors.” You also should read and carefully consider the risk factors of C&J and Keane contained in the documents that are incorporated by reference into this joint proxy statement/prospectus.

 

Q:

Do any of the officers or directors of C&J have interests in the merger that may differ from or be in addition to my interests as a C&J stockholder?

 

A:

In considering the recommendation of the C&J Board that C&J stockholders vote to adopt the C&J Merger Proposal and to approve the C&J Compensation Proposal, C&J stockholders should be aware that some of C&J’s directors and executive officers have interests in the merger that may be different from or in addition to the interests of C&J stockholders generally. The C&J Board was aware of and considered these potential interests, among other matters, in evaluating and negotiating the Merger Agreement and the transactions contemplated therein, in approving the merger and in recommending the adoption of the merger and the approval of the C&J Compensation Proposal.

For more information and quantification of these interests, please see “The Merger—Interests of C&J’s Directors and Executive Officers in the Merger.”

 

Q:

Do any of the officers or directors of Keane have interests in the merger that may differ from or be in addition to my interests as a Keane stockholder?

 

A:

In considering the recommendation of the Keane Board that Keane stockholders vote to approve the Keane Share Issuance Proposal, Keane stockholders should be aware that some of Keane’s directors and executive officers have interests in the merger that may be different from or in addition to the interests of Keane stockholders generally. The Keane Board and the Keane Special Committee were aware of and considered these potential interests, among other matters, in evaluating and negotiating the Merger Agreement and the transactions contemplated therein, in approving the merger and in recommending the Keane Share Issuance Proposal.

For more information and quantification of these interests, please see “The Merger—Interests of Keane’s Directors and Executive Officers in the Merger.”

 

Q:

What happens if I sell my shares of C&J Common Stock or Keane Common Stock after the respective record date but before the applicable special meeting?

 

A:

The C&J Record Date is earlier than the date of the C&J Special Meeting, and the Keane Record Date is earlier than the date of the Keane Special Meeting. If you transfer your shares of C&J Common Stock or Keane Common Stock after your respective record date but before the applicable special meeting, you will, unless special arrangements are made, retain your right to vote at the applicable special meeting.

 

Q:

Who will solicit and pay the cost of soliciting proxies?

 

A:

C&J has engaged Innisfree M&A Incorporated (the “C&J Solicitation Agent”) to assist in the solicitation of proxies for the C&J Special Meeting. C&J estimates that it will pay the C&J Solicitation Agent a fee of approximately $20,000, plus reimbursement for certain out-of-pocket fees and expenses. C&J has agreed to indemnify the C&J Solicitation Agent against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions). Keane has engaged MacKenzie Partners, Inc. (the “Keane Solicitation Agent”) to assist in the solicitation of proxies for the Keane Special Meeting. Keane estimates that it will pay the Keane Solicitation Agent a fee of approximately $20,000, plus reimbursement of reasonable expenses. Keane has agreed to indemnify the Keane Solicitation Agent against various liabilities

 

xiii


Table of Contents
  and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions). C&J and Keane also may be required to reimburse banks, brokers and other custodians, nominees and fiduciaries or their respective agents for their expenses in forwarding proxy materials to beneficial owners of C&J Common Stock and Keane Common Stock, respectively. C&J’s directors, officers and employees and Keane’s directors, officers and employees also may solicit proxies by telephone, by electronic means or in person. They will not be paid any additional amounts for soliciting proxies.

 

Q:

What are the material United States federal income tax consequences of the merger to C&J stockholders?

 

A:

The Integrated Mergers are intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986 (as amended, the “Code”) and it is a condition to the respective obligations of C&J and Keane to complete the merger that each of C&J and Keane receives a legal opinion to that effect. If C&J’s outside legal counsel is unable to deliver such opinion to C&J, Keane’s outside legal counsel may provide such opinion to C&J. If Keane’s outside legal counsel is unable to deliver such opinion to Keane, C&J’s outside legal counsel may provide such opinion to Keane. Accordingly, holders of C&J Common Stock are not expected to recognize any gain or loss for U.S. federal income tax purposes on the exchange of shares of C&J Common Stock for shares of Keane Common Stock in the Integrated Mergers, except with respect to any cash received instead of fractional shares of Keane Common Stock. Please see “Material U.S. Federal Income Tax Consequences.”

 

Q:

When is the merger expected to be completed?

 

A:

Subject to the satisfaction or waiver of the closing conditions described under “The Merger Agreement—Conditions to the Completion of the Merger,” including the approval of the C&J Merger Proposal and Keane Share Issuance Proposal, the merger is expected to close in the fourth quarter of 2019. However, neither C&J nor Keane can predict the actual date on which the merger will be completed, or if the merger will be completed at all, because completion of the merger is subject to conditions and factors outside the control of both companies. C&J and Keane hope to complete the merger as soon as reasonably practicable. Please see “The Merger Agreement—Regulatory Approvals.”

 

Q:

What are the conditions to completion of the merger?

 

A:

The merger is subject to a number of conditions to closing as specified in the Merger Agreement. These closing conditions include, among others, the C&J Merger Proposal receiving an affirmative vote from a majority of the outstanding shares of C&J Common Stock entitled to vote thereon (the “C&J Required Vote”), the Keane Share Issuance Proposal receiving an affirmative vote from a majority of votes cast by Keane stockholders entitled to vote thereon and present in person or represented by proxy at the Keane Special Meeting (the “Keane Required Vote”), approval for listing on the NYSE of the shares of Keane Common Stock to be issued pursuant to the Merger Agreement, the expiration or earlier termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (the “HSR Act”), which early termination was received on July 18, 2019, the receipt and continued full force and effectiveness of the Requisite Regulatory Approvals, as defined in “The Merger Agreement—Regulatory Approvals” (including the receipt of approvals under U.S. antitrust and competition laws) and no governmental entity of entity of competent jurisdiction having enacted, issued, promulgated, enforced or entered any law or governmental order (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins, makes illegal or otherwise prohibits the closing of the merger and the other transactions contemplated by the Merger Agreement (such law or governmental order, a “Relevant Legal Restraint”). The obligation of each of C&J and Keane to consummate the merger is also conditioned on, among other things, the receipt by such party of a written opinion from such party’s counsel (or if such party’s counsel is unable to deliver such opinion to such other party, then such other party’s outside legal counsel may provide such opinion) to the effect

 

xiv


Table of Contents
  that for U.S. federal income tax purposes the Integrated Mergers will qualify as a “reorganization” within the meaning of Section 368(a) of the Code, the truth and correctness of the representations and warranties made by the other party on the date of the Merger Agreement and on the closing date (subject to certain materiality qualifiers), and the performance by the other party in all material respects of its obligations under the Merger Agreement. No assurance can be given that the required stockholder, governmental and regulatory consents and approvals will be obtained or that the required conditions to closing will be satisfied, and, even if all required consents and approvals are obtained and the conditions are satisfied, no assurance can be given as to the terms, conditions and timing of such consents and approvals. Any delay in completing the merger could cause the Combined Company not to realize, or to be delayed in realizing, some or all of the benefits that C&J and Keane expect to achieve if the merger is successfully completed within its expected time frame. For a more complete summary of the conditions that must be satisfied or waived prior to completion of the merger, please see “The Merger Agreement—Conditions to the Completion of the Merger.”

 

Q:

If I am a C&J stockholder, how will I receive the merger consideration to which I am entitled?

 

A:

If you hold your shares of C&J Common Stock through The Depository Trust Company (“DTC”), you will not be required to take any specific actions to exchange your shares for shares of Keane Common Stock. After the completion of the merger, shares of C&J Common Stock held through DTC in book-entry form will be automatically exchanged for shares of Keane Common Stock in book-entry form and an exchange agent (the “Exchange Agent”) selected by the parties will deliver to you a check in the amount of any cash to be paid in lieu of any fractional share of Keane Common Stock to which you would otherwise be entitled. If you hold your shares of C&J Common Stock in certificated form, or in book-entry form but not through DTC, after receiving the proper documentation from you, following the effective time, the Exchange Agent will deliver to you the Keane Common Stock and a check in the amount of any cash in lieu of fractional shares to which you would otherwise be entitled. More information may be found in “The Merger Agreement—Exchange of Shares.”

 

Q:

What should I do now?

 

A:

You should read this joint proxy statement/prospectus carefully and in its entirety, including the annexes, and return your completed, signed and dated proxy card(s) by mail in the enclosed postage-paid envelope or, if you are a C&J stockholder, you may submit your voting instructions by telephone or over the Internet as soon as possible so that your shares will be voted in accordance with your instructions.

 

Q:

Whom do I call if I have questions about the C&J Special Meeting, the Keane Special Meeting or the merger?

 

A:

If you have questions about the C&J Special Meeting, the Keane Special Meeting or the merger, or desire additional copies of this joint proxy statement/prospectus or additional proxies, you may contact:

 

For C&J stockholders:    For Keane stockholders:

C&J Energy Services, Inc.

3990 Rogerdale Rd.

Houston, TX 77042

(713) 325-6000

Attention: Corporate Secretary

  

Keane Group, Inc.

1800 Post Oak Boulevard, Suite 450

Houston, TX 77056

(713) 357-9490

Attention: Corporate Secretary

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, NY 10022

Shareholders may call toll free: (888) 750-5834

Banks and Brokers may call collect: (212) 750-5833

  

MacKenzie Partners, Inc.

1407 Broadway

New York, New York 10018

Stockholders, banks and brokers call: (800) 322-2885

 

xv


Table of Contents

SUMMARY

For your convenience, provided below is a brief summary of certain information contained in this joint proxy statement/prospectus. This summary highlights selected information from this joint proxy statement/prospectus and does not contain all of the information that may be important to you as a C&J stockholder or a Keane stockholder. To understand the merger fully and for a more complete description of the terms of the merger, you should read this entire joint proxy statement/prospectus carefully, including its annexes and the other documents to which you are referred. Items in this summary include a page reference directing you to a more complete description of those items. You may obtain the information incorporated by reference into this joint proxy statement/prospectus for free by following the instructions under “Where You Can Find More Information.”

The Parties to the Merger (See page 51)

C&J Energy Services, Inc.

C&J is a leading provider of well construction, intervention, completion, support and other complementary oilfield services and technologies. C&J provides its services to oil and gas exploration and production companies throughout the continental United States. C&J is a new well focused provider offering a diverse suite of services throughout the life cycle of the well, including hydraulic fracturing, cased-hole wireline and pumping, cementing, coiled tubing, rig services, fluids management and other completion and well support services. Shares of C&J Common Stock are traded on the NYSE under the symbol “CJ.” C&J’s principal executive offices are located at 3990 Rogerdale Rd., Houston, TX 77042 and its telephone number is (713) 325-6000.

Keane Group, Inc.

Keane is one of the largest pure-play providers of integrated well completion services in the U.S. with a focus on complex, technically demanding completion solutions. Keane provides its services in conjunction with onshore well development, in addition to stimulation operations on existing wells, to exploration and production customers with some of the highest quality and safety standards in the industry. Shares of Keane Common Stock are traded on the NYSE under the symbol “FRAC.” Keane’s principal executive offices are located at 1800 Post Oak Boulevard, Suite 450, Houston, TX 77056 and its telephone number is (713) 357-9490.

King Merger Sub Corp.

Merger Sub is a wholly owned subsidiary of Keane. Merger Sub was formed by Keane solely in contemplation of the merger, has not conducted any business and has no assets, liabilities or other obligations of any nature other than as set forth in the Merger Agreement. Merger Sub’s principal executive offices are located at 1800 Post Oak Boulevard, Suite 450, Houston, TX 77056 and its telephone number is (713) 357-9490.

The Merger and the Merger Agreement (See pages 71 and 143)

The terms and conditions of the merger are contained in the Merger Agreement, a copy of which is attached as Annex A to this joint proxy statement/prospectus. You are encouraged to read the Merger Agreement carefully and in its entirety, as it is the primary legal document that governs the merger.

Pursuant to the Merger Agreement, Merger Sub will merge with and into C&J. At the effective time, the separate existence of Merger Sub will cease, with C&J as the surviving corporation and wholly owned subsidiary of Keane. Immediately following the effective time, as part of the same transaction, C&J will merge with and into another wholly owned subsidiary of Keane, with such subsidiary continuing as the surviving entity. Following the merger, C&J Common Stock will be delisted from the NYSE, deregistered under the Exchange Act and will cease to be publicly traded.



 

1


Table of Contents

Exchange Ratio

At the effective time, each share of C&J Common Stock (other than C&J Excluded Shares) will be converted into the right to receive 1.6149 shares of Keane Common Stock.

The Exchange Ratio is fixed, which means that it will not change between now and the effective time, regardless of changes in the market price of C&J Common Stock and Keane Common Stock. No fractional shares of Keane Common Stock will be issued upon the conversion of shares of C&J Common Stock pursuant to the Merger Agreement. Each C&J stockholder who otherwise would have been entitled to receive a fraction of a share of Keane Common Stock will be entitled to receive cash in lieu of a fractional share.

Keane stockholders will continue to own their existing shares, which will not be affected by the merger and will constitute shares of the Combined Company following completion of the merger.

C&J Pre-closing Cash Dividend (See page 144)

The C&J Board has declared, subject to the C&J Board making a determination that surplus exists under Delaware law, the Pre-closing Cash Dividend of $1.00 per share of C&J Common Stock. If the C&J Board determines that C&J has sufficient surplus to pay the Pre-closing Cash Dividend, it will be paid prior to the effective time of the merger to the holders of record of C&J Common Stock as of the record date for the Pre-closing Cash Dividend.

The C&J Special Meeting (See page 52)

The C&J Special Meeting will be held at C&J’s headquarters at 3990 Rogerdale Rd., Houston, TX 77042, on October 22, 2019, beginning at 9:30 a.m. Central Time. The C&J Special Meeting is being held to consider and vote on the following proposals:

 

   

Proposal 1—the C&J Merger Proposal: to adopt the Merger Agreement, pursuant to which each outstanding share of C&J Common Stock (other than C&J Excluded Shares) will be cancelled and converted into the right to receive 1.6149 shares of Keane Common Stock;

 

   

Proposal 2—the C&J Compensation Proposal: to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to C&J’s named executive officers in connection with the merger; and

 

   

Proposal 3—the C&J Adjournment Proposal: to approve the adjournment of the C&J Special Meeting to solicit additional proxies if there are not sufficient votes at the time of the C&J Special Meeting to approve the C&J Merger Proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to C&J stockholders.

Completion of the merger is conditioned on the approval of the C&J Merger Proposal by C&J stockholders. Approval of the C&J Compensation Proposal or the C&J Adjournment Proposal are not conditions to the obligation of either C&J or Keane to complete the merger.

Only holders of record of issued and outstanding shares of C&J Common Stock as of the close of business on September 18, 2019, the C&J Record Date, are entitled to notice of, and to vote at, the C&J Special Meeting or any adjournment or postponement of the C&J Special Meeting. C&J stockholders may cast one vote for each share of C&J Common Stock owned as of the C&J Record Date.

Assuming a majority of the total voting power of all outstanding securities of C&J generally entitled to vote at a meeting of stockholders (for purposes of the C&J Special Meeting, a “quorum”) is present at the C&J



 

2


Table of Contents

Special Meeting, the C&J Merger Proposal requires the affirmative vote of a majority of the outstanding shares of C&J Common Stock entitled to vote thereon. Accordingly, a C&J stockholder’s abstention from voting, a broker non-vote or the failure of a C&J stockholder to vote (including the failure of a C&J stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have the same effect as a vote “against” the C&J Merger Proposal.

Assuming a quorum is present at the C&J Special Meeting, approval of the C&J Compensation Proposal requires the affirmative vote of a majority of votes cast by C&J stockholders entitled to vote thereon and present in person or represented by proxy at the C&J Special Meeting. Accordingly, a C&J stockholder’s abstention from voting, a broker non-vote or the failure of a C&J stockholder to vote (including the failure of a C&J stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have no effect on the outcome of the C&J Compensation Proposal.

Whether or not there is a quorum, the approval of the C&J Adjournment Proposal requires the affirmative vote of a majority of votes cast by C&J stockholders entitled to vote thereon and present in person or represented by proxy at the C&J Special Meeting. Accordingly, a C&J stockholder’s abstention from voting, a broker non-vote or the failure of a C&J stockholder to vote (including the failure of a C&J stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have no effect on the outcome of the C&J Adjournment Proposal.

The Keane Special Meeting (See page 62)

The Keane Special Meeting will be held on October 22, 2019, at 9:30 a.m. Central Time, at Keane’s headquarters at 1800 Post Oak Boulevard, Suite 450, Houston, TX 77056. The Keane Special Meeting is being held to consider and vote on the following proposals:

 

   

Proposal 1—the Keane Share Issuance Proposal: to approve the issuance of Keane Common Stock to C&J stockholders in connection with the merger;

 

   

Proposal 2—the Keane Compensation Proposal: to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Keane’s named executive officers in connection with the merger; and

 

   

Proposal 3—the Keane Adjournment Proposal: to approve the adjournment of the Keane Special Meeting to solicit additional proxies if there are not sufficient votes at the time of the Keane Special Meeting to approve the Keane Share Issuance Proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to Keane stockholders.

Completion of the merger is conditioned on the approval of the Keane Share Issuance Proposal by Keane stockholders. Approval of the Keane Compensation Proposal or the Keane Adjournment Proposal are not conditions to the obligation of either C&J or Keane to complete the merger.

Only holders of record of issued and outstanding shares of Keane Common Stock as of the close of business on September 18, 2019, the Keane Record Date, are entitled to notice of, and to vote at, the Keane Special Meeting or any adjournment or postponement of the Keane Special Meeting. Keane stockholders may cast one vote for each share of Keane Common Stock that Keane stockholders owned as of the Keane Record Date.

Assuming a majority in voting power of the shares of Keane Common Stock issued and outstanding and entitled to vote is present (for purposes of the Keane Special Meeting, a “quorum”) approval of each of the



 

3


Table of Contents

Keane Share Issuance Proposal and Keane Compensation Proposal requires the affirmative vote of a majority of votes cast by Keane stockholders entitled to vote thereon and present in person or represented by proxy at the Keane Special Meeting. Accordingly, a Keane stockholder’s abstention from voting, a broker non-vote or the failure of a Keane stockholder to vote (including the failure of a Keane stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have no effect on the outcome of the Keane Share Issuance Proposal or the Keane Compensation Proposal. Pursuant to the Support Agreement, Keane Investor, which owns approximately 49.2% of the outstanding shares of Keane Common Stock, has agreed, among other things, to vote all of its shares of Keane Common Stock in favor of the Keane Share Issuance Proposal and against any proposal made in opposition to the Keane Share Issuance Proposal. Nonetheless, if the Keane Board (acting at the direction of the Keane Special Committee) effects a Change of Recommendation (as defined in “The Merger Agreement—Covenants—No Change of Recommendation”) in connection with a Superior Proposal (as defined in “The Merger Agreement—Covenants—No Solicitation of Acquisition Proposals”), then the foregoing voting requirement under the Support Agreement will be reduced to the lesser of (i) all of the shares of Keane Common Stock of which Keane Investor is the record or beneficial owner or (ii) such portion of the shares of Keane Common Stock equal to 35% of the shares of Keane Common Stock in the aggregate. For a more complete discussion of the Support Agreement, please see “The Merger Agreement—Support Agreement.”

Whether or not there is a quorum, the approval of the Keane Adjournment Proposal requires the affirmative vote of a majority of votes cast by Keane stockholders entitled to vote thereon and present in person or represented by proxy at the Keane Special Meeting. Accordingly, a Keane stockholder’s abstention from voting, a broker non-vote or the failure of a Keane stockholder to vote (including the failure of a Keane stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have no effect on the outcome of the Keane Adjournment Proposal.

Support Agreement (See page 174)

Concurrently with the execution of the Merger Agreement, C&J entered into the Support Agreement with Keane Investor and Cerberus. Keane Investor owns approximately 49.2% of the outstanding shares of Keane Common Stock. The Support Agreement includes covenants to vote such shares (i) in favor of the Keane Share Issuance Proposal and (ii) against (a) any proposal made in opposition to the Keane Share Issuance Proposal, the adoption of the Merger Agreement or that is intended, that could reasonably be expected, or the effect of which could reasonably be expected, to impede, interfere with, delay, postpone, discourage, adversely affect, compete or be inconsistent with the Merger, issuance of Keane Common Stock or any other transaction contemplated by the Merger Agreement, (b) any Acquisition Proposal, as defined in “The Merger Agreement—Covenants—No Solicitation of Acquisition Proposals,” and (c) any action or agreement that would result in a breach of any representation, warranty, covenant or agreement or any other obligation of Keane or Merger Sub under the Merger Agreement or of Keane Investor. However, if the Keane Board (at the recommendation of the Keane Special Committee) effects a Change of Recommendation in connection with a Superior Proposal, the obligation of Keane Investor to vote its shares in the manner set forth above will apply only with respect to the lesser of (i) all of the shares of Keane Common Stock which Keane Investor is the record or beneficial owner or (ii) such portion of Keane Common Stock equal to 35% of the aggregate outstanding shares of Keane Common Stock. The Support Agreement places certain restrictions on the transfer of the shares of Keane Common Stock held by Keane Investor, including, subject to certain exceptions, that for the period commencing at the effective time and continuing for forty-five days thereafter, Keane Investor and Cerberus will not sell, transfer, assign, pledge, encumber or otherwise dispose of, directly or indirectly, their shares of Keane Common Stock or any other securities convertible into or exchangeable for Keane Common Stock. Further, the Support Agreement places restrictions on the ability of Keane Investor and Cerberus to, among other things, acquire, offer to acquire, or agree to acquire, by purchase, or otherwise, beneficial ownership (as defined in Rule 13d-3 of the Exchange Act) of, or rights to acquire, (a) any shares of Keane Common Stock, (b) any option, warrant, convertible security,



 

4


Table of Contents

stock appreciation right or other right to acquire such ownership, including through any swap agreement or other security, contract right or derivative position, whether or not presently exercisable, that is exercisable for, converts into or has a settlement payment or mechanism or is priced by reference to or in relation to the value of Keane or shares of Keane Common Stock or (c) any material assets of Keane (other than as part of an authorized sale process) or any securities or material assets of any subsidiary of Keane; provided, however, that notwithstanding the foregoing, Keane Investor and Cerberus and each of their controlled affiliates may acquire beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of Keane Common Stock provided that such beneficial ownership does not result in ownership of 30% or more of the issued and outstanding shares of Keane Common Stock in the aggregate following such transaction (assuming any stock buy-back transaction announced but not yet consummated by Keane has been consummated as of the time of such acquisition). For a more complete discussion of the Support Agreement, please see “The Merger Agreement—Support Agreement.”

Recommendation of the C&J Board and Reasons for the Merger (See page 85)

The C&J Board unanimously recommends that C&J stockholders vote “FOR” the C&J Merger Proposal, “FOR” the C&J Compensation Proposal and “FOR” the C&J Adjournment Proposal. In reaching its determinations and recommendations, the C&J Board consulted with C&J management and its outside legal and financial advisors, and considered a number of factors that weighed in favor of the merger:

 

   

the strategic logic of the business combination and the expected benefits of the Combined Company to C&J stockholders, including the expectation that the Combined Company would have enhanced scale, value and financial position, be able to generate $100 million of expected annualized run-rate cost synergies; and have greater potential for future earnings growth and operating cash flow generation, creating a more attractive investment opportunity;

 

   

the Exchange Ratio and that the merger consideration will provide C&J stockholders with ownership of approximately 50% of the Combined Company and will therefore allow C&J stockholders to participate in the equity value of the Combined Company, including the expected growth and cost synergies resulting from the merger;

 

   

the structure of the transaction as a merger of equals and the terms of the Merger Agreement providing for equal representation with respect to the governance of the Combined Company;

 

   

certain other factors considered by the C&J Board based on information provided by, and discussed with, C&J management and its outside legal and financial advisors, including historical information concerning C&J’s and Keane’s respective businesses, assets, financial conditions, results of operations, current business strategies and prospects, and the projected long-term financial results of each of C&J and Keane as stand-alone companies, and the expected pro forma effect of the merger on the Combined Company and its ability to achieve future growth and generate additional returns for C&J stockholders; and

 

   

the terms of the Merger Agreement, the merger and the other transactions contemplated by the Merger Agreement, including the ability of C&J stockholders to approve or reject the merger by voting on the adoption of the Merger Agreement, the parties’ representations, warranties and covenants, the conditions to their respective obligations and the termination provisions as well as the likelihood of consummation of the proposed transactions and the evaluation of the C&J Board of the likely time period necessary to complete the merger.

For a more complete description of the factors considered by the C&J Board in reaching this decision, including potentially negative factors against which these advantages and opportunities were weighed, and additional information on the recommendation of the C&J Board, please see “The Merger—Recommendation of the C&J Board and Reasons for the Merger.”



 

5


Table of Contents

Recommendation of the Keane Board and Reasons for the Merger (See page 91)

The Keane Board, upon the unanimous recommendation of the Keane Special Committee solely with respect to the Keane Share Issuance Proposal, unanimously recommends that Keane stockholders vote “FOR” the Keane Share Issuance Proposal, “FOR” the Keane Compensation Proposal and “FOR” the Keane Adjournment Proposal. In reaching its determinations and recommendations, each of the Keane Special Committee and the Keane Board consulted with Keane management and its outside legal and financial advisors, and considered a number of factors, including the following factors that weighed in favor of the merger:

 

   

the benefits of the Combined Company, including the belief of the Keane Special Committee and the Keane Board that the Combined Company would be well positioned to achieve future growth and generate additional returns for Keane stockholders;

 

   

the Exchange Ratio and merger consideration, including the favorability of the Exchange Ratio relative to the intrinsic value of shares of Keane Common Stock over various periods and relative to their current assessment of the valuation of each company and of the cost synergies and other benefits of the merger;

 

   

the structure of the transaction as a merger of equals and the terms of the Merger Agreement providing for the governance of the Combined Company;

 

   

certain other factors considered by the Keane Special Committee and the Keane Board, including the past experience the Keane management team has had in timely and effective corporate integration following significant combinations and acquisition, historical information concerning C&J’s and Keane’s respective businesses, financial condition, results of operations, earnings, trading prices, technology positions, managements, competitive positions and prospects on a stand-alone basis and forecasted combined basis, and the current and prospective business environment in which C&J and Keane operate, including international, national and local economic conditions, the competitive and regulatory environment, and the likely effect of these factors on Keane and the Combined Company; and

 

   

the terms of the Merger Agreement, taken as a whole, including the parties’ representations, warranties and covenants, and the circumstances under which the Merger Agreement may be terminated, in their belief, are reasonable. The Keane Special Committee and the Keane Board also reviewed and considered the conditions to the completion of the merger, and concluded that while the completion of the merger is subject to various regulatory approvals, such approvals were likely to be satisfied on a timely basis.

For a more complete description of the factors considered by the Keane Special Committee and the Keane Board in reaching this decision, including potentially negative factors against which these advantages and opportunities were weighed, and additional information on the recommendation of the Keane Board, please see “The Merger—Recommendation of the Keane Board and Reasons for the Merger.”

Opinion of C&J’s Financial Advisor (See page 97 and Annex B)

On June 16, 2019, at a meeting of the C&J Board, Morgan Stanley & Co. LLC (“Morgan Stanley”), C&J’s financial advisor in connection with the merger, rendered its oral opinion to the C&J Board, subsequently confirmed by delivery of a written opinion, dated June 16, 2019, that, as of that date and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken as set forth in the written opinion, taking into account the payment of the Pre-closing Cash Dividend, the Exchange Ratio pursuant to the Merger Agreement was fair, from a financial point of view to the holders of shares of C&J Common Stock (other than holders of C&J Excluded Shares).



 

6


Table of Contents

The full text of the written opinion of Morgan Stanley to the C&J Board, dated June 16, 2019, is attached as Annex B to this joint proxy statement/prospectus and is incorporated herein by reference in its entirety. The summary of the opinion of Morgan Stanley in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of the written opinion. You should read Morgan Stanley’s written opinion, this section and the summary of Morgan Stanley’s opinion carefully and in their entirety for a discussion of the assumptions made, procedures followed, matters considered and qualifications and limitations upon the review undertaken by Morgan Stanley in rendering its opinion. Morgan Stanley’s opinion was directed to the C&J Board, in its capacity as such, and addressed only the fairness from a financial point of view to the holders of shares of C&J Common Stock (other than holders of C&J Excluded Shares) of the Exchange Ratio pursuant to the Merger Agreement as of the date of such opinion.

Morgan Stanley’s opinion did not address any other aspects or implications of the merger. Morgan Stanley’s opinion did not in any manner address the price at which the shares of the Combined Company Common Stock would trade following the merger or at any time, and Morgan Stanley expressed no opinion or recommendation to any holder of shares of C&J Common Stock or Keane Common Stock as to how such holder should vote at the C&J Special Meeting or Keane Special Meeting or whether to take any other action with respect to the merger. For a further discussion of Morgan Stanley’s opinion, please see “The Merger—Opinion of C&J’s Financial Advisor.”

Opinion of Keane’s Financial Advisor (See page 110 and Annex C)

In connection with the merger, Keane’s financial advisor, Citigroup Global Markets Inc. (“Citi”), delivered a written opinion, dated June 16, 2019, to the Keane Board as to the fairness, from a financial point of view and as of the date of the opinion, to Keane of the Exchange Ratio provided for pursuant to the Merger Agreement.

The full text of Citi’s written opinion, dated June 16, 2019, which describes the assumptions made, including, but not limited to, that the final terms of the Merger Agreement will not vary materially from those set forth in the draft reviewed by Citi and that the Pre-closing Cash Dividend will be paid prior to the consummation of the merger, procedures followed, matters considered and limitations and qualifications on the review undertaken by Citi in rendering its opinion, is attached as Annex C to this joint proxy statement/prospectus and is incorporated into this joint proxy statement/prospectus by reference. The description of Citi’s opinion set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of Citi’s opinion. Citi’s opinion was provided for the information of the Keane Board (in its capacity as such) in connection with its evaluation of the Exchange Ratio from a financial point of view to Keane and did not address any other terms, aspects or implications of the merger. Citi expressed no view as to, and its opinion did not address, the underlying business decision of Keane to effect or enter into the merger, the relative merits of the merger as compared to any alternative business strategies that might exist for Keane or the effect of any other transaction which Keane might engage in or consider. Citi’s opinion is not intended to be and does not constitute a recommendation to any stockholder as to how such stockholder should vote or act on any matters relating to the merger or otherwise. For a further discussion of Citi’s opinion, please see “The Merger—Opinion of Keane’s Financial Advisor.”

Opinion of the Keane Special Committee’s Financial Advisor (See page 118 and Annex D)

The Keane Special Committee engaged Lazard Frères & Co. LLC (“Lazard”) to act as its financial advisor in connection with the transactions contemplated by the Merger Agreement. On June 16, 2019, Lazard rendered its oral opinion, subsequently confirmed in writing by delivery of a written opinion, also dated June 16, 2019, to the Keane Special Committee, that, as of such date, and based upon and subject to the assumptions, including, but not limited to, that C&J will declare the Pre-closing Cash Dividend, with a record date on or after the date of the Merger Agreement and prior to the effective time, procedures, factors, qualifications and limitations set forth therein, the Exchange Ratio provided for in the merger was fair, from a financial point of view, to Keane.



 

7


Table of Contents

The full text of Lazard’s written opinion dated June 16, 2019, which sets forth the assumptions made, procedures followed, factors considered and qualifications and limitations on the scope of review undertaken by Lazard in connection with its opinion, is attached to this joint proxy statement/prospectus as Annex D and is incorporated into this joint proxy statement/prospectus by reference. The description of Lazard’s opinion set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of Lazard’s written opinion attached as Annex D. Keane encourages you to read Lazard’s opinion carefully and in its entirety.

Lazard’s opinion was for the benefit of the Keane Special Committee (in its capacity as such), and Lazard’s opinion was rendered to the Keane Special Committee in connection with its evaluation of the merger. Lazard’s opinion was not intended to and does not constitute a recommendation to any Keane stockholder as to how such stockholder should vote or act with respect to the merger or any matter relating thereto. For a further discussion of Lazard’s opinion, please see “The Merger—Opinion of the Keane Special Committee’s Financial Advisor.”

Board of Directors and Management of the Combined Company (See page 125)

Following the effective time, the Combined Company Board will consist of twelve directors, comprised of:

 

   

the six C&J Designees, which will include the C&J Chairman (who will continue as the chairman of the Combined Company Board); and

 

   

the six Keane Designees, which will include the Keane CEO (who will continue as the CEO of the Combined Company).

The parties intend that the Combined Company Board represent an appropriate mix of relevant experience, qualifications and attributes. At least four of the C&J Designees and at least three of the Keane Designees will meet the independence standards of the NYSE as may be applicable with respect to the Combined Company as of the effective time. The individuals expected to serve on the Combined Company Board following the effective time include, as C&J Designees: Stuart Brightman, John Kennedy, Steven Mueller, Patrick Murray (the C&J Chairman), Amy Nelson and Michael Roemer, and as Keane Designees: Robert W. Drummond (the Keane CEO), Marc G. R. Edwards, Christian A. Garcia, Gary H. Halverson, James C. Stewart and Scott Wille.

Prior to the effective time, Keane will take all actions necessary to cause, effective as of the effective time, (i) Robert Drummond, the Keane CEO, to be appointed to serve as the chief executive officer of the Combined Company, (ii) Jan Kees van Gaalen, the chief financial officer of C&J, to be appointed to serve as the executive vice president and chief financial officer of the Combined Company and (iii) Greg Powell, the chief financial officer of Keane, to be appointed to serve as executive vice president and chief integration officer of the Combined Company. Prior to the effective time, Keane will take all actions necessary to cause, effective as of the effective time, the executive officers (other than the officers specified in the preceding sentence) of the Combined Company to be those individuals selected by the Keane CEO on a merit basis, with input from the chief executive officer of C&J and the chief financial officers of C&J and Keane, and without consideration of whether the persons selected serve as employees of C&J or Keane prior to the effective time.

Interests of C&J’s Directors and Executive Officers in the Merger (See page 126)

In considering the recommendations of the C&J Board, C&J stockholders should be aware that C&J’s directors and executive officers have interests in the merger, including financial interests, which may be different from or in addition to the interests of the other C&J stockholders generally. These interests include:

 

   

the Merger Agreement provides that the directors and officers of C&J and its subsidiaries will have the right to indemnification and continued coverage under directors’ and officers’ liability insurance policies following the merger;



 

8


Table of Contents
   

the Merger Agreement specifies that the merger will be deemed to constitute a “change in control” (or term of similar meaning) at the effective time for purposes of C&J’s and Keane’s benefit plans, policies, programs or agreements (including employment agreements and C&J’s and Keane’s stock plans);

 

   

the Merger Agreement generally provides that C&J’s outstanding long-term incentive equity awards will be converted into like-awards with respect to Keane Common Stock on substantially the same terms and conditions, except that (i) any C&J Performance Share Awards that are unvested as of the effective time will be assumed by Keane and converted into Keane time-based restricted share awards with performance-based vesting conditions deemed achieved at target performance levels and (ii) any C&J Performance Share Awards that are fully vested as of the effective time (after taking into account any acceleration upon consummation of the merger in accordance with the terms and conditions of the applicable award agreement pursuant to which such award was granted) will be settled with Keane Common Stock;

 

   

in connection with the merger, C&J time-based long-term incentive equity and cash awards were modified to provide for accelerated vesting (i) on a termination without “cause” or for “good reason” within twelve months of a “change in control” for non-executives, and (ii) on a termination without “cause” or for “good reason” at any time for executives, in each case, to the extent that such acceleration benefits were not already provided for pursuant to the existing terms and conditions of such awards;

 

   

C&J’s executive officers are entitled to enhanced severance benefits under their respective employment agreements in the event of a qualifying termination of employment with a certain period of time following the effective time, or, with respect to certain executives, prior to the effective time; and

 

   

certain of C&J’s executive officers are eligible to receive a cash-based transaction success incentive bonus in connection with the merger.

The members of the C&J Board were aware of and considered these interests, among other matters, in evaluating and negotiating the Merger Agreement, in approving the Merger Agreement and in determining to recommend that C&J stockholders approve the C&J Merger Proposal.

Treatment of Existing C&J Long-Term Incentive Awards in the Merger (See page 127)

Each C&J Option, whether vested or unvested, that is outstanding immediately prior to the effective time will, at the effective time, be assumed by Keane and remain subject to the same terms and conditions as were applicable to such C&J Option, but will vest and be converted into an option to purchase a number of shares of Keane Common Stock equal to the product of (i) the number of shares of C&J Common Stock subject to the C&J Option immediately prior to the effective time and (ii) the Exchange Ratio (rounded down to the nearest whole share), with a per share exercise price equal to (a) the per share exercise price applicable to such C&J Option immediately prior to the effective time divided by (b) the Exchange Ratio (rounded up to the nearest whole cent).

Each C&J Performance Share Award that is outstanding immediately prior to the effective time other than a Vested C&J Performance Share Award will, at the effective time, be assumed by Keane and remain subject to the same terms and conditions (including the time-based vesting schedule applicable to such award, but excluding any performance-based vesting requirements) as were applicable to such C&J Performance Share Award, but will be converted into an award with respect to a number of shares of Keane Common Stock (rounded up or down to the nearest whole share) equal to the product of (i) the number of shares of C&J Common Stock subject to such C&J Performance Share Award and (ii) the Exchange Ratio. For purposes of the immediately preceding sentence, the number of shares of C&J Common Stock subject to such C&J Performance Share Award will be



 

9


Table of Contents

deemed to be the number of shares subject to the C&J Performance Share Award assuming the applicable performance metrics were achieved at target levels. Vested C&J Performance Share Awards will, at the effective time, be deemed to have been settled with shares of C&J Common Stock, and the holders thereof will receive the merger consideration in the same manner as holders of shares of C&J Common Stock.

Each C&J RSU Award will, at the effective time, be assumed by Keane and remain subject to the same terms and conditions as were applicable to such C&J RSU Award, but will be converted into an award with respect to a number of shares of Keane Common Stock equal to the product of (i) the number of shares of C&J Common Stock subject to the C&J RSU Award immediately prior to the effective time and (ii) the Exchange Ratio.

Each C&J Restricted Stock Award will, at the effective time, be assumed by Keane and remain subject to the same terms and conditions as were applicable to such C&J Restricted Stock Award, but will be converted into an award with respect to a number of shares of Keane Common Stock equal to the product of (i) the number of shares of C&J Common Stock subject to the C&J Restricted Stock Award immediately prior to the effective time and (ii) the Exchange Ratio.

Each C&J Restricted Cash Award, whether vested or unvested, that is outstanding immediately prior to the effective time and not settled as of the closing date will, at the effective time, be assumed by Keane and remain subject to the same terms and conditions as were applicable to such C&J Restricted Cash Award.

Interests of Keane’s Directors and Executive Officers in the Merger (See page 134)

In considering the recommendations of the Keane Board, Keane stockholders should be aware that Keane’s directors and executive officers have interests in the merger, including financial interests, which may be different from, or in addition to, the interests of the other Keane stockholders generally.

These interests include:

 

   

the Merger Agreement reflects the respective decisions of the Keane Board and the C&J Board that the merger will be deemed to constitute a “change in control” or “change of control” at the effective time for purposes of C&J’s and Keane’s benefit plans, policies, programs or agreements (including employment agreements and C&J’s and Keane’s stock plans);

 

   

certain of Keane’s executive officers will receive accelerated vesting of Keane PSU Awards upon the consummation of the merger;

 

   

Keane’s executive officers may be entitled to severance benefits under their respective employment and equity award arrangements in the event of a qualifying termination of employment following the effective time; and

 

   

certain of Keane’s executive officers may be eligible to receive a cash-based retention or performance award in connection with the merger.

The members of the Keane Board were aware of and considered these interests, among other matters, in evaluating and negotiating the Merger Agreement, in approving the Merger Agreement and in determining to recommend that Keane stockholders approve the Keane Share Issuance Proposal. Other interests are described in more detail in “The Merger—Interests of Keane’s Directors and Executive Officers in the Merger.”

Treatment of Existing Keane Equity Awards in the Merger (See page 135)

Keane Options, Keane RSU Awards and Keane Restricted Stock Awards that are outstanding immediately before the effective time of the merger will continue to be awards in respect of Keane Common Stock following



 

10


Table of Contents

the merger and subject to the same terms and conditions that were applicable to such awards before the effective time. Outstanding Keane PSU Awards held by certain of Keane’s executive officers will be amended to provide that, upon the consummation of the merger, the respective executive officer will become fully vested in his Keane PSU Award at the target level of achievement. The Merger Agreement reflects the respective decisions of the Keane Board and the C&J Board that the merger will be deemed to constitute a “change in control” or “change of control” at the effective time for purposes of C&J’s and Keane’s benefit plans, policies, programs or agreements (including employment agreements and C&J’s and Keane’s stock plans).

Certain Beneficial Owners of C&J Common Stock (See page 212)

At the close of business on August 29, 2019, the latest practicable date prior to the date of this joint proxy statement/prospectus, C&J’s directors and executive officers and their affiliates, as a group, beneficially owned and were entitled to vote approximately 823,518 shares of C&J Common Stock, collectively representing 1.25% of the shares of C&J Common Stock outstanding on August 29, 2019. Although none of them has entered into any agreement obligating them to do so, C&J currently expects that all of its directors and executive officers will vote their shares “FOR” the C&J Merger Proposal, “FOR” the C&J Compensation Proposal and “FOR” the C&J Adjournment Proposal. For more information regarding the security ownership of C&J directors and executive officers, please see “Certain Beneficial Owners of C&J Common Stock.”

Certain Beneficial Owners of Keane Common Stock (See page 214)

At the close of business on August 29, 2019, the latest practicable date prior to the date of this joint proxy statement/prospectus, Keane’s directors and executive officers, as a group, beneficially owned and were entitled to vote approximately 683,949 shares of Keane Common Stock, collectively representing 0.65% of the shares of Keane Common Stock outstanding on August 29, 2019. Keane currently expects that all of its directors and executive officers will vote their shares “FOR” the Keane Share Issuance Proposal, “FOR” the Keane Compensation Proposal and “FOR” the Keane Adjournment Proposal. For more information regarding the security ownership of Keane directors and executive officers, please see “Certain Beneficial Owners of Keane Common Stock.” Pursuant to the Support Agreement, Keane Investor, which owns approximately 49.2% of the outstanding shares of Keane Common Stock, has agreed, among other things, to vote all of its shares of Keane Common Stock in favor of the Keane Share Issuance Proposal and against any proposal made in opposition to the Keane Share Issuance Proposal. Nonetheless, if the Keane Board (acting at the direction of the Keane Special Committee) effects a Change of Recommendation in connection with a Superior Proposal, then the foregoing voting requirement under the Support Agreement will be reduced to the lesser of (i) all of the shares of Keane Common Stock of which Keane Investor is the record or beneficial owner or (ii) such portion of the shares of Keane Common Stock equal to 35% of the shares of Keane Common Stock in the aggregate. For a more complete discussion of the Support Agreement, please see “The Merger Agreement—Support Agreement.”

Ownership of the Combined Company after the Merger

As of the date of this joint proxy statement/prospectus, based on the Exchange Ratio, the shares outstanding of C&J Common Stock (plus outstanding C&J RSU Awards, outstanding C&J Performance Share Awards, and outstanding C&J Restricted Stock Awards) and the shares outstanding of Keane Common Stock (plus outstanding Keane RSU Awards, outstanding Keane PSU Awards and outstanding Keane Restricted Stock Awards), C&J and Keane estimate that holders of C&J Common Stock as of immediately prior to the effective time will hold, in the aggregate, approximately 50% of the issued and outstanding shares of Combined Company Common Stock (based on fully diluted shares outstanding of the Combined Company) immediately following the effective time, and holders of shares of Keane Common Stock as of immediately prior to the effective time will hold, in the aggregate, approximately 50% of the issued and outstanding shares of Combined Company Common Stock (based on fully diluted shares outstanding of the Combined Company) immediately following the effective time.



 

11


Table of Contents

Conditions to the Completion of the Merger (See page 167)

Each party’s obligation to effect the merger is subject to the satisfaction at closing or waiver at or prior to closing of each of the following conditions:

 

   

receipt of the C&J Required Vote and the Keane Required Vote;

 

   

the shares of Keane Common Stock issuable in accordance with the Merger Agreement being approved for listing on the NYSE;

 

   

expiration or earlier termination of waiting periods under the HSR Act, which early termination was received on July 18, 2019, the receipt of all Requisite Regulatory Approvals, and the continued full force and effectiveness of the Requisite Regulatory Approvals;

 

   

no governmental entity of competent jurisdiction having enacted, issued, promulgated, enforced or entered any law or governmental order in connection with a Requisite Regulatory Approval that remains in effect that would require either C&J or Keane or any of their subsidiaries to take or commit to take any actions constituting or that would reasonably be expected to have a Burdensome Effect, as defined in “The Merger Agreement—Covenants—Cooperation; Efforts to Consummate,” or would otherwise constitute or reasonably be expected to have a Burdensome Effect;

 

   

this joint proxy statement/prospectus becomes effective, no stop order suspending the effectiveness of this joint proxy statement/prospectus is issued and remains in effect, and no proceedings for that purpose have commenced or are threatened in writing by the SEC; and

 

   

no governmental entity of competent jurisdiction having enacted, issued, promulgated, enforced or entered any Relevant Legal Restraint.

The obligations of C&J to effect the merger is subject to the satisfaction at closing or waiver at or prior to closing of each of the following conditions:

 

   

the accuracy of the representations and warranties of Keane as follows:

 

   

the representations and warranties of Keane regarding organization, good standing and qualification, corporate authority and approval, takeover statutes, and Keane’s brokers and finders must have been true and correct in all material respects as of the date of the Merger Agreement and must be true and correct in all material respects as of the effective time (except to the extent that any such representation and warranty expressly speaks as of a particular date or period of time, in which case such representation and warranty must be so true and correct in all material respects as of such particular date or period of time);

 

   

the representations and warranties of Keane regarding the absence of certain changes or events that has had or would, individually or in the aggregate, reasonably be excepted to have a materially adverse effect on Keane, must have been true and correct in all respects as of the date of the Merger Agreement and must be true and correct in all respects as of the effective time;

 

   

the representation of Keane regarding its capital structure must have been true and correct in all respects as of the date of the Merger Agreement and must be true and correct in all respects as of the effective time, other than, in each case, de minimis inaccuracies; and

 

   

each other representation and warranty of Keane and Merger Sub set forth in the Merger Agreement must be true and correct in all respects (without giving effect to any qualification by materiality or material adverse effect contained therein) as of the date of the Merger Agreement and as of the effective time (except to the extent that any such representation and warranty expressly speaks as of a particular date or period of time, in which case such representation and warranty must be so true and correct in all respects as of such particular date or period of time),



 

12


Table of Contents
 

except for any failure of any such representation and warranty to be so true and correct in all respects (without giving effect to any qualification by materiality or material adverse effect contained therein) that would not, individually or in the aggregate, reasonably be expected to have a material adverse effect with respect to Keane;

 

   

Keane’s and Merger Sub’s performance of, in all material respects, their obligations under the Merger Agreement required to be performed at or prior to the effective time;

 

   

the receipt by C&J of a certificate of the chief executive officer or chief financial officer of Keane certifying that the conditions in the immediately preceding bullets with respect to representations and warranties and performance of obligations have been satisfied;

 

   

Keane having taken the actions necessary regarding governance of Keane as provided in the Merger Agreement effective as of the effective time; and

 

   

the receipt by C&J of a written opinion from C&J’s outside legal counsel (or if C&J’s outside legal counsel is unable to deliver such opinion, Keane’s outside legal counsel), dated as of the effective time, to the effect that the Integrated Mergers will qualify as a “reorganization” within the meaning of Section 368(a) of the Code.

Keane’s obligation to effect the merger is subject to the satisfaction at closing or waiver at or prior to closing of each of the following conditions:

 

   

the accuracy of the representations and warranties of C&J as follows:

 

   

the representations and warranties of C&J regarding organization, good standing and qualification, corporate authority and approval, takeover statutes, and C&J’s brokers and finders must have been true and correct in all material respects as of the date of the Merger Agreement and must be true and correct in all material respects as of the effective time (except to the extent that any such representation and warranty expressly speaks as of a particular date or period of time, in which case such representation and warranty must be so true and correct in all material respects as of such particular date or period of time);

 

   

the representations and warranties of C&J regarding the absence of certain changes or events that has had or would, individually or in the aggregate, reasonably be excepted to have a materially adverse effect on C&J, must have been true and correct in all respects as of the date of the Merger Agreement and must be true and correct in all respects as of the effective time;

 

   

the representation of C&J regarding its capital structure must have been true and correct in all respects as of the date of the Merger Agreement and must be true and correct in all respects as of the effective time, other than, in each case, de minimis inaccuracies; and

 

   

each other representation and warranty of C&J set forth in the Merger Agreement must be true and correct in all respects (without giving effect to any qualification by materiality or material adverse effect contained therein) as of the date of the Merger Agreement and as of the effective time (except to the extent that any such representation and warranty expressly speaks as of a particular date or period of time, in which case such representation and warranty must be so true and correct in all respects as of such particular date or period of time), except for any failure of any such representation and warranty to be so true and correct in all respects (without giving effect to any qualification by materiality or material adverse effect contained therein) that would not, individually or in the aggregate, reasonably be expected to have a material adverse effect with respect to C&J;

 

   

C&J’s performance of, in all material respects, its obligations under the Merger Agreement required to be performed at or prior to the effective time;



 

13


Table of Contents
   

the receipt by Keane of a certificate of the chief executive officer or chief financial officer of C&J certifying that the conditions in the immediately preceding bullets with respect to representations and warranties and performance of obligations have been satisfied; and

 

   

the receipt by Keane of a written opinion from Keane’s outside legal counsel (or if Keane’s outside legal counsel is unable to deliver such opinion, C&J’s outside legal counsel), dated as of the effective time, to the effect that the Integrated Mergers, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code.

No Solicitation of Acquisition Proposals (See page 154)

Each of C&J and Keane has agreed that neither it nor any of its subsidiaries will, and that it will cause its and its subsidiaries’ directors, officers and employees not to, and not permit its investment bankers, attorneys, accountants and other advisors or representatives to (such directors, officers, employees, investment bankers, attorneys, accountants and other advisors or representatives, collectively the “Representatives”) directly or indirectly:

 

   

initiate, solicit, propose, knowingly encourage (including by way of furnishing information) or knowingly take any action designed to facilitate any inquiry regarding, or the making of any inquiry, proposal or offer that constitutes or would reasonably be expected to lead to, an Acquisition Proposal;

 

   

engage in, continue or otherwise participate in any discussions with or negotiations relating to, or otherwise cooperate in any way with, any Acquisition Proposal or any inquiry, proposal or offer that would reasonably be expected to lead to an Acquisition Proposal (other than to state that the terms of the Merger Agreement prohibit such discussions or negotiations);

 

   

provide any nonpublic information to any person in connection with any Acquisition Proposal or any inquiry, proposal or offer that constitutes or would reasonably be expected to lead to an Acquisition Proposal;

 

   

otherwise knowingly facilitate any effort or attempt to make an Acquisition Proposal or any inquiry, proposal or offer that constitutes or would reasonably be expected to lead to an Acquisition Proposal;

 

   

waive or release any person from, forebear in the enforcement of, or amend any standstill agreement or any standstill provisions of any other contract, provided that if C&J, acting at the direction of the C&J Board, or Keane, acting at the direction of the Keane Special Committee, as applicable, determines in good faith after consultation with such party’s legal counsel that the failure to waive a particular standstill provision would be a breach of such party’s fiduciary duties under applicable law, then such party may waive such standstill provision, solely to the extent necessary to permit a third party to make and pursue an Acquisition Proposal; or

 

   

resolve, agree or publicly propose to, or permit the relevant party, any of its subsidiaries or any of its or their Representatives to agree or publicly propose to take any of the actions referred to above.

Notwithstanding the restrictions described above, prior to, but not after, the time the C&J Required Vote or the Keane Required Vote is obtained, in response to an unsolicited, bona fide written Acquisition Proposal received after the date of the Merger Agreement that did not arise from or in connection with a breach of the above obligations, C&J (acting at the direction of the C&J Board) or Keane (acting at the direction of the Keane Special Committee), as applicable, may:

 

   

provide information in response to a request therefor (including nonpublic information regarding it or any of its subsidiaries) to the person who made such Acquisition Proposal only if such information has previously been made available to, or is made available to the other party prior to or substantially concurrently with the time such information is made available to the person who made such Acquisition



 

14


Table of Contents
 

Proposal and, prior to furnishing any such information, such party receives from the person making such Acquisition Proposal an executed confidentiality agreement containing terms that are generally not less restrictive to the person who made such Acquisition Proposal than the terms in a confidentiality agreement with C&J or Keane, as applicable (provided that such confidentiality agreement need not include any “standstill” terms), and which confidentiality agreement does not prohibit compliance by either of C&J or Keane, as applicable, with this bullet point; and

 

   

participate in any discussions or negotiations with any such person regarding such Acquisition Proposal,

in each case if, and only if, prior to taking any such action, the C&J Board or the Keane Special Committee, as applicable, determines in good faith after consultation with its outside legal counsel that based on the information then available and after consultation with its financial advisor (i) such Acquisition Proposal either constitutes a Superior Proposal, as defined in “The Merger Agreement—Covenants—No Solicitation of Acquisition Proposals,” or could reasonably be expected to result in a Superior Proposal and (ii) failure to engage in such activities would reasonably be expected to be inconsistent with its directors’ fiduciary duties under applicable law.

No Change of Recommendation (See page 156)

Subject to certain exceptions described below, neither the C&J Board, including any committee thereof, nor the Keane Board (acting at the direction of the Keane Special Committee), may make a Change of Recommendation, or cause or permit C&J or Keane, as applicable, to enter into an Alternative Acquisition Agreement, as defined in “The Merger Agreement—Covenants—No Change of Recommendation.”

Permitted Change of Recommendation—Superior Proposal

Prior to, but not after, the time the C&J Required Vote or the Keane Required Vote is obtained, as applicable, the C&J Board or the Keane Board (acting at the direction of the Keane Special Committee) may effect a Change of Recommendation if an unsolicited, bona fide written Acquisition Proposal received after the date of the Merger Agreement that did not arise from or in connection with a breach of the obligations set forth in the Merger Agreement is received by a party and is not withdrawn, and the C&J Board or the Keane Special Committee, as applicable, determines in good faith, after consultation with its outside legal counsel and its financial advisor that (i) such Acquisition Proposal constitutes a Superior Proposal and (ii) failure to consider such Acquisition Proposal would reasonably be expected to be inconsistent with the relevant directors’ fiduciary duties under applicable law, and meets certain other conditions as described in “The Merger Agreement—Covenants—No Change of Recommendation” and “The Merger Agreement—Covenants—Permitted Change of Recommendation—Superior Proposal.”

Permitted Change of Recommendation—Intervening Event

Prior to, but not after, the time the C&J Required Vote or the Keane Required Vote is obtained, as applicable, the C&J Board or the Keane Board (acting at the direction of the Keane Special Committee) as applicable, may effect a Change of Recommendation if an Intervening Event, as defined in “The Merger Agreement—Covenants—Permitted Change of Recommendation—Intervening Event,” has occurred, and prior to taking such action, the C&J Board or the Keane Board (acting at the direction of the Keane Special Committee) determines in good faith, after consultation with its outside legal counsel and its financial advisor, that failure to take such action in response to such Intervening Event would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable law, and meets certain other conditions as described in “The Merger Agreement—Covenants—No Change of Recommendation” and “The Merger Agreement—Covenants—Permitted Change of Recommendation—Intervening Event.”



 

15


Table of Contents

C&J Special Meeting (See page 159)

In accordance with applicable law and its organizational documents, C&J must take all action necessary to convene the C&J Special Meeting as promptly as practicable after this joint proxy statement/prospectus is declared effective, to consider and vote upon the approval of the C&J Merger Proposal and must not postpone or adjourn such meeting except to the extent required by law, in accordance with the terms of the Merger Agreement, or, if there are insufficient shares of C&J Common Stock represented (either in person or by proxy) to constitute a quorum at the originally scheduled C&J Special Meeting. Subject to the right of the C&J Board to effect a Change of Recommendation in accordance with the terms of the Merger Agreement, C&J must use reasonable best efforts to solicit from its stockholders proxies in favor of the C&J Merger Proposal.

Unless the Merger Agreement has been terminated in accordance with its terms, as described in “The Merger Agreement—Termination of the Merger Agreement,” the obligation of C&J to call, give notice of, convene and hold the C&J Special Meeting to consider and vote upon the adoption of the Merger Agreement will not be limited or otherwise affected by the making, commencement, disclosure, announcement or submission of any Acquisition Proposal or Superior Proposal, or by any Change of Recommendation.

Keane Special Meeting (See page 160)

In accordance with applicable law and its organizational documents, Keane must take all action necessary to convene the Keane Special Meeting as promptly as practicable after this joint proxy statement/prospectus is declared effective, to consider and vote upon the approval of the Keane Share Issuance Proposal and must not postpone or adjourn such meeting except to the extent required by law, in accordance with the terms of the Merger Agreement, or, if there are insufficient shares of Keane Common Stock represented (either in person or by proxy) to constitute a quorum at the originally scheduled Keane Special Meeting. Subject to the right of the Keane Board (acting at the direction of the Keane Special Committee) to effect a Change of Recommendation in accordance with the terms of the Merger Agreement, Keane must use reasonable best efforts to solicit from its stockholders proxies in favor of the Keane Share Issuance Proposal.

Unless the Merger Agreement has been terminated in accordance with its terms, as described in “The Merger Agreement—Termination of the Merger Agreement,” the obligation of Keane to call, give notice of, convene and hold the Keane Special Meeting to consider and vote upon the approval of the issuance of Keane Common Stock to C&J stockholders pursuant to the Merger Agreement will not be limited or otherwise affected by the making, commencement, disclosure, announcement or submission of any Acquisition Proposal or Superior Proposal, or by any Change of Recommendation.

Termination of the Merger Agreement (See page 169)

Termination by Mutual Consent

The Merger Agreement may be terminated and the merger and the other transactions contemplated by the Merger Agreement may be abandoned at any time prior to the effective time by mutual written consent of C&J (acting at the direction of the C&J Board) and Keane (by action of the Keane Board (acting at the direction of the Keane Special Committee)).

Termination by Either C&J or Keane

Either C&J or Keane may terminate the Merger Agreement and the merger may be abandoned at any time prior to the effective time by action of the C&J Board or the Keane Board (acting at the direction of the Keane Special Committee), as applicable, if:

 

   

there is an Outside Date termination event;



 

16


Table of Contents
   

there is a regulatory restraint termination event; or

 

   

the C&J Required Vote or Keane Required Vote, as applicable, has not been obtained,

in each case, as such terms are defined in “The Merger Agreement—Termination of the Merger Agreement—Termination by Either C&J or Keane.”

Termination by C&J

C&J (acting at the direction of the C&J Board) may terminate the Merger Agreement and the merger may be abandoned at any time prior to the effective time:

 

   

prior to the time the Keane Required Vote is obtained, if the Keane Board has made a Change of Recommendation; or

 

   

if at any time prior to the effective time, there has been a breach by Keane of any of its representations, warranties, covenants or agreements set forth in the Merger Agreement such that the conditions relating to accuracy of representations and warranties and performance of covenants would not be satisfied (and such breach is not curable prior to the Outside Date, or if curable prior to the Outside Date, has not been cured within the earlier of (i) 30 days after the giving of notice thereof by C&J to Keane or (ii) three business days prior to the Outside Date) (each such event, a “Keane Terminable Breach”); except that this right to terminate the Merger Agreement is not available if C&J has breached in any material respect any of its representations, warranties, covenants or agreements set forth in the Merger Agreement in any manner that has been the primary cause of, or primarily resulted in, the occurrence of the failure of a condition to the consummation of the merger to be satisfied.

Termination by Keane

Keane may terminate the Merger Agreement and the merger may be abandoned at any time prior to the effective time (by action of the Keane Board (acting at the direction of the Keane Special Committee)):

 

   

prior to the time the C&J Required Vote is obtained, if the C&J Board has made a Change of Recommendation; or

 

   

if at any time prior to the effective time, there has been a breach by C&J of any of its representations, warranties, covenants or agreements set forth in the Merger Agreement such that the conditions relating to accuracy of representations and warranties and performance of covenants would not be satisfied (and such breach is not curable prior to the Outside Date, or if curable prior to the Outside Date, has not been cured within the earlier of (i) 30 days after the giving of notice thereof by Keane to C&J or (ii) three business days prior to the Outside Date) (each such event, a “C&J Terminable Breach”); except that this right to terminate the Merger Agreement is not available if Keane has breached in any material respect any of its representations, warranties, covenants or agreements set forth in the Merger Agreement in any manner that has been the primary cause of, or primarily resulted in, the occurrence of the failure of a condition to the consummation of the merger to be satisfied.

Termination Fees (See page 171)

C&J will be required to pay to Keane a termination fee of $30 million if the Merger Agreement is terminated:

 

   

by either party pursuant to an Outside Date termination or a C&J no vote termination (as defined in “The Merger Agreement—Termination of the Merger Agreement—Termination by Either C&J or Keane”), or by Keane pursuant to a C&J Terminable Breach, and, in either case:

 

   

a bona fide Acquisition Proposal with respect to C&J has been publicly made directly to C&J stockholders or otherwise has become publicly known or any person has publicly announced an



 

17


Table of Contents
 

intention (whether or not conditional) to make an Acquisition Proposal with respect to C&J (and such Acquisition Proposal or publicly announced intention has not been publicly withdrawn without qualification five business days prior to (i) the date of such termination, (ii) with respect to an Outside Date termination or the date of such termination, with respect to a C&J Terminable Breach or (iii) the date of the C&J Special Meeting, with respect to a C&J no vote termination); and

 

   

within 12 months after such termination, (i) C&J or any of its subsidiaries has entered into an Alternative Acquisition Agreement with respect to any Acquisition Proposal with respect to C&J or (ii) there has been consummated any Acquisition Proposal with respect to C&J (in each case of clauses (i) and (ii), with 50% being substituted in lieu of 20% in each instance thereof in the definition of “Acquisition Proposal”);

 

   

by Keane pursuant to a Change of Recommendation by C&J; or

 

   

by either C&J or Keane pursuant to a C&J no vote termination (and, at the time of such termination, Keane had the right to terminate the Merger Agreement as a result of a Change of Recommendation by C&J).

Keane will be required to pay to C&J a termination fee of $30 million if the Merger Agreement is terminated:

 

   

by either party pursuant to an Outside Date termination or a Keane no vote termination (as defined in “The Merger Agreement—Termination of the Merger Agreement—Termination by Either C&J or Keane”), or by C&J pursuant to a Keane Terminable Breach, and, in either case:

 

   

a bona fide Acquisition Proposal with respect to Keane has been publicly made directly to Keane stockholders or otherwise has become publicly known or any person has publicly announced an intention (whether or not conditional) to make an Acquisition Proposal with respect to Keane (and such Acquisition Proposal or publicly announced intention has not been publicly withdrawn without qualification five business days prior to (i) the date of such termination, (ii) with respect to an Outside Date termination or the date of such termination, with respect to a Keane Terminable Breach or (iii) the date of the Keane Special Meeting, with respect to a Keane no vote termination); and

 

   

within 12 months after such termination, (i) Keane or any of its subsidiaries has entered into an Alternative Acquisition Agreement with respect to any Acquisition Proposal with respect to Keane or (ii) there has been consummated any Acquisition Proposal with respect to Keane (in each case of clauses (i) and (ii), with 50% being substituted in lieu of 20% in each instance thereof in the definition of “Acquisition Proposal”);

 

   

by C&J pursuant to a Change of Recommendation by Keane; or

 

   

by either C&J or Keane pursuant to a Keane no vote termination (and, at the time of such termination, C&J had the right to terminate the Merger Agreement as a result of a Change of Recommendation by Keane).

Expense Reimbursement (See page 172)

If the Merger Agreement is terminated by (i) either C&J or Keane pursuant to a C&J no vote termination, then promptly, but in no event later than, in the case of such termination by Keane, three business days or, in the case of such termination by C&J, one business day after the date of such termination, or (ii) Keane pursuant to a C&J Terminable Breach, then promptly, but in no event later than three business days, C&J will pay all of the documented out-of-pocket costs, fees and expenses of counsel, accountants, financial advisors and other experts



 

18


Table of Contents

and advisors as well as fees and expenses incident to negotiation, preparation and execution of the Merger Agreement and related documentation and stockholders’ meetings and consents of Keane up to a maximum amount equal to $7.5 million, to Keane or its designee by wire transfer of immediately available cash funds; provided that any such amounts paid will be credited (without interest) against any termination fee paid by C&J to Keane (or its designee) pursuant to the terms of the Merger Agreement.

If the Merger Agreement is terminated by (i) either C&J or Keane pursuant to a Keane no vote termination, then promptly, but in no event later than, in the case of such termination by C&J, three business days or, in the case of such termination by Keane, one business day after the date of such termination, or (ii) C&J pursuant to a Keane Terminable Breach, then promptly, but in no event later than three business days, Keane will pay all of the documented out-of-pocket costs, fees and expenses of counsel, accountants, financial advisors and other experts and advisors as well as fees and expenses incident to negotiation, preparation and execution of the Merger Agreement and related documentation and stockholders’ meetings and consents of C&J up to a maximum amount equal to $7.5 million, to C&J or its designee by wire transfer of immediately available cash funds; provided that any such amounts paid will be credited (without interest) against any termination fee paid by Keane to C&J (or its designee) pursuant to the terms of the Merger Agreement.

Stockholders’ Agreement (See page 175)

At the closing of the merger, the Combined Company will enter into a second amended and restated stockholders’ agreement with Keane Investor (the “Stockholders’ Agreement”). Pursuant to the Stockholders’ Agreement, effective as of the effective time, Keane Investor (or Cerberus, if Cerberus no longer holds its Combined Company Common Stock through Keane Investor) will have the right to designate (i) two individuals to the Combined Company Board for as long as Keane Investor or Cerberus, as applicable, has beneficial ownership of at least 12.5% of the outstanding Combined Company Common Stock and (ii) one individual to the Combined Company Board for as long as Keane Investor or Cerberus, as applicable, has beneficial ownership of less than 12.5% but at least 7.5% of the outstanding Combined Company Common Stock. Pursuant to the Stockholders’ Agreement, Keane Investor or Cerberus, as applicable, has customary replacement rights for such designees.

Pursuant to the Stockholders’ Agreement, Keane Investor may make up to four demands for the Combined Company to register under the Securities Act all of the registrable securities not then covered by an existing and effective registration statement of the Combined Company by delivering to the Combined Company a written notice of each such demand.

Pursuant to the Stockholders’ Agreement, subject to certain limitations, if the Combined Company proposes to register any shares of common stock under the Securities Act (other than (i) pursuant to a registration statement requested in connection with the exercise of any demand registration rights described in preceding paragraph, (ii) on Form S-4 or Form S-8 (or a similar or successor form) or (iii) with respect to certain other specified offerings) with respect to an offering of shares of Combined Company Common Stock for its own account or for the account of any of its stockholders, it must, as soon as practicable, give written notice to Keane Investor of its intention to do so (but in no event less than ten days prior to the proposed filing date) and offer Keane Investor the opportunity to register under such registration all registrable securities with respect to which the Combined Company has received written requests for inclusion therein. For a more complete discussion of the Stockholders’ Agreement, please see “The Merger Agreement—Stockholders’ Agreement.”

Accounting Treatment (See page 145)

C&J and Keane prepare their respective financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). Although the parties have structured the merger as a



 

19


Table of Contents

merger of equals, GAAP requires that one party to the merger be identified as the acquirer. The merger will be accounted for using the acquisition method of accounting, with Keane being treated as the accounting acquirer. In identifying Keane as the acquiring entity for accounting purposes, C&J and Keane took into account a number of factors as of the date of this joint proxy statement/prospectus, including which entity is issuing its equity interests, the existence of a large minority interest, the intended corporate governance structure of the Combined Company, the intended senior management of the Combined Company, and the terms of the share exchange. No single factor was the sole determinant in the overall conclusion that Keane is the acquirer for accounting purposes; rather, all factors were considered in arriving at such conclusion.

Material U.S. Federal Income Tax Consequences (See page 185)

The Integrated Mergers are intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and it is a condition to the respective obligations of C&J and Keane to complete the Integrated Mergers that each of C&J and Keane receives a legal opinion to that effect. If C&J’s outside legal counsel is unable to deliver such opinion to C&J, Keane’s outside legal counsel may provide such opinion to C&J. If Keane’s outside legal counsel is unable to deliver such opinion to Keane, C&J’s outside legal counsel may provide such opinion to Keane. Accordingly, holders of C&J Common Stock are not expected to recognize any gain or loss for U.S. federal income tax purposes on the exchange of shares of C&J Common Stock for shares of Keane Common Stock in the Integrated Mergers, except with respect to any cash received in lieu of fractional shares.

Comparison of Stockholders’ Rights (See page 190)

Upon completion of the merger, C&J stockholders receiving shares of Keane Common Stock will become stockholders of the Combined Company, and their rights will be governed by Delaware law and the governing corporate documents of the Combined Company in effect at the effective time. C&J stockholders will have different rights once they become stockholders of the Combined Company due to differences between the governing corporate documents of C&J and the Combined Company, as further described in “Comparison of Stockholders’ Rights.”

Listing of Keane Common Stock; Delisting and Deregistration of C&J Common Stock and Warrants (See page 164)

Prior to the effective time, Keane will use its reasonable best efforts to cause the shares of Keane Common Stock to be issued in the merger to be approved for listing on the NYSE, subject to official notice of issuance. If the merger is completed, C&J Common Stock will be delisted from the NYSE and deregistered under the Exchange Act and C&J will no longer be required to file periodic reports with the SEC with respect to C&J Common Stock.

C&J has agreed to cooperate with Keane and use its reasonable best efforts to take, or cause to be taken, all actions, and do or cause to be done all things, reasonably necessary, proper or advisable on its part under applicable laws and rules and policies of the NYSE to enable the delisting of the shares of C&J Common Stock from the NYSE and the deregistration of the shares of C&J Common Stock under the Exchange Act as promptly as practicable after the effective time.

The outstanding warrants to purchase shares of C&J Common Stock issued pursuant to that certain warrant agreement, dated as of January 6, 2017 (the “Warrant Agreement”), will be deemed exercised on the last trading day prior to the closing date in accordance with the terms and conditions thereof. No warrants to purchase shares of C&J Common Stock will be outstanding at the effective time, such warrants to be deregistered under the Exchange Act.



 

20


Table of Contents

Regulatory Approvals (See page 172)

C&J and Keane are required to cooperate with each other and use, and to cause their respective subsidiaries to use, their respective reasonable best efforts to take or cause to be taken all actions, and do or cause to be done all things reasonably necessary, proper or advisable on its part under the Merger Agreement and applicable law to cause the conditions to closing to be satisfied as promptly as reasonably practicable and advisable (and in any event no later than the Outside Date) and to consummate and make effective the merger and the other transactions contemplated by the Merger Agreement as soon as reasonably practicable, including preparing and filing as promptly as reasonably practicable and advisable all documentation to effect all necessary notices, reports and other filings (including by filing no later than ten business days after the date of the Merger Agreement the notification and report form required under the HSR Act), and to obtain as promptly as reasonably practicable (and in any event no later than the Outside Date) all actions or non-actions, waivers, consents, registrations, expirations or terminations of waiting periods, approvals, permits and authorizations (collectively, “consents”), necessary or advisable to be obtained from any third party or any governmental entity in order to consummate the merger and the other transactions contemplated by the Merger Agreement, executing and delivering any additional instruments necessary to consummate the merger and the other transactions contemplated by the Merger Agreement and refraining from taking any action that would reasonably be expected to impede, interfere with, prevent or materially delay the consummation of the merger and the other transactions contemplated by the Merger Agreement.

C&J and Keane are required under the Merger Agreement to jointly act and cooperate with respect to effecting filings with and obtaining consents from governmental entities and to accept or agree to certain conditions, as described in “The Merger Agreement—Covenants—Cooperation; Efforts to Consummate,” including potential asset divestitures, in order to obtain such regulatory approvals.

The completion of the merger is subject to the receipt of antitrust clearance in the United States. With respect to the United States, under the HSR Act, the merger may not be completed until notification and report forms have been filed with the U.S. Federal Trade Commission (the “FTC”), and the Antitrust Division of the U.S. Department of Justice (the “DOJ”), and the applicable waiting period has expired or been terminated. A transaction requiring notification under the HSR Act may not be completed until the expiration of a 30-calendar-day waiting period following the parties’ filing of their respective HSR Act notifications or the early termination of that waiting period. If the FTC or DOJ issues a request for further information (a “Second Request”) prior to the expiration of the initial waiting period, the parties must observe a second 30-day waiting period, which would begin to run only after both parties have substantially complied with the Second Request, unless the waiting period is terminated earlier or the parties otherwise agree to extend the waiting period. C&J and Keane each filed an HSR Act notification with the FTC and the DOJ on June 28, 2019 and on July 18, 2019, early termination of the HSR Act waiting period was granted.

Appraisal Rights and Dissenters’ Rights (See page 141)

Under the DGCL and the governing documents of C&J and Keane, C&J stockholders and Keane stockholders are not entitled to appraisal rights or dissenters’ rights in connection with the merger.

Litigation Related to the Merger (See page 141)

Following the public announcement of the merger, a purported stockholder of C&J filed a putative federal class action complaint on behalf of himself and all owners of C&J Common Stock (other than defendants and related or affiliated persons) against C&J and the members of the C&J Board and two purported stockholders of C&J filed two putative federal class action complaints on behalf of themselves and all owners of C&J Common Stock (other than defendants and related or affiliated persons) against C&J, the members of the C&J Board, Keane and Merger Sub. A purported stockholder of Keane also filed a putative federal class action



 

21


Table of Contents

complaint on behalf of himself and all owners of Keane Common Stock (other than defendants and related or affiliated persons) against Keane and the members of the Keane Board. These complaints contain allegations that, among other things, the registration statement on Form S-4, of which this joint proxy statement/prospectus forms a part, fails to disclose certain allegedly material information in violation of federal securities laws. The lawsuits seek injunctive relief enjoining the merger, damages and costs, among other remedies. Another purported stockholder of Keane filed a putative class action complaint in Delaware Chancery Court on behalf of himself and all owners of Keane Common Stock (other than defendants and related or affiliated persons) against the members of the Keane Board. This complaint contains allegations contending, among other things, that the Keane Board breached their fiduciary duties in connection with alleged deficiencies in the registration statement on Form S-4, of which this joint proxy statement/prospectus forms a part. The lawsuit seeks damages and costs, among other remedies. The defendants have not yet answered or otherwise responded to these complaints. C&J, the C&J Board, Keane and the Keane Board believe these lawsuits are without merit and intend to defend against them vigorously.

Risk Factors (See page 34)

In evaluating the Merger Agreement, the merger or the issuance of shares of Keane Common Stock in the merger, you should carefully read this joint proxy statement/prospectus and give special consideration to the factors discussed in “Risk Factors.”



 

22


Table of Contents

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF C&J

The following table sets forth C&J’s selected consolidated historical financial information that has been derived from consolidated financial statements as of and for the years ended December 31, 2018 and 2017 (Successor), as of and for the years ended December 31, 2016, 2015 and 2014 (Predecessor) and as of and for the six months ended June 30, 2019 and 2018 (Successor).

In July 2016, C&J Energy Services Ltd., a Bermuda corporation (the “Predecessor”) and its consolidated subsidiaries voluntarily filed petitions for reorganization seeking relief under the provisions of Chapter 11 of the United States Bankruptcy Code, with ancillary recognition proceedings filed in Canada and Bermuda. The plan of reorganization of the Predecessor was confirmed in December 2016, and on January 6, 2017, the Predecessor’s equity was canceled, the Predecessor transferred all of its assets and operations to C&J (the “Successor”), and the Predecessor was subsequently dissolved. The consolidated historical financial information presented below reflect C&J’s emergence from bankruptcy proceedings on January 6, 2017, and fresh start accounting following its successful completion of its financial restructuring, having satisfied all of the conditions to the effectiveness of its plan of reorganization.

The information set forth below is only a summary and is not necessarily indicative of the results of future operations of C&J nor does it include the effects of the merger. The selected consolidated financial data for the years ended December 31, 2018, 2017 and 2016 have been derived from C&J’s selected financial data and audited consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2018, which is incorporated by reference herein in its entirety. The selected consolidated financial data for each of the years ended December 31, 2015 and 2014 was derived from the Predecessor’s selected financial data and audited consolidated financial statements for such years, which have not been incorporated by reference herein. The selected historical consolidated financial data for the six months ended June 30, 2019 and 2018 have been derived from C&J’s unaudited consolidated financial data included in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, which is incorporated by reference herein in its entirety. The selected balance sheet data as of June 30, 2018 was derived from C&J’s unaudited consolidated financial statements as of June 30, 2018, which have not been incorporated by reference herein.

Accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end, and the results of operations for the interim periods presented herein are not necessarily indicative of results to be expected for the year. In management’s opinion, the accompanying unaudited historical consolidated financial data include all adjustments of a normal recurring nature necessary for a fair statement of C&J’s consolidated financial position as of June 30, 2019 and 2018, and its consolidated results of operations and cash flows for the six months ended June 30, 2019 and 2018.

The selected historical consolidated financial data presented below is not intended to replace C&J’s historical consolidated financial statements. This summary should be read together with the other information contained in C&J’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, including the sections therein entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes thereto.



 

23


Table of Contents
    Successor     Predecessor  
    Six Months Ended
June 30,
    Year Ended
December 31,
    Year Ended December 31,  
(in thousands except per share amounts)   2019     2018     2018     2017     2016     2015     2014  

Statement of Operations Data:

             

Revenue

  $ 1,011,851     $ 1,163,521     $ 2,222,089     $ 1,638,739     $ 971,142     $ 1,748,889     $ 1,607,944  

Costs and expenses:

             

Direct costs

    824,853       882,599       1,724,707       1,288,092       947,255       1,523,194       1,179,227  

Depreciation and amortization

    117,849       100,730       224,867       140,650       217,440       276,353       108,145  

Selling, general and administrative expenses

    108,246       125,843       225,511       250,871       229,267       239,697       182,518  

(Gain) loss on disposal of assets

    10,718       (440     25,676       (31,463     3,075       (544     (17

Impairment expense

    79,935       —         146,015       —         436,395       791,807       —    

Research and development

    3,501       3,553       6,286       6,368       7,718       16,704       14,327  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

    (133,251     51,236       (130,973     (15,779     (870,008     (1,098,322     123,744  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income (loss):

             

Interest expense, net

    (789     (2,613     (3,899     (1,527     (157,465     (82,086     (9,840

Other income (expense), net

    16       (486     2,453       3       9,504       8,773       598  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense)

    (773     (3,099     (1,446     (1,524     (147,961     (73,313     (9,242
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before reorganization items and income taxes

    (134,024     48,137       (132,419     (17,303     (1,017,969     (1,171,635     114,502  

Reorganization items

    —         —         —         —         55,330       —         —    

Income tax expense (benefit)

    (145     (953     (2,414     (39,760     (129,010     (299,093     45,679  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

  $ (133,879   $ 49,090     $ (130,005   $ 22,457     $ (944,289   $ (872,542   $ 68,823  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Per Share Data

             

Net income (loss) per common share:

             

Basic

    (2.06     0.73       (1.94     0.37       (7.98     (8.48     1.28  

Diluted

    (2.06     0.73       (1.94     0.37       (7.98     (8.48     1.22  

Weighted average common shares outstanding:

             

Basic

    65,056       67,227       66,897       61,208       118,305       102,853       53,838  

Diluted

    65,056       67,267       66,897       61,460       118,305       102,853       56,513  
 

Statement of Cash Flows Data:

             

Cash flows from operating activities

  $ 71,405     $ 134,727     $ 342,064     $ 94     $ (107,372   $ 103,005     $ 181,837  

Cash flows from investing activities

    (88,512     (133,428     (276,160     (275,686     (26,927     (825,156     (343,412

Cash flows from financing activities

    (4,383     (5,337     (44,426     210,339       174,264       734,126       157,178  
 

Other Financial Data:

             

Capital expenditures

  $ 91,273     $ 155,790     $ 311,059     $ 210,186     $ 57,909     $ 166,321     $ 307,598  

Adjusted EBITDA

  $ 101,537     $ 170,472     $ 300,408     $ 140,714     $ (84,894   $ 65,015     $ 271,296  
 

Balance Sheet Data (at end of period):

             

Total assets

  $ 1,330,087     $ 1,682,710     $ 1,424,454     $ 1,608,857     $ 1,361,682     $ 2,198,952     $ 1,612,746  

Long-term debt(1)

  $ —       $ —       $ —       $ —       $ —       $ 1,108,123     $ 349,875  

Total liabilities(2)

  $ 298,058     $ 316,314     $ 271,125     $ 287,435     $ 214,906     $ 1,566,309     $ 830,894  

Total stockholders’ equity (deficit)

  $ 1,032,029     $ 1,366,396     $ 1,153,329     $ 1,321,422     $ (298,570   $ 632,643     $ 781,852  


 

24


Table of Contents

 

(1)

Long-term debt includes capital lease obligations and is net of original issue discount and financing costs of $86.3 million in 2015.

(2)

Total liabilities as of December 31, 2016 excludes $1.45 billion of liabilities subject to compromise in connection with C&J’s bankruptcy proceedings.

Adjusted EBITDA is defined as total earnings (loss) before net interest expense, income taxes, depreciation and amortization, other income (expense), net gain or (loss) on disposal of assets, acquisition-related costs, and non-routine items. Calculation of Adjusted EBITDA was modified in 2019, and historical calculations were adjusted to be consistent with the current calculation.

Set forth below is a reconciliation of net income (loss) to Adjusted EBITDA:

 

    Successor     Predecessor  
    Six Months Ended
June 30,
    Year Ended
December 31,
    Year Ended December 31,  
(in thousands except per share amounts)   2019     2018     2018     2017     2016     2015     2014  

Net income (loss)

  $ (133,879   $ 49,090     $ (130,005   $ 22,457     $ (944,289   $ (872,542   $ 68,823  

Depreciation and amortization

    117,849       100,730       224,867       140,650       217,440       276,353       108,145  

Impairment expense

    79,935       —         146,015       —         436,395       791,807       —    

(Gain) loss on disposal of assets

    10,718       (440     25,676       (31,463     3,075       (544     (17

Interest expense, net

    789       2,613       3,899       1,527       157,465       82,086       9,840  

Other (income) expense, net

    (16     486       (2,453     (3     (9,504     (8,773     (598

Income tax expense (benefit)

    (145     (953     (2,414     (39,760     (129,010     (299,093     45,679  

Severance and business divestiture costs

    11,004       6,180       7,461       5,954       31,498       5,849       35  

Inventory reserve

    —         —         6,131       —         35,350       31,109       —    

Restructuring costs and other

    1,777       3,286       4,330       13,309       33,082       10,742       880  

Merger/transaction-related costs

    2,640       970       970       4,606       10,534       42,662       20,159  

Non-cash share-based compensation, excluding severance

    10,865       8,510       15,931       23,437       17,740       18,549       18,350  

Reorganization costs

    —         —         —         —         55,330       —         —    

Immaterial accounts payable accrual correction

    —         —         —         —         —         (13,190     —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

  $ 101,537     $ 170,472     $ 300,408     $ 140,714     $ (84,894   $ 65,015     $ 271,296  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


 

25


Table of Contents

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF KEANE

The following table presents selected historical consolidated and combined financial data for Keane as of and for the years ended December 31, 2018, 2017, 2016, 2015 and 2014 and unaudited historical condensed consolidated data for Keane as of and for the six months ended June 30, 2019 and 2018. The selected historical condensed consolidated and combined financial data for each of the years ended and as of December 31, 2018, 2017 and 2016 were derived from the audited financial statements included in Keane’s Annual Report on Form 10-K, filed on February 27, 2019, and Annual Report on Form 10-K/A, filed on August 19, 2019, each of which are incorporated herein by reference. The selected historical condensed and combined financial data for the years ended and as of December 31, 2015 and 2014 were derived from audited financial statements of Keane not included or incorporated by reference herein. The selected unaudited historical condensed consolidated financial data for each of the six months ended and as of June 30, 2019 and 2018 were derived from the unaudited historical condensed consolidated financial statements included in Keane’s Quarterly Report on Form 10-Q, filed on July 31, 2019, and Quarterly Report on Form 10-Q/A, filed on August 19, 2019, each of which are incorporated herein by reference. The selected balance sheet data as of June 30, 2018 was derived from Keane’s unaudited condensed consolidated financial statements as of June 30, 2018, which have not been incorporated herein by reference.

Accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end, and the results of operations for the interim periods presented herein are not necessarily indicative of results to be expected for the year. In management’s opinion, the accompanying unaudited historical condensed consolidated financial data include all adjustments of a normal recurring nature necessary for a fair statement of Keane’s unaudited condensed consolidated financial position as of June 30, 2019 and 2018, and its unaudited condensed consolidated results of operations and cash flows for the six months ended June 30, 2019 and 2018.

The selected historical condensed consolidated and combined financial data set forth below is not necessarily indicative of future results of Keane and should be read together with the other information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes included in Keane’s Annual Report on Form 10-K, filed on February 27, 2019, and Annual Report on Form 10-K/A, filed on August 19, 2019, and Keane’s Quarterly Report on Form 10-Q, filed on July 31, 2019, and Quarterly Report on Form 10-Q/A, filed on August 19, 2019, each of which are incorporated herein by reference.

See “Where You Can Find More Information.”



 

26


Table of Contents
    Six Months Ended
June 30,
    Year Ended December 31,  
(in thousands, except per share amounts)   2019     2018     2018     2017(1)     2016(2)     2015     2014  

Statement of Operations Data:

             

Revenue

  $ 849,387     $ 1,091,549     $ 2,137,006     $ 1,542,081     $ 420,570     $ 366,157     $ 395,834  

Cost of services(3)

    662,149       851,093       1,660,546       1,282,561       416,342       306,596       323,718  

Depreciation and amortization

    141,362       119,455       259,145       159,280       100,979       69,547       68,254  

Selling, general and administrative expenses

    60,507       58,009       114,258       93,526       53,155       26,081       25,459  

(Gain) loss on disposal of assets

    151       4,056       5,047       (2,555     (387     (270     —    

Impairment

    —         —         —         —         185       3,914       11,098  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

    864,169       1,032,613       2,038,996       1,532,812       570,274       405,868       428,529  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

    (14,782     58,936       98,010       9,269       (149,704     (39,711     (32,695
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expense), net

    405       (12,973     (905     13,963       916       (1,481     (2,418

Interest expense(4)

    (10,872     (21,307     (33,504     (59,223     (38,299     (23,450     (10,473
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other expenses

    (10,467     (34,280     (34,409     (45,260     (37,383     (24,931     (12,891
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

    (25,249     24,656       63,601       (35,991     (187,087     (64,642     (45,586

Income tax expense

    (1,538     (2,232     (4,270     (150     —         —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

  $ (26,787   $ 22,424     $ 59,331     $ (36,141   $ (187,087   $ (64,642   $ (45,586
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Per Share Data:(5)

             

Net income (loss) per common share:

             

Basic

  $ (0.26   $ (0.20   $ 0.54     $ (0.34   $ (2.14   $ (0.74   $ (0.52

Diluted

    (0.26     (0.20     0.54       (0.34     (2.14     (0.74     (0.52

Weighted average common shares outstanding:

             

Basic

    104,631       111,663       109,335       106,321       87,313       87,313       87,313  

Diluted

    104,631       111,879       109,660       106,321       87,313       87,313       87,313  

Statement of Cash Flows Data:

             

Cash flows from operating activities

  $ 141,925     $ 143,425     $ 350,311     $ 79,691     $ (54,054   $ 37,521     $ 18,732  

Cash flows from investing activities

    (97,342     (130,496     (297,506     (250,776     (227,161     (26,038     (138,870

Cash flows from financing activities

    (7,668     587       (68,554     218,122       276,633       (10,518     137,298  

Other Financial Data:

             

Capital expenditures(6)

  $ 103,675     $ 146,191     $ 291,543     $ 189,629     $ 23,545     $ 27,246     $ 141,393  

Adjusted EBITDA(8)

    146,497       202,570       391,856       214,525       1,921       41,885       59,563  

Balance Sheet Data (at end of period):

             

Total assets

  $ 1,064,837     $ 1,099,005     $ 1,054,579     $ 1,043,116     $ 536,940     $ 324,795     $ 418,855  

Long-term debt (including current portion)(7)

    338,978       341,277       340,730       275,055       269,750       207,067       208,688  

Total liabilities

    599,581       593,624       567,398       530,024       374,688       244,635       272,215  

Total stockholders’ equity

    465,256       505,381       487,181       513,092       162,252       80,160       146,640  

 

(1)

Commencing on July 3, 2017, Keane’s consolidated and combined financial statements also include the financial position, results of operations and cash flows of RockPile Energy Services, LLC and its consolidated subsidiaries (“RockPile”).



 

27


Table of Contents
(2)

Commencing on March 16, 2016, Keane’s consolidated and combined financial statements also include the financial position, results of operations and cash flows of the U.S. assets and assumed certain liabilities of Trican Well Service L.P. (the “Acquired Trican Operations”).

(3)

Excludes depreciation and amortization, shown separately.

(4)

Interest expense during the six months ended June 30, 2018 includes $7.6 million in write-offs of deferred financing costs incurred in connection with the extinguishment of Keane’s pre-existing 2017 term loan facility. Interest expense during 2018 includes $7.6 million in write-offs of deferred financing costs, incurred in connection with the early debt extinguishment of Keane’s then-existing term loan facility. Interest expense during 2017 includes $15.8 million of prepayment penalties and $15.3 million in write-offs of deferred financing costs, incurred in connection with the refinancing of Keane’s then existing revolving credit and security agreement and the early debt extinguishment of Keane’s term loan facility provided by that certain credit agreement entered into on March 16, 2016 by KGH Intermediate Holdco I, LLC, KGH Intermediate Holdco II, LLC and Keane Frac, LP with certain financial institutions (collectively, the “2016 Term Lenders”) and CLMG Corp., as administrative agent for the 2016 Term Lenders, and 12% secured notes due 2019.

(5)

The net income (loss) per common share and weighted average number of common shares outstanding amounts for 2017, 2016, 2015 and 2014 have been computed to give effect to a series of organizational transactions in connection with Keane’s initial public offering but do not consider the 15,700,000 shares of common stock newly-issued by Keane therein.

(6)

Capital expenditures do not include, for 2018, $35.0 million of capital expenditures related to the asset acquisition from Refinery Specialties, Incorporated (“RSI”), for 2017, $116.6 million of capital expenditures related to the acquisition of RockPile and, for 2016, $205.4 million of capital expenditures related to the acquisition of the Acquired Trican Operations.

(7)

Long-term debt includes $7.5 million, $8.2 million and $18.4 million of unamortized debt discount and debt issuance costs as of December 31, 2018, 2017 and 2016, respectively, and excludes capital lease obligations.

(8)

EBITDA and Adjusted EBITDA are non-GAAP measures that provide supplemental information Keane believes is useful to analysts and investors to evaluate Keane’s ongoing results of operations, when considered alongside other GAAP measures such as net income, and operating income. These non-GAAP financial measures exclude the financial impact of items Keane does not consider in assessing its ongoing operating performance, and thereby facilitate review of Keane’s operating performance on a period-to-period basis. Other companies may have different capital structures and comparability to Keane’s results of operations may be impacted by the effects of acquisition accounting on its depreciation and amortization. As a result of the effects of these factors and factors specific to other companies, Keane believes EBITDA and Adjusted EBITDA provide helpful information to analysts and investors to facilitate a comparison of Keane’s operating performance to that of other companies.

EBITDA is defined as net income (loss) adjusted to eliminate the impact of interest, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA, further adjusted to eliminate the impact of certain items management does not consider in assessing ongoing performance.



 

28


Table of Contents

Set forth below is a reconciliation of net loss to EBITDA and Adjusted EBITDA:

 

    Six Months Ended
June 30,
    Year Ended December 31,  
(in thousands)   2019     2018     2018     2017     2016     2015     2014  

Net income (loss)

  $ (26,787   $ 22,424     $ 59,331     $ (36,141   $ (187,087   $ (64,642   $ (45,586

Depreciation and amortization

    141,362       119,455       259,145       159,280       100,979       69,547       68,254  

Interest expense, net

    10,872       21,307       33,504       59,223       38,299       23,450       10,473  

Income tax (benefit) expense(a)

    1,538       2,232       4,270       150       (114     793       366  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

  $ 126,985     $ 165,418     $ 356,250     $ 182,512     $ (47,923   $ 29,148     $ 33,507  

Acquisition, integration and expansion(b)

    6,108       16,081       16,609       (4,674     35,630       6,272       9,062  

Offering-related expenses(c)

    —         12,969       12,969       7,069       1,672       —         —    

Commissioning costs

    —         —         —         12,565       9,998       —         —    

Impairment of assets(d)

    —         —         —         —         185       3,914       11,098  

Non-cash stock compensation(e)

    9,610       7,113       17,166       10,578       1,985       312       2,417  

Changes in value of financial instruments(f)

    —         —         —         —         —         —         2,270  

Other(g)

    3,794       989       (11,138     6,475       374       2,239       1,209  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

  $ 146,497     $ 202,570     $ 391,856     $ 214,525     $ 1,921     $ 41,885     $ 59,563  

 

(a)

Income tax (benefit) expense as presented in the consolidated and combined statement of operations does not include the provision for Texas margin tax for 2016.

(b)

For the six months ended June 30, 2019, represents transaction costs related to the merger with C&J. For the six months ended June 30, 2018, represents adjustment to the Contingent Value Right (CVR) liability based on the final agreed-upon settlement, which was recorded in other income (expense), net and a markdown to fair value of real estate pending for sale in Mathis, Texas acquired during the acquisition of the Acquired Trican Operations, which was recorded in (gain) loss on disposal of assets. Represents professional fees, integration and divestiture costs, contingent value rights liability adjustments, earn-outs, lease-termination costs, severance, start-up and other costs associated with the acquisition of RockPile, the Acquired Trican Operations, the integration and the acquisition of Ultra Tech Frac Services, LLC, asset acquisition from RSI and organic growth initiatives and wind-down of Keane’s Canadian operations. For 2018, $0.2 million was recorded in cost of services, $0.4 million was recorded in selling, general and administrative expenses, $2.7 million was recorded in gain on disposal of assets and $13.3 million was recorded in other expense, net. For 2017, $1.7 million was recorded in costs of services, $10.7 million was recorded in selling, general and administrative expense, $3.3 million gain was recorded in gain on disposal of assets and $13.8 million of income was recorded in other expense, net. For 2016, $13.9 million was recorded in costs of services, $21.4 million was recorded in selling, general and administrative expenses and $0.3 million was recorded in other expense, net. For 2015, $1.1 million was recorded in costs of services, $2.9 million was recorded in selling, general and administrative expenses, $0.6 million gain was recorded in gain on disposal of assets and $1.7 million was recorded in other expense, net. For 2014, $8.6 million was recorded in costs of services, $0.3 million was recorded in selling, general and administrative expenses and $0.2 million was recorded in other expense, net.

(c)

For the six months ended June 30, 2018, represents primarily professional fees and other miscellaneous expenses to consummate the secondary common stock offering completed in January 2018. These expenses were recorded in selling, general and administrative expenses, as Keane did not receive any proceeds in the offering to offset the expenses. For 2018, 2017 and 2016, represents professional fees and other miscellaneous expenses related to organizational transactions, Keane’s initial public offering and the sale of Keane’s stock by a selling stockholder in January 2018. For 2018, $13.0 million was recorded in selling, general and administrative expenses. For 2017, $1.3 million was recorded in cost of services and $5.8 million was recorded in selling, general and administrative expense. For 2016, $1.7 million was recorded in selling, general and administrative expenses.



 

29


Table of Contents
(d)

Represents non-cash impairment charges with respect to Keane’s long-lived assets and intangible assets.

(e)

For the six months ended June 30, 2019 and 2018, represents non-cash amortization of equity awards issued under Keane’s Equity and Incentive Award Plan (the “Equity Plan”). According to the Equity Plan, the Compensation Committee of the Board of Directors can approve awards in the form of restricted stock, restricted stock units, and/or other deferred compensation. Consistent with prior policy, amortization of awards is made ratably over the vesting periods, beginning with the grant date, based on the total fair value determined on grant date and recorded in selling, general and administrative expenses. For 2018 and 2017, represents non-cash amortization of equity awards issued under the Equity Plan. According to the Equity Plan, the compensation committee of the Keane Board can approve awards in the form of Keane Restricted Stock Awards, Keane RSU Awards and/or other deferred compensation. For 2016, 2015 and 2014, represents adjustments to the non-cash profit interests related to Keane Group Holdings, LLC. In all five years, these costs were recorded in selling, general and administrative expenses.

(f)

Represents non-cash loss on debt extinguishment.

(g)

For the six months ended June 30, 2019, represents legal contingencies, which is recorded in selling, general and administrative expenses. For the six months ended June 30, 2018 represents primarily rating agency fees for establishing initial ratings in connection with entering into a new $350 million senior secured term facility. These expenses were recorded in selling, general and administrative expenses. For 2018, 2017, 2016, 2015 and 2014, represents gain recognized for insurance proceeds received in connection with a fire that damaged a portion of one hydraulic fracturing fleet on July 1, 2018, contingency accruals related to certain litigation claims, readiness costs associated with Keane’s initial internal controls design documentation for Sarbanes-Oxley compliance, using COSO 2013 framework, net gains on disposal of assets, rating agency fees for establishing initial ratings in connection with entering into the $350.0 million term loan facility obtained on May 25, 2018 and forfeiture of deposits on hydraulic fracturing equipment purchase orders. For 2018, $3.8 million was recorded in selling, general and administrative expenses and $14.9 million was recorded in other expense, net. For 2017, $0.7 million was recorded in gain on disposal of assets and $7.2 million was recorded in selling, general and administrative expenses. For 2016, $0.4 million was recorded in other expense, net. For 2015, $0.2 million was recorded in costs of services and $2.0 million was recorded in other expense, net. For 2014, $0.7 million was recorded in selling, general and administrative expenses and $0.5 million was recorded in other expense, net.



 

30


Table of Contents

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following selected unaudited pro forma condensed combined balance sheet data gives effect to the merger as if it had occurred on June 30, 2019, while the unaudited pro forma condensed combined statement of operations data for the year ended December 31, 2018 and the six months ended June 30, 2019 is presented as if the merger had occurred on January 1, 2018. The following selected unaudited pro forma condensed combined financial statements have been prepared for illustrative purposes only and are not necessarily indicative of what the Combined Company’s financial position or results of operations actually would have been had the merger occurred as of the dates indicated. In addition, the selected unaudited pro forma condensed combined financial statements do not purport to project the future financial position or operating results of the Combined Company. Future results may vary significantly from the results reflected because of various factors, including those discussed in “Risk Factors.” The following selected unaudited pro forma condensed combined financial statements should be read in conjunction with the section titled “Unaudited Pro Forma Condensed Combined Financial Statements” and the related notes.

 

(in thousands, except per share amounts)    Six Months
Ended
June 30,

2019
    Year
Ended
December 31,
2018
 
     (unaudited)  

Pro Forma Condensed Consolidated Combined Statement of Operations Data:

    

Revenue

   $ 1,861,238     $ 4,359,095  

Net income (loss)

   $ (86,698   $ 50,832  

Net income (loss) per share, basic

   $ (0.41   $ 0.24  

Net income (loss) per share, diluted

   $ (0.41   $ 0.23  

 

(in thousands)    Six Months
Ended
June 30,

2019
 
     (unaudited)  

Pro Forma Condensed Combined Balance Sheet Data:

  

Cash and cash equivalents

   $ 164,595  

Total assets

   $ 1,928,767  

Total liabilities

   $ 941,858  

Total stockholders’ equity

   $ 986,909  


 

31


Table of Contents

COMPARATIVE HISTORICAL AND UNAUDITED PER SHARE INFORMATION

The following tables present historical and pro forma per share data of C&J and Keane for the six months ended June 30, 2019 and year ended December 31, 2018. The pro forma per share data for the six months ended June 30, 2019 and year ended December 31, 2018 is presented as if the merger had been completed on January 1, 2018. Except for the historical information for the year ended December 31, 2018, the information provided in the table below is unaudited.

Historical per share data of C&J for the year ended December 31, 2018 and the six months ended June 30, 2019 was derived from C&J’s historical financial statements for the respective periods. Historical per share data of Keane for the year ended December 31, 2018 and the six months ended June 30, 2019 was derived from Keane’s historical financial statements for the respective periods.

Unaudited pro forma combined per share data for the year ended December 31, 2018 and the six months ended June 30, 2019 was derived from and should be read in conjunction with the unaudited pro forma condensed combined financial data included under “Unaudited Pro Forma Condensed Combined Financial Statements.” The pro forma information is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the merger had been completed as of the beginning of the period.

The information provided in the tables below should be read together with the historical consolidated and combined financial statements and related notes of C&J and Keane, filed by each with the SEC, and incorporated by reference in this joint proxy statement/prospectus, and with the unaudited pro forma condensed consolidated and combined financial statements included in “Unaudited Pro Forma Condensed Combined Financial Statements.”

 

     Six Months Ended June 30, 2019  
     C&J
Historical
     Keane
Historical
     Pro Forma
Combined
 
     (unaudited)      (unaudited)      (unaudited)  

Net Earnings (Loss) Per Share

        

Basic

   $ (2.06    $  (0.26)      $  (0.41)  

Diluted

   $ (2.06    $ (0.26)      $  (0.41)  

Book Value Per Share

   $ 15.62      $    4.43       $ 4.70   

Cash Dividends Per Share(1)

   $      $ —       $  
     Year Ended December 31, 2018  
     C&J
Historical
     Keane
Historical
     Pro Forma
Combined
 
                   (unaudited)  

Net Earnings (Loss) Per Share

        

Basic

   $  (1.94)      $ 0.54       $  0.24  

Diluted

   $ (1.94)      $ 0.54       $  0.23  

Book Value Per Share

   $  17.44       $ 4.68      

Cash Dividends Per Share(1)

   $ —       $ —       $  
        

 

(1)

Neither C&J nor Keane have paid any cash dividends on their shares of common stock and Keane does not intend to do so in the foreseeable future. Prior to the execution of the Merger Agreement, the C&J Board declared the Pre-closing Cash Dividend of $1.00 per share, payable to holders of C&J Common Stock as of the record date of such Pre-closing Cash Dividend, subject to the C&J Board determining that the surplus of C&J exceeds the amount of the aggregate Pre-closing Cash Dividend. Please see “The Merger Agreement—C&J Pre-closing Cash Dividend.”



 

32


Table of Contents

MARKET PRICE INFORMATION

The C&J Common Stock and Keane Common Stock are traded on the NYSE under the symbols “CJ” and “FRAC,” respectively.

The high and low trading prices for the C&J Common Stock as of June 14, 2019, the last trading day immediately before the public announcement of the merger were $11.34 and $10.71, respectively. The high and low trading prices for the Keane Common Stock as of June 14, 2019, the last trading day immediately before the public announcement of the merger was $7.44 and $6.98, respectively.

As of August 29, 2019, the last date before the date of this joint proxy statement/prospectus for which it was practicable to obtain this information, there were 66,025,630 shares of C&J Common Stock outstanding and approximately four holders of record of C&J Common Stock, and 105,015,124 shares of Keane Common Stock outstanding and approximately five holders of record of Keane Common Stock.

The following table sets forth the closing sale price per share of C&J Common Stock and Keane Common Stock as reported on the NYSE as of June 14, 2019, the last trading day prior to the public announcement of the merger, and on August 29, 2019, the last practicable trading day before the date of this joint proxy statement/prospectus. The table also shows the estimated implied value of the merger consideration proposed for each share of C&J Common Stock as of the same two dates. The implied value was calculated by multiplying the closing price of a share of Keane Common Stock on the relevant date by the Exchange Ratio of 1.6149 shares of Keane Common Stock for each share of C&J Common Stock. The implied per share value of the merger consideration set forth below does not include the Pre-closing Cash Dividend of $1.00 per share of C&J Common Stock.

 

     C&J
Common Stock
Closing Price
     Keane
Common Stock
Closing Price
     Exchange
Ratio
     Estimated Keane
Equivalent Per
Share Value
 

June 14, 2019

   $ 10.72      $ 6.99        1.6149      $ 11.29  

August 29, 2019

   $ 9.51      $ 5.27        1.6149      $ 8.51  

The market prices of C&J Common Stock and Keane Common Stock have fluctuated since the date of the announcement of the Merger Agreement and will continue to fluctuate prior to the completion of the merger. No assurance can be given concerning the market prices of C&J Common Stock or Keane Common Stock before completion of the merger or of Combined Company Common Stock after completion of the merger. Because the Exchange Ratio, which determines the merger consideration, is fixed and will not be adjusted for changes in the market prices of either C&J Common Stock or Keane Common Stock, the market price of Keane Common Stock (and, therefore, the value of the merger consideration) when received by C&J stockholders after the merger is completed could be greater than, less than or the same as shown in the table above. Accordingly, these comparisons may not provide meaningful information to stockholders in determining how to vote with respect to the proposals described in this joint proxy statement/prospectus. We urge you to obtain current market quotations for C&J Common Stock and Keane Common Stock and to review carefully the other information contained in this joint proxy statement/prospectus or incorporated by reference into this joint proxy statement/prospectus. Please see “Risk Factors—Risks Relating to the Merger—Because the Exchange Ratio is fixed and will not be adjusted in the event of any change in either C&J’s or Keane’s stock price, the value of the shares of the Combined Company is uncertain” and “Where You Can Find More Information.”



 

33


Table of Contents

RISK FACTORS

In deciding whether to vote for the C&J Merger Proposal and the Keane Share Issuance Proposal, as applicable, you are urged to carefully consider all of the information included or incorporated by reference in this joint proxy statement/prospectus listed in “Where You Can Find More Information.” You should also read and consider the risks associated with each of the businesses of C&J and Keane because these risks will also affect the Combined Company. The risks associated with the business of C&J can be found in C&J’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and the risks associated with the business of Keane can be found in Keane’s Annual Report on Form 10-K for the year ended December 31, 2018, as such risks may be updated or supplemented in each company’s subsequently filed Quarterly Reports on Form 10-Q or Current Reports on Form 8-K (excluding any information and exhibits furnished under Item 2.02 or 7.01 thereof), each of which are incorporated by reference into this joint proxy statement/prospectus. In addition, you are urged to carefully consider the following material risks relating to the merger, the business of C&J, the business of Keane and the business of the Combined Company.

Risks Relating to the Merger

Because the Exchange Ratio is fixed and will not be adjusted in the event of any change in either C&J’s or Keane’s stock price, the value of the shares of the Combined Company is uncertain.

Upon completion of the merger, each share of C&J Common Stock outstanding immediately prior to the merger, other than C&J Excluded Shares, will be converted into and become exchangeable for 1.6149 shares of Keane Common Stock. The Exchange Ratio is fixed in the Merger Agreement and will not be adjusted for changes in the market price of either C&J Common Stock or Keane Common Stock. The market prices of C&J Common Stock and Keane Common Stock have fluctuated prior to and after the date of the announcement of the Merger Agreement and will continue to fluctuate from the date of this joint proxy statement/prospectus to the date of the C&J Special Meeting and the Keane Special Meeting, respectively, and the date the merger is consummated, and the market price of Combined Company Common Stock will continue to fluctuate thereafter.

Because the value of the merger consideration will depend on the market price of Keane Common Stock at the time the merger is completed, C&J stockholders will not know, or be able to determine, at the time of the C&J Special Meeting the market value of the merger consideration they would receive upon completion of the merger. Similarly, Keane stockholders will not know, or be able to determine, at the time of the Keane Special Meeting the market value of the shares of Keane Common Stock to be issued as merger consideration to C&J stockholders pursuant to the Merger Agreement compared to the market value of the shares of C&J Common Stock that are being exchanged in the merger.

Stock price changes may result from a variety of factors, including, among others, general market and economic conditions, changes in C&J’s or Keane’s respective businesses, operations and prospects, reductions or changes in U.S. government spending or budgetary policies, market assessments of the likelihood that the merger will be completed, interest rates, general market, industry and economic conditions, such as oil prices and demand for services in the oilfield services sector, and other factors generally affecting the respective prices of C&J Common Stock or Keane Common Stock, federal, state and local legislation, governmental regulation and legal developments in the industry segments in which C&J or Keane operate, and the timing of the merger and receipt of Requisite Regulatory Approvals.

Many of these factors are beyond C&J’s and Keane’s control, and neither C&J nor Keane are permitted to terminate the Merger Agreement solely due to a decline in the market price of the common stock of the other party. You are urged to obtain current market quotations for C&J Common Stock and Keane Common Stock in determining whether to vote for the C&J Merger Proposal or Keane Share Issuance Proposal, as applicable. In addition, see “Unaudited Comparative Per Share Information” and “Market Price Information.”

 

34


Table of Contents

The merger may not be completed and the Merger Agreement may be terminated in accordance with its terms.

The merger is subject to a number of conditions that must be satisfied, including the approval of the C&J Merger Proposal and the Keane Share Issuance Proposal, or waived (to the extent permissible), in each case prior to the completion of the merger. These conditions are described in “The Merger Agreement—Conditions to the Completion of the Merger.” These conditions to the completion of the merger, some of which are beyond the control of C&J and Keane, may not be satisfied or waived in a timely manner or at all, and, accordingly, the merger may be delayed or not completed. Additionally, either C&J or Keane may terminate the Merger Agreement under certain circumstances, including, among other reasons, if the merger is not completed by December 15, 2019 (which date may be extended to March 16, 2020 under certain circumstances if certain Requisite Regulatory Approvals are not obtained by December 15, 2019). C&J will be required to pay to Keane a termination fee of $30 million if the Merger Agreement is terminated: (i) by either party pursuant to an Outside Date termination or a C&J no vote termination, or by Keane pursuant to a C&J Terminable Breach if (a) a bona fide Acquisition Proposal with respect to C&J has been publicly made directly to C&J stockholders or otherwise has become publicly known or any person has publicly announced an intention to make an Acquisition Proposal with respect to C&J, and such Acquisition Proposal or intention to make an Acquisition Proposal is not withdrawn; and (b) within 12 months after such termination, either C&J or any of its subsidiaries has entered into an Alternative Acquisition Agreement with respect to any Acquisition Proposal with respect to C&J or any Acquisition Proposal with respect to C&J is consummated; (ii) by Keane pursuant to a Change of Recommendation by C&J; or (iii) by either C&J or Keane pursuant to a C&J no vote termination (and, at the time of such termination, Keane had the right to terminate the Merger Agreement as a result of a Change of Recommendation by C&J). Keane will be required to pay to C&J a termination fee of $30 million if the Merger Agreement is terminated: (i) by either party pursuant to an Outside Date termination or a Keane no vote termination, or by C&J pursuant to a Keane Terminable Breach if (a) a bona fide Acquisition Proposal with respect to Keane has been publicly made directly to Keane stockholders or otherwise has become publicly known or any person has publicly announced an intention to make an Acquisition Proposal with respect to Keane, and such Acquisition Proposal or intention to make an Acquisition Proposal is not withdrawn; and (b) within 12 months after such termination, either Keane or any of its subsidiaries has entered into an Alternative Acquisition Agreement with respect to any Acquisition Proposal with respect to Keane or any Acquisition Proposal with respect to Keane is consummated; (ii) by C&J pursuant to a Change of Recommendation by Keane; or (iii) by either C&J or Keane pursuant to a Keane no vote termination (and, at the time of such termination, C&J had the right to terminate the Merger Agreement as a result of a Change of Recommendation by Keane). If the Merger Agreement is terminated under certain specified circumstances, C&J or Keane, as applicable, may also be required to pay to the other party an expense reimbursement of up to $7.5 million. For more information, see the sections titled “The Merger Agreement—Termination of the Merger Agreement” and “The Merger Agreement—Termination of the Merger Agreement—Termination Fees.”

The termination of the Merger Agreement could negatively impact C&J or Keane.

If the merger is not completed for any reason, including as a result of a failure to obtain the C&J Required Vote or the Keane Required Vote, the ongoing businesses of C&J and Keane may be adversely affected and, without realizing any of the benefits of having completed the merger, C&J and Keane may be subject to a number of risks, including the following:

 

   

each company may experience negative reactions from the financial markets, including negative impacts on its stock price;

 

   

each company may experience negative reactions from its suppliers, customers and employees;

 

   

each company will be required to pay their respective costs relating to the merger, such as financial advisory, legal and accounting costs and associated fees and expenses, whether or not the merger is completed;

 

   

the Merger Agreement places certain restrictions on the conduct of each company’s business prior to completion of the merger and such restrictions, the waiver of which is subject to the consent of the

 

35


Table of Contents
 

other company (not to be unreasonably withheld, conditioned or delayed), such restrictions may prevent C&J or Keane from taking certain other specified actions during the pendency of the merger, for example, neither of C&J and Keane may:

 

   

make or propose any change to its organizational documents or, except for amendments that would both not materially restrict the operations of its businesses and not reasonably be expected to prevent, materially delay or materially impair the ability of such party to consummate the transactions contemplated by the Merger Agreement, the organizational documents of any of its subsidiaries (including, in the case of Keane, Merger Sub);

 

   

except for any such transactions among its direct or indirect wholly owned subsidiaries, (i) merge or consolidate itself or any of its subsidiaries with any other person, or (ii) restructure, reorganize or completely or partially liquidate;

 

   

acquire assets outside of the ordinary course from any other person (i) with a fair market value or purchase price in excess of $10 million in the aggregate in any transaction or series of related transactions (including incurring any indebtedness related thereto), in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or (ii) that would reasonably be expected to prevent, materially delay or materially impair the ability of such party to consummate the merger or other transactions contemplated by the Merger Agreement, in each case, other than acquisitions of inventory or other goods in the ordinary course and transactions among such party and its direct or indirect wholly owned subsidiaries or among such party’s direct or indirect wholly owned subsidiaries;

 

   

issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, or otherwise enter into any contract or understanding with respect to the voting of, any shares of its capital stock or of any of its subsidiaries (other than the issuance of shares (i) by its direct or indirect wholly owned subsidiary to it or another of its direct or indirect wholly owned subsidiaries, (ii) in respect of equity-based awards outstanding as of the date of the Merger Agreement, or (iii) granted in accordance with the terms of the Merger Agreement with respect to employee compensation and benefits, in the case of (ii) and (iii), in accordance with their terms and, as applicable, the plan documents as in effect on the date of the Merger Agreement), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities; or

 

   

create or incur any encumbrance (other than certain encumbrances permitted pursuant to the Merger Agreement) over any material portion of such party’s and its subsidiaries’ consolidated properties and assets that is not incurred in the ordinary course on any of its assets or any of its subsidiaries, except for encumbrances (i) that are required by or automatically effected by contracts in place as of the date of the Merger Agreement, (ii) that do not materially detract from the value of such assets or (iii) that do not materially impair the operations of such party or any of its subsidiaries. For a full description of the restrictive covenants applicable to C&J and Keane, see “The Merger Agreement—Covenants—Conduct of Business Prior to the Effective Time;” and

 

   

matters relating to the merger (including integration planning) will require substantial commitments of time and resources by C&J management and Keane management, which could otherwise have been devoted to day-to-day operations or to other opportunities that may have been beneficial to C&J or Keane, as applicable, as an independent company.

 

36


Table of Contents

The market price for shares of Combined Company Common Stock following the completion of the merger may be affected by factors different from, or in addition to, those that historically have affected or currently affect the market prices of shares of C&J Common Stock and Keane Common Stock.

Upon consummation of the merger, C&J stockholders and Keane stockholders will both hold shares of common stock in the Combined Company. C&J’s businesses differ in some regards from those of Keane, and Keane’s businesses differ in some regards from those of C&J, and, accordingly, the results of operations of the Combined Company will be affected by some factors that are different from those currently or historically affecting the results of operations of C&J and those currently or historically affecting the results of operations of Keane. The results of operations of the Combined Company may also be affected by factors different from those that currently affect or have historically affected either C&J or Keane. For a discussion of the businesses of each of C&J and Keane and some important factors to consider in connection with those businesses, please see “Summary—The Parties to the Merger” and the documents and information included elsewhere in this joint proxy statement/prospectus or incorporated by reference into this joint proxy statement/prospectus and listed under “Where You Can Find More Information.”

The shares of Combined Company Common Stock to be received by C&J stockholders as a result of the merger will have rights different from the shares of C&J Common Stock.

Upon consummation of the merger, the rights of C&J stockholders, who will become stockholders of the Combined Company, will be governed by the certificate of incorporation of the Combined Company (the “Combined Company Charter”) and bylaws of the Combined Company (the “Combined Company Bylaws”). The rights associated with C&J Common Stock are different from the rights which will be associated with Combined Company Common Stock. See “Comparison of Stockholders’ Rights” for a discussion of these rights.

C&J stockholders and Keane stockholders will each have reduced ownership and voting interest in and will exercise less influence over management of the Combined Company.

C&J stockholders currently have the right to vote in the election of the C&J Board and on other matters affecting C&J, and Keane stockholders currently have the right to vote in the election of the Keane Board and on other matters affecting Keane. Upon consummation of the merger, each C&J stockholder and each Keane stockholder will become a stockholder of the Combined Company with a percentage ownership of the Combined Company that is smaller than such stockholder’s percentage ownership of C&J or Keane, as applicable, immediately prior to the merger. As of the date of this joint proxy statement/prospectus, based on the Exchange Ratio, the shares outstanding of C&J Common Stock (plus outstanding C&J RSU Awards, outstanding C&J Performance Share Awards, and outstanding C&J Restricted Stock Awards) and the shares outstanding of Keane Common Stock (plus outstanding Keane RSU Awards, outstanding Keane PSU Awards and outstanding Keane Restricted Stock Awards), C&J and Keane estimate that holders of shares of C&J Common Stock as of immediately prior to the completion of the merger will hold, in the aggregate, approximately 50% of the issued and outstanding shares of Combined Company Common Stock (based on fully diluted shares outstanding of the Combined Company) immediately following the completion of the merger, and holders of shares of Keane Common Stock as of immediately prior to the completion of the merger will hold, in the aggregate, approximately 50% of the issued and outstanding shares of Combined Company Common Stock (based on fully diluted shares outstanding of the Combined Company) immediately following the completion of the merger. Because of this, each share of C&J Common Stock and each share of Keane Common Stock will represent a smaller percentage ownership of the Combined Company than it represented in C&J and Keane, respectively. In addition, the twelve members of the Combined Company Board as of the effective time will include the six C&J Designees and the six Keane Designees. Accordingly, each C&J stockholder and each Keane stockholder will have less influence on the management and policies of the Combined Company than such stockholder now has on the management and policies of C&J or Keane, as applicable.

 

37


Table of Contents

Until the completion of the merger or the termination of the Merger Agreement in accordance with its terms, C&J and Keane are each prohibited from entering into certain transactions and taking certain actions that might otherwise be beneficial to C&J or Keane and their respective stockholders.

From and after the date of the Merger Agreement and prior to completion of the merger, the Merger Agreement restricts C&J and Keane from taking specified actions without the consent of the other party and requires that the business of each company and its respective subsidiaries be conducted in all material respects in the ordinary course of business consistent with past practice. These restrictions may prevent C&J or Keane from making appropriate changes to their respective businesses or organizational structures or from pursuing attractive business opportunities that may arise prior to the completion of the merger, and could have the effect of delaying or preventing other strategic transactions. Adverse effects arising from the pendency of the merger could be exacerbated by any delays in consummation of the merger or termination of the Merger Agreement. Please see “The Merger Agreement—Covenants—Conduct of Business Prior to the Effective Time.”

Obtaining required approvals and satisfying closing conditions may prevent or delay completion of the merger.

The merger is subject to a number of conditions to closing as specified in the Merger Agreement. These closing conditions include, among others, approval for listing on the NYSE of the shares of Keane Common Stock to be issued pursuant to the Merger Agreement, the expiration or earlier termination of any applicable waiting period, and the receipt of approvals under, U.S. antitrust and competition laws, the absence of governmental restraints or prohibitions preventing the consummation of the merger, the effectiveness of this registration statement on Form S-4 registering the Keane Common Stock issuable pursuant to the Merger Agreement and the absence of any stop order or proceedings by the SEC with respect thereto. The obligation of each of C&J and Keane to consummate the merger is also conditioned on, among other things, the receipt by such party of a written opinion from such party’s counsel (or if such party’s counsel is unable to deliver such opinion such other party’s outside legal counsel may provide such opinion), to the effect that for U.S. federal income tax purposes the Integrated Mergers will qualify as a “reorganization” within the meaning of Section 368(a) of the Code, the absence of a material adverse effect on the other party, the truth and correctness of the representations and warranties made by the other party on the date of the Merger Agreement and on the closing date (subject to certain materiality qualifiers), and the performance by the other party in all material respects of its obligations under the Merger Agreement. No assurance can be given that the required stockholder, governmental and regulatory consents and approvals will be obtained or that the required conditions to closing will be satisfied, and, if all required consents and approvals are obtained and the conditions are satisfied, no assurance can be given as to the terms, conditions and timing of such consents and approvals. Any delay in completing the merger could cause the Combined Company not to realize, or to be delayed in realizing, some or all of the benefits that C&J and Keane expect to achieve if the merger is successfully completed within its expected time frame. For a more complete summary of the conditions that must be satisfied or waived prior to completion of the merger, please see “The Merger Agreement—Conditions to the Completion of the Merger.”

C&J and Keane must obtain certain regulatory approvals and clearances to consummate the merger, which, if delayed, not granted or granted with unacceptable conditions, could prevent, substantially delay or impair consummation of the merger, result in additional expenditures of money and resources or reduce the anticipated benefits of the merger.

The completion of the merger is subject to the receipt of antitrust clearance in the United States.

Under the HSR Act, the merger may not be completed until Notification and Report Forms have been filed with the FTC and the DOJ and the applicable waiting period has expired or been terminated. A transaction requiring notification under the HSR Act may not be completed until the expiration of a 30-calendar-day waiting period following the parties’ filing of their respective HSR Act notifications or the early termination of that waiting period. If the FTC or DOJ issues a Second Request prior to the expiration of the initial waiting period,

 

38


Table of Contents

the parties must observe a second 30-day waiting period, which would begin to run only after both parties have substantially complied with the Second Request, unless the waiting period is terminated earlier or the parties otherwise agree to extend the waiting period. C&J and Keane each filed an HSR Act notification with the FTC and the DOJ on June 28, 2019 and on July 18, 2019, early termination of the HSR Act waiting period was granted.

At any time before or after consummation of the merger, notwithstanding the expiration or termination of the applicable waiting period under the HSR Act, the DOJ or the FTC, or any state, could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the completion of the merger, seeking divestiture of substantial assets of the parties or requiring the parties to license, or hold separate, assets or terminate existing relationships and contractual rights. At any time before or after the completion of the merger, and notwithstanding the expiration or termination of the applicable waiting period under the HSR Act, any state could take such action under the antitrust laws as it deems necessary or desirable in the public interest. Such action could include seeking to enjoin the completion of the merger or seeking divestiture of substantial assets of the parties. Private parties may also seek to take legal action under the antitrust laws under certain circumstances.

Failure to attract, motivate and retain executives and other key employees could diminish the anticipated benefits of the merger.

The success of the merger will depend in part on the retention of personnel critical to the business and operations of the Combined Company due to, for example, their technical skills or management expertise. Competition for qualified personnel can be intense.

Current and prospective employees of C&J and Keane may experience uncertainty about their future role with C&J, Keane or the Combined Company until strategies with regard to these employees are announced or executed, which may impair C&J’s and Keane’s ability to attract, retain and motivate key management, sales, marketing, technical and field personnel, including, but not limited to, mechanics, frac equipment operators and fleet drivers, prior to and following the merger. Employee retention may be particularly challenging during the pendency of the merger, as employees of C&J and Keane may experience uncertainty about their future roles with the Combined Company. If C&J and Keane are unable to retain personnel, including C&J’s and Keane’s key management, who are critical to the successful integration and future operations of the companies, C&J and Keane could face disruptions in their operations, loss of existing customers or loss of sales to existing customers, loss of key information, expertise or know-how, and unanticipated additional recruitment and training costs. In addition, the loss of key personnel could diminish the anticipated benefits of the merger.

If key employees of C&J or Keane depart, the integration of the companies may be more difficult and the Combined Company’s business following the merger may be harmed. Furthermore, the Combined Company may have to incur significant costs in identifying, hiring and retaining replacements for departing employees and may lose significant expertise and talent relating to the business of each of C&J and Keane, and the Combined Company’s ability to realize the anticipated benefits of the merger may be adversely affected. In addition, there could be disruptions to or distractions for the workforce and management associated with integrating employees into the Combined Company. No assurance can be given that the Combined Company will be able to attract or retain key employees of C&J and Keane to the same extent that those companies have been able to attract or retain their own employees in the past.

The merger, and uncertainty regarding the merger, may cause customers or suppliers to delay or defer decisions concerning C&J and Keane and adversely affect each company’s ability to effectively manage their respective businesses.

The merger will happen only if the stated conditions are met, including approval of the C&J Merger Proposal and Keane Share Issuance Proposal and the receipt of regulatory approvals, among other conditions. Many of the conditions are outside the control of C&J and Keane, and both parties also have certain rights to

 

39


Table of Contents

terminate the Merger Agreement. Accordingly, there may be uncertainty regarding the completion of the merger. This uncertainty may cause customers, suppliers, vendors, or others that deal with C&J or Keane to delay or defer entering into contracts with C&J or Keane or making other decisions concerning C&J or Keane or seek to change or cancel existing business relationships with C&J or Keane, which could negatively affect their respective businesses. Any delay or deferral of those decisions or changes in existing agreements could have an adverse impact on the respective businesses of C&J and Keane, regardless of whether the merger is ultimately completed.

The opinions rendered to C&J and Keane from their respective financial advisors will not reflect changes in circumstances between the dates of such opinions and the completion of the merger.

On June 16, 2019, at a meeting of the C&J Board, Morgan Stanley rendered its oral opinion, subsequently confirmed by delivery of a written opinion, dated June 16, 2019, that, as of that date and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in the written opinion, taking into account the payment of the Pre-closing Cash Dividend, the Exchange Ratio pursuant to the Merger Agreement was fair, from a financial point of view, to the holders of shares of C&J Common Stock (other than holders of C&J Excluded Shares). Citi delivered its oral opinion to the Keane Board on June 16, 2019, which opinion was subsequently confirmed in a written opinion dated as of June 16, 2019, that as of such date and based upon and subject to the various assumptions made, including the Pre-closing Cash Dividend, procedures followed, matters considered, and qualifications and limitations on the scope of the review undertaken by Citi as set forth in the written opinion and taking into account the Pre-closing Cash Dividend, the Exchange Ratio pursuant to the Merger Agreement was fair, from a financial point of view, to Keane. Lazard delivered its oral opinion to the Keane Special Committee on June 16, 2019, which opinion was subsequently confirmed in a written opinion dated as of June 16, 2019, that as of such date and based upon and subject to the various assumptions made, including the Pre-closing Cash Dividend, procedures followed, matters considered, and qualifications and limitations on the scope of the review undertaken by Lazard as set forth in the written opinion, the Exchange Ratio was fair, from a financial point of view, to Keane.

Neither C&J, Keane, nor the Keane Special Committee has obtained, nor will obtain, an updated opinion regarding the fairness, from a financial point of view, of the Exchange Ratio as of the date of this joint proxy statement/prospectus or prior to the completion of the merger from Morgan Stanley, from Citi or from Lazard. Neither Morgan Stanley, Citi nor Lazard assumed any obligation to update, revise or reaffirm their respective opinions. Each of Morgan Stanley’s opinion, Citi’s opinion and Lazard’s opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Morgan Stanley, Citi and Lazard, as applicable, only as of the dates of the respective opinions of Morgan Stanley, Citi and Lazard and does not address the fairness of the Exchange Ratio, from a financial point of view, at the time the merger is completed. Changes in the operations and prospects of C&J or Keane, general economic, monetary, market and other conditions and other factors that may be beyond the control of C&J and Keane, and on which the opinion of Morgan Stanley, the opinion of Citi and the opinion of Lazard was based, may alter the value of C&J or Keane or the prices of shares of C&J Common Stock or Keane Common Stock by the time the merger is completed. The opinions of Morgan Stanley, Citi and Lazard do not speak as of any date other than the respective dates of such opinions. For a description of the opinions that C&J, Keane and the Keane Special Committee received from their respective financial advisors, please see “The Merger—Opinion of C&J’s Financial Advisor,” “The Merger—Opinion of Keane’s Financial Advisor” and “The Merger—Opinion of the Keane Special Committee’s Financial Advisor.”

Whether or not the merger is completed, the announcement and pendency of the merger could cause disruptions in the businesses of C&J and Keane, which could have an adverse effect on their respective businesses and financial results.

Whether or not the merger is completed, the announcement and pendency of the merger could cause disruptions in the businesses of C&J and Keane including the possibility that current and prospective employees

 

40


Table of Contents

of C&J and Keane will experience uncertainty about their future roles with the Combined Company, which might adversely affect C&J’s or Keane’s abilities to retain key managers and other employees and the attention of management of each of C&J and Keane may be directed toward the completion of the merger.

In addition, C&J and Keane have each diverted significant management resources in an effort to complete the merger and are each subject to restrictions contained in the Merger Agreement on the conduct of their respective businesses. If the merger is not completed, C&J and Keane will have incurred significant costs, including the diversion of management resources, for which they will have received little or no benefit.

The directors and executive officers of C&J and Keane have interests and arrangements that may be different from, or in addition to, those of C&J and Keane stockholders generally.

When considering the recommendations of the C&J Board or Keane Board, as applicable, with respect to the proposals described in this joint proxy statement/prospectus, stockholders should be aware that the directors and executive officers of each of C&J and Keane have interests in the merger that are different from, or in addition to, those of C&J stockholders and Keane stockholders generally. These interests include the continued employment of certain executive officers of C&J and Keane by the Combined Company, the continued service of certain directors of C&J and Keane as directors of the Combined Company, the treatment in the merger of outstanding equity, equity-based and incentive awards, severance arrangements, other compensation and benefit arrangements, and the right to continued indemnification of former C&J and Keane directors and officers by the Combined Company.

C&J stockholders and Keane stockholders should be aware of these interests when they consider the recommendations of the C&J Board and the Keane Board, respectively, that they vote to adopt the C&J Merger Proposal, in the case of C&J, or that they adopt the Keane Share Issuance Proposal, in the case of Keane. The C&J Board was aware of these interests when it approved and declared advisable the Merger Agreement, the merger and the transactions contemplated thereby on the terms and subject to the conditions set forth in the Merger Agreement, determined that the Merger Agreement, the merger and the transactions contemplated by the Merger Agreement were fair to, and in the best interests of, C&J and C&J stockholders and recommended that C&J stockholders approve the C&J Merger Proposal. The interests of C&J directors and executive officers are described in more detail in “The Merger—Interests of C&J’s Directors and Executive Officers in the Merger.” The Keane Board and the Keane Special Committee were aware of these interests when they approved and declared advisable the Merger Agreement and the transactions contemplated thereby on the terms and subject to the conditions set forth in the Merger Agreement and recommended that Keane stockholders approve the Keane Share Issuance Proposal. The interests of Keane’s directors and executive officers are described in more detail in “The Merger—Interests of Keane’s Directors and Executive Officers in the Merger.”

C&J or Keane may waive one or more of the closing conditions without re-soliciting stockholder approval.

C&J or Keane may determine to waive, in whole or part, one or more of the conditions the other party must meet prior to C&J or Keane, as the case may be, being obligated to consummate the merger. C&J and Keane currently expect to evaluate the materiality of any waiver and its effect on C&J or Keane stockholders, as applicable, in light of the facts and circumstances at the time, to determine whether any amendment of this joint proxy statement/prospectus or any re-solicitation of proxies or voting cards is required in light of such waiver. Any determination whether to waive any condition to the merger or as to re-soliciting stockholder approval or amending this joint proxy statement/prospectus as a result of a waiver will be made by C&J or Keane, as applicable, at the time of such waiver based on the facts and circumstances as they exist at that time.

C&J stockholders and Keane stockholders will not be entitled to appraisal rights in the merger.

Appraisal rights are statutory rights that, if applicable under law, enable stockholders of a corporation to dissent from an extraordinary transaction, such as a merger, and to demand that such corporation pay the fair

 

41


Table of Contents

value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to such stockholders in connection with the transaction. Under the DGCL, stockholders do not have appraisal rights if the shares of stock they hold are either listed on a national securities exchange or held of record by more than 2,000 holders. Notwithstanding the foregoing, appraisal rights are available if stockholders are required by the terms of the Merger Agreement to accept for their shares anything other than (i) shares of stock of the Combined Company, (ii) shares of stock of another corporation that will either be listed on a national securities exchange or held of record by more than 2,000 holders, (iii) cash in lieu of fractional shares or (iv) any combination of the foregoing.

Because the merger is of C&J with and into Keane and holders of Keane Common Stock will continue to hold their shares following completion of the merger, holders of Keane Common Stock are not entitled to appraisal rights in the merger.

Because shares of Keane Common Stock are listed on the NYSE, a national securities exchange, and because C&J stockholders are not required by the terms of the Merger Agreement to accept for their shares anything other than shares of Keane Common Stock and cash in lieu of fractional shares, holders of C&J Common Stock will not be entitled to appraisal rights in the merger.

There are various provisions of the Merger Agreement and related documents that restrict the ability of either party to seek alternative transactions or to terminate the merger.

The Merger Agreement contains “no shop” provisions that restrict each of C&J’s and Keane’s ability to, among other things, identify or pursue alternate Acquisition Proposals, as described in “The Merger Agreement—Covenants—No Solicitation of Acquisition Proposals.” There are only limited circumstances under which the Merger Agreement would permit the C&J Board or the Keane Board to withhold, withdraw, qualify or modify the C&J recommendation or the Keane recommendation, as applicable (each as defined in “The Merger Agreement—Representations and Warranties”). The Merger Agreement also provides that in certain circumstances, either party may owe the other a termination fee of $30 million if the Merger Agreement is terminated, as more fully described in “The Merger Agreement—Termination of the Merger Agreement.”

In addition, the Support Agreement includes covenants that, with limited exceptions, require Keane Investor (which owns approximately 49.2% of the outstanding shares of Keane Common Stock) to vote its shares in favor of the Keane Share Issuance Proposal and against actions that may impair or impede the transactions contemplated by the Merger Agreement. For specific details, please see “The Merger Agreement—Support Agreement.”

These provisions could discourage a potential competing acquirer from considering or proposing an acquisition or merger, even if it were prepared to pay consideration with a higher value than that implied by the Exchange Ratio, or might result in a potential competing acquirer proposing to pay a lower per share price than it might otherwise have proposed to pay because of the added expense of the termination fee. Additionally, a potential competing acquirer may be discouraged from considering or proposing an acquisition or merger because neither C&J nor Keane is under any obligation to terminate the Merger Agreement in order to accept a Superior Proposal.

Each of C&J and Keane will incur significant transaction, merger-related and restructuring costs in connection with the merger.

C&J and Keane have incurred and expect to incur a number of non-recurring costs associated with combining the operations of the two companies, as well as transaction fees and other costs related to the merger. These costs and expenses include fees paid to financial, legal and accounting advisors, facilities and systems consolidation costs, severance and other potential employment-related costs, including retention and severance payments that may be made to certain C&J employees and Keane employees, filing fees, printing expenses and

 

42


Table of Contents

other related charges. Some of these costs are payable by C&J or Keane regardless of whether the merger is completed.

The Combined Company will also incur costs, including, but not limited to, restructuring and integration costs, in connection with the merger. The costs related to restructuring will be expensed as a cost of the ongoing results of operations of either C&J or Keane or the Combined Company. There are a large number of processes, policies, procedures, operations, technologies and systems that must be integrated in connection with the merger and the integration of the two companies’ businesses. Although C&J and Keane expect that the elimination of duplicative costs, strategic benefits, additional income as well as the realization of other efficiencies related to the integration of the businesses, may offset incremental transaction, merger-related and restructuring costs over time, any net benefit may not be achieved in the near term or at all. Many of these costs will be borne by C&J or Keane even if the merger is not completed. While both C&J and Keane have assumed that certain expenses would be incurred in connection with the merger and the other transactions contemplated by the Merger Agreement, there are many factors beyond their control that could affect the total amount or the timing of the integration and implementation expenses.

C&J and Keane may be targets of securities class action and derivative lawsuits which could result in substantial costs and may delay or prevent the merger from being completed.

Securities class action lawsuits and derivative lawsuits are often brought against companies that have entered into merger agreements. Defending against these claims can result in substantial costs and divert management time and resources, even if the lawsuits are without merit. An adverse judgment could result in monetary damages, which could have a negative impact on C&J’s and Keane’s respective businesses, results of operations and financial condition. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting completion of the merger, the injunction may delay or prevent the merger from being completed, which may adversely affect C&J’s and Keane’s respective businesses, results of operations and financial condition.

Litigation filed against C&J, the members of the C&J Board, Keane, the members of the Keane Board and Merger Sub could prevent or delay the consummation of the merger or result in the payment of damages following completion of the merger.

In connection with the merger, a purported stockholder of C&J filed a putative federal class action complaint on behalf of himself and all owners of C&J Common Stock (other than defendants and related or affiliated persons) against C&J and the members of the C&J Board and two purported stockholders of C&J filed two putative federal class action complaints on behalf of themselves and all owners of C&J Common Stock (other than defendants and related or affiliated persons) against C&J, the members of the C&J Board, Keane and Merger Sub, a purported stockholder of Keane filed a putative federal class action complaint on behalf of himself and all owners of Keane Common Stock (other than defendants and related or affiliated persons) against Keane and the members of the Keane Board, and a purported stockholder of Keane filed a putative class action complaint in Delaware Chancery Court on behalf of himself and all owners of Keane Common Stock (other than defendants and related or affiliated persons) against the members of the Keane Board. Among other remedies, the plaintiffs in the federal lawsuits seek to enjoin the parties from taking any steps to consummate the merger, damages and costs. The outcome of any such litigation is uncertain. If a dismissal is not granted or a settlement is not reached, these lawsuits could prevent or delay completion of the merger and result in substantial costs to C&J and Keane, including any costs associated with indemnification. Additional lawsuits in connection with the merger may be filed against C&J, Keane and/or their respective directors and officers, which additional lawsuits could also prevent or delay the consummation of the merger and result in additional costs to C&J and Keane. The ultimate resolution of these lawsuits cannot be predicted with certainty, and an adverse ruling in any such lawsuit may cause the merger to be delayed or not to be completed, which could cause C&J and Keane not to realize some or all of the anticipated benefits of the merger. The defense or settlement of any lawsuit or claim that remains unresolved at the time the merger is consummated may adversely affect the combined company’s business, financial condition, results of operations and cash flows. C&J and Keane cannot currently predict the outcome of or reasonably estimate the possible loss or range of loss from any these lawsuits or claims. See “The Merger—Litigation Related to the Merger.”

 

43


Table of Contents

Risks Relating to the Combined Company

The Combined Company may not be able to retain customers or suppliers or customers or suppliers may seek to modify contractual obligations with the Combined Company, which could have an adverse effect on the Combined Company’s business and operations. Third parties may terminate or alter existing contracts or relationships with C&J or Keane.

As a result of the merger, the Combined Company may experience impacts on relationships with customers and suppliers that may harm the Combined Company’s business and results of operations. Certain customers or suppliers may seek to terminate or modify contractual obligations following the merger whether or not contractual rights are triggered as a result of the merger. There can be no guarantee that customers and suppliers will remain with or continue to have a relationship with the Combined Company or do so on the same or similar contractual terms following the merger. If any customers or suppliers seek to terminate or modify contractual obligations or discontinue the relationship with the Combined Company, then the Combined Company’s business and results of operations may be harmed. Furthermore, the Combined Company will not have long-term arrangements with many of its significant suppliers. If the Combined Company’s suppliers were to seek to terminate or modify an arrangement with the Combined Company, then the Combined Company may be unable to procure necessary supplies from other suppliers in a timely and efficient manner and on acceptable terms, or at all.

C&J and Keane also have contracts with vendors, landlords, licensors and other business partners which may require C&J or Keane, as applicable, to obtain consent from these other parties in connection with the merger. If these consents cannot be obtained, the Combined Company may suffer a loss of potential future revenue, incur costs, and lose rights that may be material to the business of the Combined Company. In addition, third parties with whom C&J or Keane currently have relationships may terminate or otherwise reduce the scope of their relationship with either party in anticipation of the merger. Any such disruptions could limit the Combined Company’s ability to achieve the anticipated benefits of the merger. The adverse effect of any such disruptions could also be exacerbated by a delay in the completion of the merger or by a termination of the Merger Agreement.

Combining the businesses of C&J and Keane may be more difficult, costly or time-consuming than expected and the Combined Company may fail to realize the anticipated benefits of the merger, which may adversely affect the Combined Company’s business results and negatively affect the value of Combined Company Common Stock following the merger.

The success of the merger will depend on, among other things, the ability of C&J and Keane to combine their businesses in a manner that realizes cost savings and facilitates growth opportunities. C&J and Keane have entered into the Merger Agreement because each believes that the merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of its respective stockholders and that combining the businesses of C&J and Keane will produce cost savings and other benefits. Please also see “The Merger—Recommendation of the C&J Board and Reasons for the Merger” and “The Merger—Recommendation of the Keane Board and Reasons for the Merger.”

However, C&J and Keane must successfully combine their respective businesses in a manner that permits these benefits to be realized. In addition, the Combined Company must achieve the cost savings and anticipated growth without adversely affecting current revenues and investments in future growth. If the Combined Company is not able to successfully achieve these objectives, the anticipated benefits of the merger may not be realized fully, or at all, or may take longer to realize than expected.

An inability to realize the full extent of the anticipated benefits of the merger and the other transactions contemplated by the Merger Agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, level of expenses and operating results of the Combined Company, which may adversely affect the value of Combined Company Common Stock after the completion of the merger.

 

44


Table of Contents

In addition, the actual integration may result in additional and unforeseen expenses and may cost more than anticipated, and the anticipated benefits of the integration plan may not be realized. Actual cost savings, if achieved, may be lower than what C&J and Keane expect and may take longer to achieve than anticipated. If C&J and Keane are not able to adequately address integration challenges, they may be unable to successfully integrate their operations or realize the anticipated benefits of the integration of the two companies.

Because Keane Investor will control approximately 24.6% of Combined Company Common Stock at the effective time, Keane Investor may have the ability to influence major corporate decisions of the Combined Company.

As of the date of this joint proxy statement/prospectus, Keane Investor beneficially owns approximately 49.2% of the outstanding shares of Keane. At the effective time, C&J and Keane estimate that Keane Investor will beneficially own approximately 24.6% of the Combined Company Common Stock. Accordingly, Keane Investor may have the ability to influence matters requiring approval by the Combined Company Board or a stockholder vote, such as the election of directors or the approval of significant transactions. Keane Investor may have interests that differ from the interests of other current C&J stockholders or other current Keane stockholders. The concentration of ownership and voting power in Keane Investor may have the effect of delaying, preventing or deterring significant transactions with respect to the Combined Company and may affect the market price of Combined Company Common Stock.

However, the Support Agreement places restrictions on the ability of Keane Investor and Cerberus to, among other things, acquire, offer to acquire, or agree to acquire, by purchase, or otherwise, beneficial ownership (as defined in Rule 13d-3 of the Exchange Act) of, or rights to acquire, (i) any shares of Keane Common Stock, (ii) any option, warrant, convertible security, stock appreciation right or other right to acquire such ownership, including through any swap agreement or other security, contract right or derivative position, whether or not presently exercisable, that is exercisable for, converts into or has a settlement payment or mechanism or is priced by reference to or in relation to the value of Keane or shares of Keane Common Stock or (iii) any material assets of Keane (other than as part of an authorized sale process) or any securities or material assets of any subsidiary of Keane; provided, however, that notwithstanding the foregoing, Keane Investor and Cerberus and each of their controlled affiliates may acquire beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of Keane Common Stock provided that such beneficial ownership does not result in ownership of 30% or more of the issued and outstanding shares of Keane Common Stock in the aggregate following such transaction (assuming any stock buy-back transaction announced but not yet consummated by Keane has been consummated as of the time of such acquisition). For a more complete discussion of the Support Agreement, please see “The Merger Agreement—Support Agreement.”

Following the expiration of the Support Agreement lock-up period, Keane Investor and Cerberus will be permitted to sell their holdings in the Combined Company.

Pursuant to the Support Agreement, Keane Investor and Cerberus have agreed that, subject to certain exceptions, during the period commencing at the effective time and continuing for forty-five days thereafter, each of Keane Investor and Cerberus shall not sell, transfer, assign, pledge, encumber or otherwise dispose of, directly or indirectly, the shares of Keane Common Stock or any other securities convertible into or exchangeable for Keane Common Stock (including derivative securities), without the prior written consent of the Combined Company Board (which consent shall require the unanimous approval of the C&J Designees). Following such time period, Keane Investor and Cerberus will no longer be subject to such restriction and may decide to sell any or all of their shares of Keane Common Stock.

The failure to successfully integrate the businesses and operations of C&J and Keane in the expected time frame may adversely affect the Combined Company’s future results.

C&J and Keane have operated and, until the completion of the merger, will continue to operate independently. There can be no assurances that their businesses can be integrated successfully. It is possible that

 

45


Table of Contents

the integration process could result in the loss of key C&J employees or key Keane employees, the loss of customers, the disruption of either company’s or both companies’ ongoing businesses, inconsistencies in standards, controls, procedures and policies, unexpected integration issues, higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated. Specifically, the following issues, among others, must be addressed in integrating the operations of C&J and Keane in order to realize the anticipated benefits of the merger so the Combined Company performs as expected:

 

   

combining the companies’ operations and corporate functions;

 

   

combining the businesses of C&J and Keane, in a manner that permits the Combined Company to achieve any cost savings or revenue synergies anticipated to result from the merger, including, specifically, achieving the anticipated annualized run-rate cost synergies of $100 million within 12 months after closing, the failure of which would result in the anticipated benefits of the merger not being realized in the time frame currently anticipated or at all;

 

   

reducing additional and unforeseen expenses such that integration costs more than anticipated;

 

   

avoiding delays or regulatory conditions in connection with the merger or the integration process;

 

   

integrating personnel from the two companies and minimizing the loss of key employees;

 

   

integrating the companies’ technologies;

 

   

integrating and unifying the offerings and services available to customers;

 

   

identifying and eliminating redundant and underperforming functions and assets;

 

   

harmonizing the companies’ operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes;

 

   

maintaining existing agreements with customers, distributors, providers and vendors and avoiding delays in entering into new agreements with prospective customers, distributors, providers and vendors;

 

   

addressing possible differences in business backgrounds, corporate cultures and management philosophies;

 

   

consolidating the companies’ administrative and information technology infrastructure;

 

   

coordinating distribution and marketing efforts;

 

   

managing the movement of certain positions to different locations; and

 

   

effecting actions that may be required in connection with obtaining regulatory approvals.

In addition, at times the attention of certain members of either company’s or both companies’ management and resources may be focused on completion of the merger and the integration of the businesses of the two companies and diverted from day-to-day business operations or other opportunities that may have been beneficial to such company, which may disrupt each company’s ongoing business and the business of the Combined Company.

Furthermore, the Combined Company Board and executive leadership of the Combined Company will consist of former directors and executive officers from each of C&J and Keane. Combining the boards of directors and management teams of each company into a single board and a single management team could require the reconciliation of differing priorities and philosophies.

The C&J and Keane unaudited prospective financial information is inherently subject to uncertainties, the unaudited pro forma financial data included in this document is preliminary and the Combined Company’s actual financial position and results of operations after the merger may differ materially from these estimates and the unaudited pro forma financial data included in this joint proxy statement/prospectus. The unaudited pro forma combined financial data does not reflect the effect of any divestitures that may be required in connection with the merger.

The unaudited pro forma condensed combined financial statements and unaudited comparative pro forma per share information included in this joint proxy statement/prospectus are presented for illustrative purposes

 

46


Table of Contents

only, contain a variety of adjustments, assumptions and preliminary estimates and are not necessarily indicative of what the Combined Company’s actual financial position or results of operations would have been had the merger been completed on the dates indicated. The Combined Company’s actual results and financial position after the merger may differ materially and adversely from the unaudited pro forma financial data included in this joint proxy statement/prospectus. For more information, please see “Unaudited Comparative Per Share Information” and “Unaudited Pro Forma Condensed Combined Financial Statements.”

This information was prepared solely for internal use, as of a specific date, and is subjective in many respects. While presented with numeric specificity, the C&J and Keane unaudited prospective financial information provided in this joint proxy statement/prospectus is based on numerous variables and assumptions (including, but not limited to, those related to industry performance and competition, general business, the well completion services and related industries, and economic, market and financial conditions and additional matters specific to C&J’s or Keane’s business, as applicable) that are inherently subjective and uncertain and are beyond the control of the respective management teams of C&J and Keane. As a result, actual results may differ materially from the unaudited prospective financial information. Important factors that may affect actual results and cause these unaudited projected financial forecasts to not be achieved include, but are not limited to, risks and uncertainties relating to C&J’s or Keane’s business, as applicable (including each company’s ability to deliver safe, high quality and efficient services), industry performance, general business and economic conditions. For more information Please see “The Merger—Certain C&J Unaudited Prospective Financial and Operating Information” and “The Merger—Certain Keane Unaudited Prospective Financial and Operating Information.”

The Combined Company may be unable to retain C&J and Keane personnel successfully after the merger is completed.

The success of the merger will depend in part on the Combined Company’s ability to retain the talents and dedication of the key employees currently employed by C&J and Keane. It is possible that these employees may decide not to remain with the Combined Company after the merger is consummated. If key employees terminate their employment, or if an insufficient number of employees are retained to maintain effective operations, the Combined Company’s business activities may be adversely affected and management’s attention may be diverted from successfully integrating C&J and Keane to hiring suitable replacements, all of which may cause the Combined Company’s business to suffer. In addition, C&J and Keane may not be able to locate suitable replacements for any key employees that leave either company or offer employment to potential replacements on reasonable terms.

If the existing indebtedness of Keane remains outstanding, or if Keane refinances its existing indebtedness, covenants contained in the agreements governing such indebtedness may impose restrictions on the Combined Company and certain of its subsidiaries that may affect their ability to operate their businesses.

The agreements that govern the indebtedness of Keane, in addition to any refinanced indebtedness, may contain various affirmative and negative covenants. Such covenants may, subject to certain significant exceptions, restrict the ability of the Combined Company and certain of its subsidiaries to, among other things, incur liens, incur debt, engage in mergers, consolidations and acquisitions, transfer assets outside the ordinary course of business, make loans or other investments, pay dividends, repurchase equity interests, make other payments with respect to equity interests, repay or repurchase subordinated debt and engage in affiliate transactions. In addition, the agreements governing the existing indebtedness of Keane contain financial covenants that would require the Combined Company to maintain certain financial ratios under certain circumstances. The ability of the Combined Company and its subsidiaries to comply with these provisions may be affected by events beyond their control. Failure to comply with these covenants could result in an event of default, which, if not cured or waived, could accelerate the Combined Company’s repayment obligations.

 

47


Table of Contents

Declaration, payment and amounts of dividends, if any, distributed to stockholders of the Combined Company will be uncertain.

Whether any dividends are declared or paid to stockholders of the Combined Company following the merger, and the amounts of any such dividends that are declared or paid, are uncertain and depend on a number of factors. Keane has not paid any dividends to its stockholders. The C&J Board has declared, subject to the C&J Board making a determination that surplus exists under Delaware law, the Pre-closing Cash Dividend which, if the C&J Board determines that C&J has sufficient surplus to pay, C&J expects will be paid prior to the effective time to the holders of record of C&J Common Stock as of the record date for such dividend. If dividends are paid to stockholders of the Combined Company, they may not be of the same amount as paid by C&J to its respective stockholders prior to the effective time of the merger. The Combined Company Board will have the discretion to determine the dividend policy of the Combined Company, which may be impacted by any of the following factors:

 

   

the Combined Company may not have enough cash to pay such dividends or to repurchase shares due to its cash requirements, capital spending plans, cash flow or financial position;

 

   

decisions on whether, when and in which amounts to make any future distributions will remain at all times entirely at the discretion of the Combined Company Board, which could change its dividend practices at any time and for any reason;

 

   

the Combined Company’s desire to maintain or improve the credit ratings on its debt;

 

   

the amount of dividends that the Combined Company may distribute to its stockholders is subject to restrictions under Delaware law and is limited by restricted payment and leverage covenants in the Combined Company’s credit facilities and indentures and, potentially, the terms of any future indebtedness that the Combined Company may incur; and

 

   

certain limitations on the amount of dividends subsidiaries of the Combined Company can distribute to the Combined Company, as imposed by state law, regulators or agreements.

Stockholders should be aware that they have no contractual or other legal right to dividends that have not been declared.

Risks Relating to C&J’s Business

C&J’s business will continue to be subject to the risks described in “Risk Factors” in C&J’s Annual Report on Form 10-K for the year ended December 31, 2018, C&J’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 and in other documents incorporated by reference into this joint proxy statement/prospectus. Please see “Where You Can Find More Information” for the location of information incorporated by reference into this joint proxy statement/prospectus.

Risks Relating to Keane’s Business

Keane’s business will continue to be subject to the risks described in “Risk Factors” in Keane’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, Keane’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 and in other documents incorporated by reference into this joint proxy statement/prospectus. Please see “Where You Can Find More Information” for the location of information incorporated by reference into this joint proxy statement/prospectus.

 

48


Table of Contents

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This joint proxy statement/prospectus and the documents to which C&J and Keane refer you to in this joint proxy statement/prospectus, as well as oral statements made or to be made by C&J and Keane, include certain “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 27A of the Securities Act, Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995, which are referred to as the safe harbor provisions with respect to the businesses, strategies and plans of C&J and Keane, their expectations relating to the merger and their future financial condition and performance. Statements included in or incorporated by reference into this joint proxy statement/prospectus that are not historical facts are forward-looking statements, including statements about the beliefs and expectations of the management of each of C&J and Keane. Words such as “believe,” “continue,” “could,” “expect,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “should,” “may,” “will,” “would” or the negative thereof and similar expressions are intended to identify such forward-looking statements that are intended to be covered by the safe harbor provisions. C&J and Keane caution investors that any forward-looking statements are subject to known and unknown risks and uncertainties, many of which are outside C&J’s and Keane’s control, and which may cause actual results and future trends to differ materially from those matters expressed in, or implied or projected by, such forward-looking statements, which speak only as of the date of this joint proxy statement/prospectus. Investors are cautioned not to place undue reliance on these forward-looking statements. Among the risks and uncertainties that could cause actual results to differ from those described in forward-looking statements are the following:

 

   

the occurrence of any change, event, series of events or circumstances that could give rise to the termination of the Merger Agreement, including a termination of the Merger Agreement under circumstances that could require C&J or Keane to pay to the other party a termination fee or reimburse certain of the other party’s expenses;

 

   

uncertainties related to the timing of the receipt of required regulatory approvals for the merger and the possibility that C&J and Keane may be required to accept conditions that could reduce or eliminate the anticipated benefits of the merger as a condition to obtaining regulatory approvals or that the required regulatory approvals might not be obtained at all;

 

   

the stock price for C&J Common Stock and Keane Common Stock could change before the completion of the merger, including as a result of uncertainty as to the long-term value of Combined Company Common Stock following the merger or as a result of broader stock market movements;

 

   

the inability to complete the merger due to the failure, or unexpected delays, of C&J stockholders to adopt the Merger Agreement or of Keane stockholders to approve the issuance of shares pursuant to the Merger Agreement, or the failure to satisfy other conditions to the completion of the merger;

 

   

delays in closing, or the failure to close, the merger for any reason could negatively impact C&J or Keane;

 

   

risks that the merger and the other transactions contemplated by the Merger Agreement disrupt current plans and operations that may harm C&J’s or Keane’s respective businesses;

 

   

difficulties or delays in integrating the businesses of C&J and Keane following completion of the merger or fully realizing the anticipated synergies and other benefits expected from the merger;

 

   

the ability to obtain or renew customer contracts and changes in customer requirements in the markets C&J and Keane serve;

 

   

certain restrictions during the pendency of the merger that may impact the ability of C&J or Keane to pursue certain business opportunities or strategic transactions;

 

   

the outcome of any legal proceedings that have been or may be instituted against C&J, Keane and/or others relating to the merger;

 

49


Table of Contents
   

risks related to the diversion of the attention and time of the C&J or Keane management teams from ongoing business concerns;

 

   

the risk that the merger and any announcement relating to the merger could have an adverse effect on the ability of C&J or Keane to retain and hire key personnel or maintain relationships with customers, suppliers, vendors, or other third parties, standing with regulators, the U.S. government or other governments, or on C&J’s or Keane’s respective operating results and businesses generally;

 

   

the amount of any costs, fees, expenses, impairments or charges related to the merger;

 

   

the potential dilution of C&J stockholders’ and Keane stockholders’ ownership percentage of the Combined Company as a result of the merger;

 

   

the business, economic and political conditions in the countries in which C&J or Keane operate;

 

   

events beyond C&J’s and Keane’s control, such as acts of terrorism; and

 

   

the potential dilution of the Combined Company’s earnings per share as a result of the merger.

For further discussion of these and other risks, contingencies and uncertainties applicable to C&J and Keane, please see “Risk Factors” and in C&J’s and Keane’s other filings with the SEC incorporated by reference into this joint proxy statement/prospectus. Please also see “Where You Can Find More Information” for more information about the SEC filings incorporated by reference into this joint proxy statement/prospectus.

All subsequent written or oral forward-looking statements attributable to C&J or Keane or any person acting on its or their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Neither C&J nor Keane is under any obligation, and each expressly disclaims any obligation, to update, alter, or otherwise revise any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise, except as may be required by law.

 

50


Table of Contents

THE PARTIES TO THE MERGER

C&J Energy Services, Inc.

3990 Rogerdale Rd.

Houston, TX 77042

Telephone: (713) 325-6000

C&J is a leading provider of well construction, intervention, completion, support and other complementary oilfield services and technologies. C&J provides its services to oil and gas exploration and production companies throughout the continental United States. C&J is a new well focused provider offering a diverse suite of services throughout the life cycle of the well, including hydraulic fracturing, cased-hole wireline and pumping, cementing, coiled tubing, rig services, fluids management and other completion and well support services.

C&J Common Stock is listed on the NYSE under the ticker symbol “CJ.”

For more information about C&J, please visit C&J’s website at www.cjenergy.com. The information contained on C&J’s website or accessible through it (other than the documents incorporated by reference herein) does not constitute a part of this joint proxy statement/prospectus or any other report or document on file with or furnished to the SEC. Additional information about C&J is included in the documents incorporated by reference into this joint proxy statement/prospectus. Please see “Where You Can Find More Information.”

Keane Group, Inc.

1800 Post Oak Boulevard, Suite 450

Houston, TX 77056

Telephone: (713) 357-9490

Keane is one of the largest pure-play providers of integrated well completion services in the U.S. with a focus on complex, technically demanding completion solutions. Keane provides its services in conjunction with onshore well development, in addition to stimulation operations on existing wells, to exploration and production customers with some of the highest quality and safety standards in the industry.

Keane Common Stock is listed on the NYSE under the ticker symbol “FRAC.”

For more information about Keane, please visit Keane’s website at www.keanegrp.com. The information contained on Keane’s website or accessible through it (other than the documents incorporated by reference herein) does not constitute a part of this joint proxy statement/prospectus or any other report or document on file with or furnished to the SEC. Additional information about Keane is included in the documents incorporated by reference into this joint proxy statement/prospectus. Please see “Where You Can Find More Information.”

King Merger Sub Corp.

1800 Post Oak Boulevard, Suite 450

Houston, TX 77056

Telephone: (713) 357-9490

Merger Sub is a wholly owned subsidiary of Keane. Merger Sub was formed by Keane solely in contemplation of the merger, has not conducted any business and has no assets, liabilities or other obligations of any nature other than as set forth in the Merger Agreement.

 

51


Table of Contents

THE C&J SPECIAL MEETING

General

This joint proxy statement/prospectus is first being provided on or about September 23, 2019 and constitutes notice of the C&J Special Meeting in conformity with the requirements of the DGCL and the bylaws of C&J (the “C&J Bylaws”).

This joint proxy statement/prospectus is being provided to C&J stockholders as part of a solicitation of proxies by the C&J Board for use at the C&J Special Meeting and at any adjournments or postponements of the C&J Special Meeting. This joint proxy statement/prospectus provides C&J stockholders with information about the C&J Special Meeting and should be read carefully in its entirety.

Date, Time and Place of the C&J Special Meeting

The C&J Special Meeting is scheduled to be held at C&J’s headquarters at 3990 Rogerdale Rd., Houston, TX 77042, on October 22, 2019, beginning at 9:30 a.m. Central Time, unless postponed to a later date.

Matters to Be Considered at the C&J Special Meeting

The C&J Special Meeting is being held to consider and vote on the following proposals, each as further described in this joint proxy statement/prospectus:

 

   

Proposal 1—the C&J Merger Proposal: to adopt the Merger Agreement, pursuant to which each outstanding share of C&J Common Stock (other than C&J Excluded Shares) will be cancelled and converted into the right to receive 1.6149 shares of Keane Common Stock;

 

   

Proposal 2—the C&J Compensation Proposal: to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to C&J’s named executive officers in connection with the merger; and

 

   

Proposal 3—the C&J Adjournment Proposal: to approve the adjournment of the C&J Special Meeting to solicit additional proxies if there are not sufficient votes at the time of the C&J Special Meeting to approve the C&J Merger Proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to C&J stockholders.

Recommendation of the C&J Board of Directors

The C&J Board unanimously recommends that C&J stockholders vote:

 

   

Proposal 1: “FOR” the C&J Merger Proposal;

 

   

Proposal 2: “FOR” the C&J Compensation Proposal; and

 

   

Proposal 3: “FOR” the C&J Adjournment Proposal.

After careful consideration, the C&J Board unanimously (i) determined that the Merger Agreement, the merger and the other transactions contemplated by the Merger Agreement are fair to, and in the best interests of, C&J and its stockholders; (ii) approved and declared advisable the Merger Agreement, the merger and the other transactions contemplated by the Merger Agreement, on the terms and conditions set forth in the Merger Agreement; (iii) directed that the Merger Agreement be submitted for adoption at a special meeting of C&J stockholders to approve its adoption; and (iv) subject to the terms and conditions of the Merger Agreement, resolved to recommend that C&J stockholders approve the adoption of the Merger Agreement.

 

52


Table of Contents

This joint proxy statement/prospectus contains important information regarding these proposals and factors that C&J stockholders should consider when deciding how to cast their votes. C&J stockholders are encouraged to read this entire document carefully, including the annexes to and the documents incorporated by reference into this document, for more detailed information regarding the Merger Agreement, the merger and the other transactions contemplated by the Merger Agreement.

Please also see “The Merger—Recommendation of the C&J Board and Reasons for the Merger.”

Attending the C&J Special Meeting

Only C&J stockholders of record at the close of business on September 18, 2019 (the record date for the C&J Special Meeting), beneficial owners as of the close of business on the record date, holders of valid proxies for the C&J Special Meeting and invited guests of C&J may attend the C&J Special Meeting.

All attendees will need to bring a form of government-issued personal identification (such as a driver’s license or passport) along with either the notice of the C&J Special Meeting or proof of stock ownership to enter the C&J Special Meeting. C&J stockholders whose shares are beneficially held in the name of a broker, bank or other nominee and who wish to be admitted to attend the C&J Special Meeting, must present proof of ownership of C&J shares, such as a bank or brokerage statement.

Please note that no cameras, recording equipment, or other similar electronic devices, signs, placards, briefcases, backpacks, large bags or packages will be permitted in the C&J Special Meeting. C&J reserves the right to deny admittance to any C&J stockholder who attempts to bring any such item into the C&J Special Meeting. Small purses are permissible, but they and any bags or packages permitted in the C&J Special Meeting room will be subject to inspection. The use of mobile phones or other communication devices, tablets and similar electronic devices during the C&J Special Meeting is prohibited, and such devices must be turned off and put away before entering the meeting room. All security procedures and instructions require strict adherence. By attending the C&J Special Meeting, C&J stockholders agree to abide by the agenda and procedures for the C&J Special Meeting, copies of which will be distributed to attendees at the C&J Special Meeting.

C&J stockholders planning to attend the C&J Special Meeting and vote in person, are encouraged to vote in advance by the Internet, telephone or mail. Such vote will not limit the right to vote at the C&J Special Meeting in person.

Record Date for the C&J Special Meeting and Voting Rights

The record date to determine who is entitled to receive notice of and to vote at the C&J Special Meeting, or any adjournments or postponements thereof, is September 18, 2019. As of the close of business on August 29, 2019, the latest practicable date prior to the date of this joint proxy statement/prospectus, there were 66,025,630 shares of C&J Common Stock issued and outstanding and entitled to vote at the C&J Special Meeting. Each C&J stockholder is entitled to one vote for any matter properly brought before the C&J Special Meeting for each share of C&J Common Stock such holder owned at the close of business on the C&J Record Date so long as such shares remain outstanding on the date of the C&J Special Meeting. Only C&J stockholders of record at the close of business on the C&J Record Date are entitled to receive notice of and to vote at the C&J Special Meeting and any and all adjournments or postponements thereof.

A complete list of registered C&J stockholders entitled to vote at the C&J Special Meeting will be available for inspection during ordinary business hours at the C&J headquarters located at 3990 Rogerdale Rd., Houston, TX 77042, for a period of at least ten days before the C&J Special Meeting and at the place of the C&J Special Meeting for the duration of the meeting.

 

53


Table of Contents

Quorum and Broker Non-Votes

A quorum of stockholders is necessary to conduct the C&J Special Meeting. The presence, in person or by proxy, of the holders of a majority of the total voting power of all outstanding securities of C&J entitled to vote at the C&J Special Meeting is necessary to constitute a quorum. Shares of C&J Common Stock represented at the C&J Special Meeting and entitled to vote, but not voted, including shares for which a stockholder directs an “abstention” from voting and broker non-votes, will be counted for purposes of determining a quorum. If a quorum is not present, the C&J Special Meeting may be postponed until the holders of the number of shares of C&J Common Stock required to constitute a quorum attend.

Under the NYSE rules, banks, brokers or other nominees who hold shares in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokers or other nominees are not allowed to exercise their voting discretion with respect to the approval of matters that the NYSE determines to be “non-routine.” Generally, a broker non-vote occurs on an item when (i) a bank, broker or other nominee has discretionary authority to vote on one or more “routine” proposals to be voted on at a meeting of stockholders, but is not permitted to vote on other “non-routine” proposals without instructions from the beneficial owner of the shares and (ii) the beneficial owner fails to provide the bank, broker or other nominee with such instructions. Under the NYSE rules, “non-routine” matters include the C&J Merger Proposal, the C&J Compensation Proposal and the C&J Adjournment Proposal. Because none of the proposals to be voted on at the C&J Special Meeting are routine matters for which brokers may have discretionary authority to vote, C&J does not expect any broker non-votes at the C&J Special Meeting. As a result, C&J stockholders holding their shares of C&J Common Stock in “street name” will not be represented and their shares will not be voted on any matter unless such C&J stockholders provide instructions to the broker, bank, trustee or other nominee that holds their shares of record as to how to vote their shares. The NYSE rules governing brokers’ discretionary authority will not permit brokers to exercise discretionary authority regarding any of the proposals to be voted on at the C&J Special Meeting.

Vote Required

The votes required for each proposal are as follows:

 

   

Proposal 1—the C&J Merger Proposal. The affirmative vote of the holders of a majority of the issued and outstanding shares of C&J Common Stock entitled to vote on the C&J Merger Proposal is required to adopt the C&J Merger Proposal. The failure of any C&J stockholder to submit a vote (e.g., by not submitting a proxy or not voting in person) and any abstention by a C&J stockholder will have the same effect as a vote “against” the C&J Merger Proposal. Because the C&J Merger Proposal is non-routine, brokers, banks and other nominees do not have discretionary authority to vote on the C&J Merger Proposal and will not be able to vote on the C&J Merger Proposal absent instructions from the beneficial owner.

 

   

Proposal 2—the C&J Compensation Proposal. The affirmative vote of a majority of votes cast by C&J stockholders entitled to vote thereon and present in person or represented by proxy at the C&J Special Meeting is required to approve the advisory compensation proposal. Accordingly, a C&J stockholder’s abstention from voting, a broker non-vote or the failure of a C&J stockholder to vote (including the failure of a C&J stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have no effect on the outcome of the C&J Compensation Proposal. While the C&J Board intends to consider the vote resulting from this proposal, the vote is advisory only and therefore not binding on C&J or Keane, and, if the merger with Keane is approved by C&J stockholders and consummated, the compensation will be payable even if the C&J Compensation Proposal is not approved.

 

   

Proposal 3—the C&J Adjournment Proposal. The affirmative vote of a majority of votes cast by C&J stockholders entitled to vote thereon and present in person or represented by proxy at the C&J Special

 

54


Table of Contents
 

Meeting is required to approve the C&J Adjournment Proposal. Accordingly, a C&J stockholder’s abstention from voting, a broker non-vote or the failure of a C&J stockholder to vote (including the failure of a C&J stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have no effect on the outcome of the C&J Adjournment Proposal. Because the C&J Adjournment Proposal is non-routine, brokers, banks and other nominees do not have discretionary authority to vote on the C&J Adjournment Proposal, and will not be able to vote on the C&J Adjournment Proposal absent instructions from the beneficial owner.

As of August 29, 2019, the latest practicable date prior to the date of this joint proxy statement/prospectus, C&J directors and executive officers and their affiliates, as a group, owned and were entitled to vote 823,518 shares of C&J Common Stock, or approximately 1.25% of the total outstanding shares of C&J Common Stock. Although none of them has entered into any agreement obligating them to do so, C&J currently expects that all of its directors and executive officers will vote their shares “FOR” the C&J Merger Proposal, “FOR” the C&J Compensation Proposal and “FOR” the C&J Adjournment Proposal. Please also see “The Merger—Interests of C&J’s Directors And Executive Officers In The Merger” and the arrangements described in Part III of C&J’s Annual Report on Form 10-K for the year ended December 31, 2018 and C&J’s Definitive Proxy Statement on Schedule 14A for C&J’s annual meeting filed with the SEC on April 9, 2019, both of which are incorporated into this joint proxy statement/prospectus by reference.

If shares are held in the name of a broker, bank or other nominee, the beneficial owner of such shares will receive separate instructions from his or her broker, bank or other nominee describing how to vote such shares.

Methods of Voting

C&J stockholders of record as of the close of business on the C&J Record Date may have their shares voted by submitting a proxy or may vote in person at the C&J Special Meeting by following the instructions provided on the enclosed proxy card. C&J recommends that C&J stockholders entitled to vote submit a proxy even if they plan to attend the C&J Special Meeting.

C&J stockholders who hold their shares beneficially in “street name” and wish to submit a proxy must provide instructions to the broker, bank, trustee or other nominee that holds their shares of record as to how to vote their shares with respect to Proposals 1, 2 and 3. C&J stockholders who hold their shares beneficially and wish to vote in person at the C&J Special Meeting must obtain a “legal proxy.”

C&J stockholders of record may submit a proxy in one of four ways or vote in person at the C&J Special Meeting:

 

   

Internet: C&J stockholders may submit their proxies over the Internet at the web address shown on their proxy cards. You will need the 16-digit control number included on your proxy card or your paper voting instruction form (if you received a paper copy of the proxy materials). Internet voting is available 24 hours a day and will be accessible until 11:59 p.m. Eastern Time, on the day before the C&J Special Meeting. Stockholders will be given an opportunity to confirm that their voting instructions have been properly recorded. C&J stockholders who submit a proxy this way need not send in their proxy card.

 

   

Telephone: C&J stockholders may submit their proxy by calling the toll-free telephone number shown on their proxy card. Telephone voting is available 24 hours a day and will be accessible until 11:59 p.m. Eastern Time, on the day before the C&J Special Meeting. Voice prompts will guide stockholders through the voting and allow them to confirm that their instructions have been properly recorded. C&J stockholders who submit a proxy this way need not send in their proxy card.

 

   

Mail: C&J stockholders may submit their proxy by properly completing, signing, dating and mailing their proxy card in the postage-paid envelope (if mailed in the United States) included with this joint proxy statement/prospectus. C&J stockholders who submit a proxy this way should mail the proxy card early enough so that it is received before the date of the C&J Special Meeting.

 

55


Table of Contents
   

In Person: C&J stockholders may vote in person at the C&J Special Meeting or by sending a representative with an acceptable proxy that has been signed and dated. Attendance at the C&J Special Meeting will not, however, in and of itself constitute a vote or a revocation of a prior proxy.

C&J stockholders are encouraged to submit a proxy promptly. Each valid proxy received in time will be voted at the C&J Special Meeting according to the choice specified, if any. Executed but uninstructed proxies (i.e., proxies that are properly signed, dated and returned but are not marked to tell the proxies how to vote) will be voted in accordance with the recommendations of the C&J Board. To reduce administrative costs and help the environment by conserving natural resources, C&J asks that C&J stockholders vote through the Internet or by telephone, both of which are available 24 hours a day.

Notwithstanding the above, C&J stockholders who hold their shares in “street name” and who submit voting instructions to their bank, broker or other nominee, must submit those instructions to the bank, broker or other nominee prior to the deadline set forth in the information from such bank, broker or other nominee on how to submit voting instructions.

C&J does not expect that any matter other than the proposals listed above will be brought before the C&J Special Meeting, and the bylaws of C&J provide that the only business that may be conducted at the C&J Special Meeting are those proposals brought before the meeting pursuant to this joint proxy statement/prospectus.

Proxies and Revocation

C&J stockholders of record have the right to revoke their proxies at any time before the proxy is voted at the C&J Special Meeting in any of the following ways:

 

   

by sending a signed written notice of revocation to C&J’s corporate secretary, provided such statement is received no later than the day before the C&J Special Meeting;

 

   

by voting again by Internet or telephone at a later time before the closing of the voting facilities at 11:59 p.m. Eastern Time, on the day before the C&J Special Meeting;

 

   

by properly submitting a new, later-dated proxy card, which is received no later than the day before the C&J Special Meeting; or

 

   

by attending the C&J Special Meeting, revoking the proxy and voting in person (attending the C&J Special Meeting will not by itself have the effect of revoking a previously submitted proxy).

Only the last submitted proxy card from a C&J stockholder will be considered.

Execution or revocation of a proxy will not in any way affect the stockholder’s right to attend the C&J Special Meeting and vote in person.

Written notices of revocation and other communications with respect to the revocation of proxies should be addressed to:

C&J Energy Services, Inc.

Attn: Corporate Secretary

3990 Rogerdale Rd.

Houston, TX 77042

C&J beneficial owners may change their voting instruction by submitting new voting instructions to the brokers, banks or other nominees that hold their shares of record or by requesting a “legal proxy” from such broker, bank or other nominee and voting in person at the C&J Special Meeting.

 

56


Table of Contents

Proxy Solicitation Costs

C&J is soliciting proxies to provide an opportunity to all C&J stockholders to vote on agenda items, whether or not the stockholders are able to attend the C&J Special Meeting or an adjournment or postponement thereof. C&J will bear the entire cost of soliciting proxies from its stockholders, except that C&J and Keane have agreed to each pay one half of the costs and expenses of filing, printing and mailing this joint proxy statement/prospectus and all filing and other similar fees payable to the SEC in connection with this joint proxy statement/prospectus. In addition to the solicitation of proxies by mail, C&J will request that banks, brokers and other nominee record holders send proxies and proxy material to the beneficial owners of C&J Common Stock and secure their voting instructions, if necessary. C&J may be required to reimburse those banks, brokers and other nominees on request for their reasonable expenses in taking those actions.

C&J has also retained the C&J Solicitation Agent to assist in soliciting proxies and in communicating with C&J stockholders and estimates that it will pay the C&J Solicitation Agent a fee of approximately $20,000 plus reimbursement for certain out-of-pocket fees and expenses. C&J also has agreed to indemnify the C&J Solicitation Agent against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions). Proxies may be solicited on behalf of C&J or by C&J directors, officers and other employees in person, by mail, by telephone, by facsimile, by messenger, via the Internet or by other means of communication, including electronic communication. Directors, officers and employees of C&J will not be paid any additional amounts for their services or solicitation in this regard.

Inspector of Election

The C&J Board has appointed Danielle Hunter, C&J’s Executive Vice President, General Counsel, Chief Risk and Compliance Officer and Corporate Secretary, to act as the inspector of election at the C&J Special Meeting.

Adjournments

The C&J Special Meeting may be adjourned by the chairman of the C&J Special Meeting, regardless of whether there is a quorum, without further notice other than by an announcement made at the C&J Special Meeting. In the case that a quorum is not present at the C&J Special Meeting, or in the case that a quorum is present at the C&J Special Meeting but there are not sufficient votes at the time of the C&J Special Meeting to adopt the Merger Agreement, then the chairman of the C&J Special Meeting has the power to adjourn the C&J Special Meeting or, alternatively, C&J stockholders may be asked to vote on a proposal to adjourn the C&J Special Meeting in order to permit the further solicitation of proxies.

If the adjournment is for more than 30 days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting must be given to each C&J stockholder of record entitled to vote at the C&J Special Meeting.

Appraisal Rights

C&J stockholders are not entitled to appraisal or dissenters’ rights in connection with the merger under Section 262 of the DGCL. For additional information, please see “The Merger—Appraisal Rights and Dissenters’ Rights.”

Other Matters

At this time, C&J knows of no other matters to be submitted at the C&J Special Meeting.

Householding of Special Meeting Materials

Unless C&J has received contrary instructions, C&J may send a single copy of this joint proxy statement/prospectus and notice to any household at which two or more stockholders reside if C&J believes the

 

57


Table of Contents

stockholders are members of the same family. Each stockholder in the household will continue to receive a separate proxy card. This process, known as “householding,” reduces the volume of duplicate information received at a household and helps to reduce C&J’s expenses.

Questions and Additional Information

C&J stockholders may contact the C&J Solicitation Agent to request additional copies of any materials at:

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, NY 10022

Shareholders may call toll free: (888) 750-5834

Banks and Brokers may call collect: (212) 750-5833

C&J STOCKHOLDERS SHOULD CAREFULLY READ THIS JOINT PROXY STATEMENT/PROSPECTUS IN ITS ENTIRETY FOR MORE DETAILED INFORMATION CONCERNING THE MERGER AGREEMENT AND THE MERGER. IN PARTICULAR, C&J STOCKHOLDERS ARE DIRECTED TO THE MERGER AGREEMENT, WHICH IS ATTACHED AS ANNEX A HERETO.

 

58


Table of Contents

C&J PROPOSAL 1—ADOPTION OF THE MERGER AGREEMENT

This joint proxy statement/prospectus is being furnished to C&J stockholders as part of the solicitation of proxies by the C&J Board for use at the C&J Special Meeting to consider and vote upon a proposal to adopt the Merger Agreement, which is attached as Annex A to this joint proxy statement/prospectus, and approve the transactions contemplated thereby, including the merger.

The C&J Board, after due and careful discussion and consideration, unanimously approved and declared advisable the Merger Agreement, the merger and the other transactions contemplated by the Merger Agreement and determined that the Merger Agreement, the merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of C&J and its stockholders.

The C&J Board accordingly unanimously recommends that C&J stockholders adopt the Merger Agreement, as disclosed in this joint proxy statement/prospectus, particularly the related narrative disclosures in the sections of this joint proxy statement/prospectus entitled “The Merger” and “The Merger Agreement” and as attached as Annex A to this joint proxy statement/prospectus.

The merger between C&J and Keane cannot be completed without the affirmative vote of a majority of the outstanding shares of C&J Common Stock entitled to vote thereon. A failure to vote, a broker non-vote or an abstention will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement.

 

 

IF YOU ARE A C&J STOCKHOLDER, THE C&J BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE C&J MERGER PROPOSAL

 

59


Table of Contents

C&J PROPOSAL 2—NON-BINDING ADVISORY VOTE ON MERGER-RELATED

COMPENSATION FOR NAMED EXECUTIVE OFFICERS

Pursuant to Section 14A of the Exchange Act and Rule 14a-21(c) thereunder, C&J is seeking a non-binding advisory stockholder approval of the compensation of C&J’s named executive officers that is based on or otherwise relates to the merger as disclosed in “The Merger—Interests of C&J’s Directors and Executive Officers in the Merger—Quantification of Potential Payments to C&J Named Executive Officers in Connection with the Merger.” The C&J Compensation Proposal gives C&J stockholders the opportunity to express their views on the merger-related compensation of C&J’s named executive officers.

Accordingly, C&J is asking C&J stockholders to vote “FOR” the adoption of the following resolution, on a non-binding advisory basis:

“RESOLVED, that C&J stockholders approve, on a non-binding advisory basis, the compensation that may be paid or become payable to C&J’s named executive officers in connection with the merger, as disclosed pursuant to Item 402(t) of Regulation S-K under “The Merger—Interests of C&J’s Directors and Executive Officers in the Merger—Quantification of Potential Payments to C&J Named Executive Officers in Connection with the Merger” of the joint proxy statement/prospectus (which disclosure includes the compensation table and related narrative named executive officer compensation disclosures required pursuant to Item 402(t) of Regulation S-K)”

The vote on the advisory compensation proposal is a vote separate and apart from the vote to approve the C&J Merger Proposal. Accordingly, C&J stockholders of record may vote to approve the C&J Merger Proposal, and vote not to approve the C&J Compensation Proposal, and vice versa. If the merger is completed, the merger-related compensation may be paid to C&J’s named executive officers to the extent payable in accordance with the terms of the compensation agreements and arrangements even if C&J stockholders fail to approve the advisory vote regarding merger-related compensation.

The affirmative vote of a majority of votes cast by C&J stockholders entitled to vote thereon and present in person or represented by proxy at the C&J Special Meeting is required to approve the C&J Compensation Proposal. A failure to vote, a broker non-vote or an abstention will have no effect on the outcome of the C&J Compensation Proposal.

 

 

IF YOU ARE A C&J STOCKHOLDER, THE C&J BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE C&J COMPENSATION PROPOSAL

 

60


Table of Contents

C&J PROPOSAL 3—ADJOURNMENT OF THE C&J SPECIAL MEETING

The C&J Special Meeting may be adjourned to another time and place if necessary to permit solicitation of additional proxies if there are not sufficient votes to approve the C&J Merger Proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to C&J stockholders.

C&J is asking its stockholders to authorize the holder of any proxy solicited by the C&J Board to vote in favor of any adjournment of the C&J Special Meeting to solicit additional proxies if there are not sufficient votes to approve the C&J Merger Proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to C&J stockholders.

The C&J Board unanimously recommends that C&J stockholders approve the proposal to adjourn the C&J Special Meeting, if necessary.

Whether or not a quorum is present, the affirmative vote of a majority of votes cast by C&J stockholders entitled to vote thereon and present in person or represented by proxy at the C&J Special Meeting is required to approve the C&J Adjournment Proposal. A failure to vote, a broker non-vote or an abstention will have no effect on the outcome of the C&J Adjournment Proposal.

 

 

IF YOU ARE A C&J STOCKHOLDER, THE C&J BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE C&J ADJOURNMENT PROPOSAL

 

61


Table of Contents

THE KEANE SPECIAL MEETING

General

This joint proxy statement/prospectus is first being mailed on or about September 23, 2019 and constitutes notice of the Keane Special Meeting in conformity with the requirements of the DGCL and the bylaws of Keane (the “Keane Bylaws”).

This joint proxy statement/prospectus is being provided to Keane stockholders as part of a solicitation of proxies by the Keane Board for use at the Keane Special Meeting and at any adjournments or postponements of the Keane Special Meeting. Keane stockholders are encouraged to read the entire document carefully, including the annexes to and documents incorporated by reference into this document, for more detailed information regarding the Merger Agreement and the transactions contemplated by the Merger Agreement.

Date, Time and Place of the Keane Special Meeting

The Keane Special Meeting is scheduled to be held at Keane’s headquarters at 1800 Post Oak Boulevard, Suite 450, Houston, TX 77056, on October 22, 2019, beginning at 9:30 a.m. Central Time, unless postponed to a later date.

Matters to be Considered at the Keane Special Meeting

The Keane Special Meeting is being held to consider and vote on the following proposals, each as further described in this joint proxy statement/prospectus:

 

   

Proposal 1—the Keane Share Issuance Proposal: to approve the issuance of Keane Common Stock to C&J stockholders in connection with the merger;

 

   

Proposal 2—the Keane Compensation Proposal: to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to Keane’s named executive officers in connection with the merger; and

 

   

Proposal 3—the Keane Adjournment Proposal: to approve the adjournment of the Keane Special Meeting to solicit additional proxies if there are not sufficient votes at the time of the Keane Special Meeting to approve the Keane Share Issuance Proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to Keane stockholders.

Recommendation of the Keane Board of Directors

The Keane Board unanimously recommends that Keane stockholders vote:

 

   

Proposal 1: “FOR” the Keane Share Issuance Proposal;

 

   

Proposal 2: “FOR” the Keane Compensation Proposal; and

 

   

Proposal 3: “FOR” the Keane Adjournment Proposal.

After careful consideration, upon the unanimous recommendation of the Keane Special Committee solely with respect to the Keane Share Issuance Proposal, the Keane Board unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including, but not limited to, the merger and the share issuance on the terms set forth in the Merger Agreement, are fair to, and in the best interests of, Keane and the holders of shares of Keane Common Stock; (ii) approved and declared advisable the Merger Agreement and the transactions contemplated thereby, including the merger, on the terms and subject to the conditions set forth in the Merger Agreement; (iii) directed that the share issuance be submitted to the holders of shares of Keane Common Stock for their approval; and (iv) subject to the terms and conditions of the Merger Agreement, resolved to recommend that the Keane stockholders approve the share issuance.

 

62


Table of Contents

This joint proxy statement/prospectus contains important information regarding these proposals and factors that Keane stockholders should consider when deciding how to cast their votes. Keane stockholders are encouraged to read this entire document carefully, including the annexes to and the documents incorporated by reference into this document, for more detailed information regarding the Merger Agreement, the merger and the other transactions contemplated by the Merger Agreement.

Please also see “The Merger—Recommendation of the Keane Board and Reasons for the Merger.”

Attending the Keane Special Meeting

You are entitled to attend the Keane Special Meeting only if you are a stockholder of record of Keane at the close of business on September 18, 2019 (the record date for the Keane Special Meeting), you hold your shares of Keane beneficially in the name of a broker, bank or other nominee as of the Keane Record Date, or you hold a valid proxy for the Keane Special Meeting.

If you are a stockholder of record of Keane at the close of business on September 18, 2019 and wish to attend the Keane Special Meeting, please so indicate on the appropriate proxy card. Your name will be verified against the list of stockholders of record prior to your being admitted to the Keane Special Meeting.

If a broker, bank or other nominee is the record owner of your shares of Keane Common Stock, you will need to have proof that you are the beneficial owner as of the Keane Record Date to be admitted to the Keane Special Meeting. A recent statement or letter from your broker, bank or other nominee confirming your ownership as of the Keane Record Date, or presentation of a valid proxy from a broker, bank or other nominee that is the record owner of your shares, would be acceptable proof of your beneficial ownership.

You should be prepared to present photo identification for admittance. If you do not provide photo identification or comply with the other procedures outlined above upon request, you might not be admitted to the Keane Special Meeting.

Record Date for the Keane Special Meeting and Voting Rights

The record date to determine who is entitled to receive notice of and to vote at the Keane Special Meeting, or any adjournments or postponements thereof, is September 18, 2019. As of the close of business on August 29, 2019, the latest practicable date prior to the date of this joint proxy statement/prospectus, there were 105,015,124 shares of Keane Common Stock issued and outstanding, each entitled to vote at the Keane Special Meeting. Each Keane stockholder will have one vote for any matter properly brought before the Keane Special Meeting for each share of Keane Common Stock such holder owned at the close of business on the Keane Record Date. Only Keane stockholders of record at the close of business on the Keane Record Date are entitled to receive notice of and to vote at the Keane Special Meeting and any and all adjournments or postponements thereof.

Quorum and Broker Non-Votes

A quorum of stockholders is necessary to conduct the Keane Special Meeting. The holders of a majority of the shares of Keane Common Stock issued and outstanding and entitled to vote at the meeting must be represented at the Keane Special Meeting in person or by proxy in order to constitute a quorum. Abstentions will be counted for purposes of determining whether a quorum exists. If a quorum is not present, the Keane Special Meeting will be postponed until the holders of the number of shares of Keane Common Stock required to constitute a quorum attend.

Under the NYSE rules, banks, brokers or other nominees who hold shares in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokers or other nominees are not

 

63


Table of Contents

allowed to exercise their voting discretion with respect to the approval of matters that the NYSE determines to be “non-routine.” Generally, a broker non-vote occurs on an item when (i) a bank, broker or other nominee has discretionary authority to vote on one or more “routine” proposals to be voted on at a meeting of stockholders, but is not permitted to vote on other “non-routine” proposals without instructions from the beneficial owner of the shares and (ii) the beneficial owner fails to provide the bank, broker or other nominee with such instructions. Under the NYSE rules, “non-routine” matters include the Keane Share Issuance Proposal (Keane Proposal 1), the Keane Compensation Proposal (Keane Proposal 2) and the Keane Adjournment Proposal (Keane Proposal 3). Because none of the proposals to be voted on at the Keane Special Meeting are “routine” matters for which brokers may have discretionary authority to vote, Keane does not expect any broker non-votes at the Keane Special Meeting. As a result, if you hold your shares of Keane Common Stock in “street name,” your shares will not be represented and will not be voted on any matter unless you affirmatively instruct your bank, broker or other nominee how to vote your shares in one of the ways indicated by your bank, broker or other nominee. It is therefore critical that you cast your vote by instructing your bank, broker or other nominee on how to vote.

If you submit a properly executed proxy card, even if you abstain from voting or vote against the Keane Share Issuance Proposal, your shares of Keane Common Stock will be counted for purposes of calculating whether a quorum is present at the Keane Special Meeting. Executed but unvoted proxies will be voted in accordance with the recommendations of the Keane Board. If additional votes must be solicited to approve the share issuance, it is expected that the meeting will be adjourned to solicit additional proxies.

Vote Required

The votes required for each proposal are as follows:

 

   

Proposal 1—the Keane Share Issuance Proposal. Approval requires the affirmative vote of a majority of votes cast by Keane stockholders entitled to vote thereon and present in person or represented by proxy at the Keane Special Meeting. Accordingly, a Keane stockholder’s abstention from voting, a broker non-vote or the failure of a Keane stockholder to vote (including the failure of a Keane stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have no effect on the outcome of the Keane Share Issuance Proposal. Because the Keane Share Issuance Proposal is non-routine, brokers, banks and other nominees do not have discretionary authority to vote on the Keane Share Issuance Proposal and will not be able to vote on the Keane Share Issuance Proposal absent instructions from the beneficial owner.

 

   

Proposal 2—the Keane Compensation Proposal. Approval requires the affirmative vote of a majority of votes cast by Keane stockholders entitled to vote thereon and present in person or represented by proxy at the Keane Special Meeting. Accordingly, a Keane stockholder’s abstention from voting, a broker non-vote or the failure of a Keane stockholder to vote (including the failure of a Keane stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have no effect on the outcome of the Keane Compensation Proposal. While the Keane Board intends to consider the vote resulting from this proposal, the vote is advisory only and therefore not binding on Keane, and, if the merger with C&J is approved by Keane stockholders and consummated, the compensation will be payable even if the Keane Compensation Proposal is not approved.

 

   

Proposal 3—the Keane Adjournment Proposal. Approval requires the affirmative vote of a majority of votes cast by Keane stockholders entitled to vote thereon and present in person or represented by proxy at the Keane Special Meeting. Accordingly, a Keane stockholder’s abstention from voting, a broker non-vote or the failure of a Keane stockholder to vote (including the failure of a Keane stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have no effect on the outcome of the Keane Adjournment Proposal. Because the Keane Adjournment Proposal is non-routine, brokers, banks and other nominees

 

64


Table of Contents
 

do not have discretionary authority to vote on the Keane Adjournment Proposal, and will not be able to vote on the Keane Adjournment Proposal absent instructions from the beneficial owner.

As of August 29, 2019, the latest practicable date prior to the date of this joint proxy statement/prospectus, Keane directors and executive officers, as a group, owned and were entitled to vote 683,949 shares of Keane Common Stock, or approximately 0.65% of the total outstanding shares of Keane Common Stock. Although none of them has entered into any agreement obligating them to do so, Keane currently expects that all of its directors and executive officers will vote their shares “FOR” the Keane Share Issuance Proposal, “FOR” the Keane Compensation Proposal and “FOR” the Keane Adjournment Proposal. Keane Investor, which owns approximately 49.2% of the outstanding shares of Keane Common Stock, and Cerberus, an affiliate of Keane Investor, are party to the Support Agreement with C&J, pursuant to which Keane Investor and Cerberus have agreed, subject to the terms and conditions thereof including with respect to the percentage of Keane Investor’s shares required to be voted in favor in the event of a Change of Recommendation by Keane to vote Keane Investor’s shares in favor of the Keane Share Issuance Proposal at the Keane Special Meeting. For more information, please see “The Merger Agreement—Support Agreement.” Please also see “The Merger—Interests of Keane’s Directors and Executive Officers in the Merger” and the arrangements described in Part III of Keane’s Annual Report on Form 10-K for the fiscal year ended on December 31, 2018 and Keane’s Definitive Proxy Statement on Schedule 14A for Keane’s annual meeting filed with the SEC on April 1, 2019, both of which are incorporated into this joint proxy statement/prospectus by reference.

Methods of Voting

If you are a stockholder of record, you may vote by proxy by mail, or by voting in person at the Keane Special Meeting. For shares held through a bank, broker or other nominee in “street name” instead of as a registered holder, you may vote by submitting your voting instructions to your bank, broker or other nominee. In most instances, you will be able to do this over the Internet, by telephone or by mail. Please refer to the information from your bank, broker or other nominee on how to submit voting instructions. If you do not provide voting instructions to your bank, broker or other nominee, your shares of Keane Common Stock will not be voted on any proposal as your bank, broker or other nominee does not have discretionary authority to vote on any of the proposals to be voted on at the Keane Special Meeting. Please see “—Quorum and Broker Non-Votes.”

 

   

Mail: If you have received a paper copy of the proxy materials by mail, you may complete, sign, date and return by mail the paper proxy card or voting instruction form sent to you in the envelope provided to you with your proxy materials or voting instruction form.

 

   

In Person: All stockholders of record may vote in person at the Keane Special Meeting. If you hold your shares through a bank, broker or other nominee in “street name” (instead of as a registered holder), you must obtain a legal proxy from your bank, broker or other nominee and bring the legal proxy to the meeting in order to vote in person at the Keane Special Meeting. For more information on how to attend in person, please see “—Attending the Keane Special Meeting.”

If you are a stockholder of record, proxies submitted by mail as described above must be received by 11:59 p.m. Eastern Time, on the day before the Keane Special Meeting.

Notwithstanding the above, if your shares are held in “street name” by a bank, broker or other nominee, you should follow the instructions you receive from your bank, broker or other nominee on how to vote your shares. Registered stockholders who attend the Keane Special Meeting may vote their shares personally even if they previously have voted their shares.

If you deliver a proxy pursuant to this joint proxy statement/prospectus, but do not specify a choice with respect to any proposal set forth in this joint proxy statement/prospectus, your underlying shares of Keane Common Stock will be voted on such uninstructed proposal in accordance with the recommendation of the Keane Board. Keane does not expect that any matter other than the proposals listed above will be brought before

 

65


Table of Contents

the Keane Special Meeting and Keane Bylaws provide that the only business that may be conducted at the Keane Special Meeting are those proposals brought before the meeting pursuant to this joint proxy statement/prospectus.

Proxies and Revocation

Any stockholder giving a proxy has the right to revoke it before the proxy is voted at the Keane Special Meeting by any of the following actions:

 

   

by sending a signed written notice that you revoke your proxy to Keane’s corporate secretary, bearing a later date than your original proxy and mailing it so that it is received prior to the Keane Special Meeting;

 

   

by subsequently submitting a new proxy at a later date than your original proxy so that the new proxy is received by the deadline specified on the accompanying proxy card; or

 

   

by revoking your proxy and voting in person at the Keane Special Meeting.

Execution or revocation of a proxy will not in any way affect the stockholder’s right to attend the Keane Special Meeting and vote in person.

Written notices of revocation and other communications with respect to the revocation of proxies should be addressed to:

Keane Group, Inc.

Attn: Corporate Secretary

1800 Post Oak Boulevard, Suite 450

Houston, TX 77056

If your shares are held in “street name” and you previously provided voting instructions to your broker, bank or other nominee, you should follow the instructions provided by your broker, bank or other nominee to revoke or change your voting instructions.

Proxy Solicitation Costs

Keane is soliciting proxies to provide an opportunity to all Keane stockholders to vote on agenda items, whether or not the stockholders are able to attend the Keane Special Meeting or an adjournment or postponement thereof. Keane will bear the entire cost of soliciting proxies from its stockholders, except that C&J and Keane have agreed to each pay one half of the costs and expenses of filing, printing and mailing this joint proxy statement/prospectus and all filing and other similar fees payable to the SEC in connection with this joint proxy statement/prospectus. In addition to the solicitation of proxies by mail, Keane will ask banks, brokers and other custodians, nominees and fiduciaries to forward the proxy solicitation materials to the beneficial owners of shares of Keane Common Stock held of record by such nominee holders. Keane may be required to reimburse these nominee holders for their customary clerical and mailing expenses incurred in forwarding the proxy solicitation materials to the beneficial owners.

Keane has retained the Keane Solicitation Agent to assist in the solicitation process. Keane estimates that it will pay the Keane Solicitation Agent a fee of approximately $20,000, plus reimbursement of reasonable expenses. Keane also has agreed to indemnify the Keane Solicitation Agent against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions). Proxies may be solicited on behalf of Keane or by Keane directors, officers and other employees in person, by mail, by telephone, by facsimile, by messenger, via the Internet or by other means of communication, including electronic communication. Directors, officers and employees of Keane will not be paid any additional amounts for their services or solicitation in this regard.

 

66


Table of Contents

Householding

SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and notices with respect to two or more stockholders sharing the same address by delivering a single proxy statement or a single notice addressed to those stockholders. This process, which is commonly referred to as “householding,” provides cost savings for companies. Some brokers household proxy materials, delivering a single proxy statement or notice to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, or if your household is receiving multiple copies of these documents and you wish to request that future deliveries be limited to a single copy, please notify your broker. You can request prompt delivery of a copy of this joint proxy statement/prospectus by writing to Corporate Secretary, Keane Group, Inc., 1800 Post Oak Boulevard, Suite 450, Houston, TX 77056, or by calling (713) 357-9490.

Inspector of Election

The Keane Board has appointed Robert Bickmore, Keane’s Director of Internal Audit, to act as the inspector of election at the Keane Special Meeting.

Adjournments

If a quorum is present at the Keane Special Meeting but there are not sufficient votes at the time of the Keane Special Meeting to approve the Keane Share Issuance Proposal, then Keane stockholders may be asked to vote on the Keane Adjournment Proposal.

At any subsequent reconvening of the Keane Special Meeting at which a quorum is present, any business may be transacted that might have been transacted at the original meeting and all proxies will be voted in the same manner as they would have been voted at the original convening of the Keane Special Meeting, except for any proxies that have been effectively revoked or withdrawn prior to the time the proxy is voted at the reconvened meeting.

Assistance

If you need assistance voting or in completing your proxy card or have questions regarding the Keane Special Meeting, please contact the Keane Solicitation Agent:

MacKenzie Partners, Inc.

1407 Broadway

New York, New York 10018

Stockholders, banks and brokers call: (800) 322-2885

KEANE STOCKHOLDERS SHOULD CAREFULLY READ THIS JOINT PROXY STATEMENT/PROSPECTUS IN ITS ENTIRETY FOR MORE DETAILED INFORMATION CONCERNING THE MERGER AGREEMENT AND THE MERGER. IN PARTICULAR, KEANE STOCKHOLDERS ARE DIRECTED TO THE MERGER AGREEMENT, WHICH IS ATTACHED AS ANNEX A HERETO.

 

67


Table of Contents

KEANE PROPOSAL 1—SHARE ISSUANCE

This joint proxy statement/prospectus is being furnished to you as a stockholder of Keane as part of the solicitation of proxies by the Keane Board for use at the Keane Special Meeting to consider and vote upon a proposal to approve the issuance of shares of Keane Common Stock to current C&J stockholders pursuant to the Merger Agreement, which is attached as Annex A to this joint proxy statement/prospectus. Under the rules of the NYSE, a company listed on the NYSE is required to obtain stockholder approval prior to the issuance of common stock in any transaction or series of related transactions if the number of shares of common stock to be issued is equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of the common stock. If the merger is completed, it is currently estimated that Keane will issue approximately 108,621,890 shares of Keane Common Stock in connection with the merger, which will exceed 20% of the shares of Keane Common Stock outstanding before such issuance and for this reason Keane must obtain the approval of Keane stockholders for the issuance of shares of Keane Common Stock in connection with the merger.

The Keane Board, after due and careful discussion and consideration and upon the unanimous recommendation of the Keane Special Committee, unanimously approved and declared advisable the Merger Agreement, the merger and the other transactions contemplated by the Merger Agreement, including the issuance of shares of Keane Common Stock to C&J stockholders pursuant to the Merger Agreement, and determined that the Merger Agreement, the merger and the other transactions contemplated by the Merger Agreement, including the issuance of shares of Keane Common Stock to C&J stockholders pursuant to the Merger Agreement, are fair to and in the best interests of Keane and its stockholders.

The Keane Board, upon the unanimous recommendation of the Keane Special Committee, accordingly unanimously recommends that Keane stockholders vote “FOR” the issuance of Keane Common Stock to C&J stockholders pursuant to the Merger Agreement, as disclosed in this joint proxy statement/prospectus, particularly the related narrative disclosures in “The Merger” and “The Merger Agreement” and as attached as Annex A to this joint proxy statement/prospectus.

The merger between C&J and Keane cannot be completed without the affirmative vote of a majority of votes cast by Keane stockholders entitled to vote thereon and present in person or represented by proxy at the Keane Special Meeting. A failure to vote, a broker non-vote or an abstention will have no effect on the outcome of the Keane Share Issuance Proposal.

 

 

IF YOU ARE A KEANE STOCKHOLDER, THE KEANE BOARD OF DIRECTORS, UPON THE UNANIMOUS RECOMMENDATION OF THE KEANE SPECIAL COMMITTEE, UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE KEANE SHARE ISSUANCE PROPOSAL

 

68


Table of Contents

KEANE PROPOSAL 2—NON-BINDING ADVISORY VOTE ON MERGER-RELATED COMPENSATION FOR NAMED EXECUTIVE OFFICERS

Pursuant to Section 14A of the Exchange Act and Rule 14a-21(c) thereunder, Keane is seeking a non-binding advisory stockholder approval of the compensation of Keane’s named executive officers that is based on or otherwise relates to the merger as disclosed in “The Merger—Interests of Keane’s Directors and Executive Officers in the Merger—Quantification of Potential Payments to Keane Named Executive Officers in Connection with the Merger.” The proposal gives Keane stockholders the opportunity to express their views on the merger-related compensation of Keane’s named executive officers.

Accordingly, the Keane Board unanimously recommends a vote “FOR” the advisory compensation proposal the adoption of the following resolution, on a non-binding advisory basis:

“RESOLVED, that the compensation that will or may be paid or become payable to Keane’s named executive officers, in connection with the merger, and the agreements or understandings pursuant to which such compensation will or may be paid or become payable, in each case as disclosed pursuant to Item 402(t) of Regulation S-K in “The Merger—Interests of Keane’s Directors and Executive Officers in the Merger—Quantification of Potential Payments to Keane Named Executive Officers in Connection with the Merger” are hereby APPROVED.”

The vote on the advisory compensation proposal is a vote separate and apart from the vote on the proposal to approve the Keane Share Issuance Proposal. Accordingly, if you are a Keane stockholder, you may vote to approve the Keane Share Issuance Proposal and vote not to approve the Keane Compensation Proposal, and vice versa. If the merger is completed, the merger-related compensation may be paid to Keane’s named executive officers to the extent payable in accordance with the terms of the compensation agreements and arrangements even if Keane stockholders fail to approve the advisory vote regarding merger-related compensation.

Assuming a quorum is present at the Keane Special Meeting, approval of the Keane Compensation Proposal requires the affirmative vote of a majority of votes properly cast on the proposal at the Keane Special Meeting. An abstention, a broker non-vote or other failure to vote will have no effect on the Keane Compensation Proposal.

 

 

IF YOU ARE A KEANE STOCKHOLDER, THE KEANE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE KEANE COMPENSATION PROPOSAL

 

69


Table of Contents

KEANE PROPOSAL 3—ADJOURNMENT OF THE KEANE SPECIAL MEETING

The Keane Special Meeting may be adjourned to another time and place if necessary to permit solicitation of additional proxies if there are not sufficient votes to approve the Keane Share Issuance Proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to Keane stockholders.

Keane is asking its stockholders to authorize the holder of any proxy solicited by the Keane Board to vote in favor of any adjournment to the Keane Special Meeting to solicit additional proxies if there are not sufficient votes to approve the Keane Share Issuance Proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to Keane stockholders.

The Keane Board unanimously recommends that Keane stockholders vote “FOR” the proposal to adjourn the Keane Special Meeting, if necessary.

Assuming a quorum is present at the Keane Special Meeting, approval of the Keane Adjournment Proposal requires the affirmative vote of a majority of votes properly cast on the proposal at the Keane Special Meeting. An abstention, a broker non-vote or other failure to vote will have no effect on the Keane Adjournment Proposal.

 

 

IF YOU ARE A KEANE STOCKHOLDER, THE KEANE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE KEANE ADJOURNMENT PROPOSAL

 

70


Table of Contents

THE MERGER

The following discussion contains certain information about the proposed merger. This discussion is subject, and qualified in its entirety by reference, to the Merger Agreement attached as Annex A to this joint proxy statement/prospectus. You are urged to carefully read this entire proxy statement/prospectus and the documents incorporated by reference herein, including the Merger Agreement, before making any investment or voting decision. Please see “Where You Can Find More Information.”

Transaction Structure

Upon satisfaction or waiver of the conditions to closing in the Merger Agreement, at the effective time, Merger Sub, a direct, wholly owned subsidiary of Keane, formed for the purpose of effecting the merger, will merge with and into C&J, with C&J as the surviving corporation and wholly owned subsidiary of Keane, and immediately thereafter, as part of the same transaction, C&J will merge with and into another wholly owned subsidiary of Keane, with such subsidiary continuing as the surviving entity. At the effective time, each share of C&J Common Stock issued and outstanding immediately prior to the effective time (other than C&J Excluded Shares) will be cancelled and converted into the right to receive 1.6149 shares of Keane Common Stock. In addition, Keane will take all actions as may be required so that at the effective time, each outstanding C&J equity award in respect of C&J Common Stock will be treated as described in “—Treatment of Existing C&J Long-Term Incentive Awards in the Merger.”

Background of the Merger

The board of directors and executive management team of each of C&J and Keane regularly review the operating results, capital structure, future growth opportunities and competitive position of their respective companies in the oilfield services industry. These reviews have included consideration by the companies’ respective management teams and boards of directors, and discussions with outside financial advisors and other industry participants from time to time, of potential strategic transactions, including acquisitions and divestitures, joint ventures, business combinations and other transactions, as well as ongoing initiatives aimed at enhancing stockholder value, strengthening their respective financial and liquidity positions and growing their respective businesses organically, to prepare for and respond to changing market forces and resulting business risks and uncertainties in the oilfield services industry. In the case of Keane, consistent with the views of the Keane Board and management of the benefits of industry consolidation, these reviews have resulted in discussions with numerous other participants in the oilfield services industry concerning potential business combinations.

At various times, each of C&J’s and Keane’s general review and evaluation of the potential acquisition or business combination landscape included an assessment of the other’s businesses and operations. In addition, as leading companies in the oilfield services industry, particularly in the well completions market, C&J and Keane are generally familiar with each other and have, from time to time, discussed potential strategic transactions.

On July 27, 2017, Patrick Murray, the C&J Chairman, and Scott Wille, a director of Keane and Co-Head of Private Equity at Cerberus, met to discuss the potential benefits of consolidation in the oil and gas services industry. Mr. Wille suggested that Mr. Murray meet with James Stewart, the then Chairman and CEO of Keane, and Greg Powell, the Chief Financial Officer of Keane, as an introduction to the management team of Keane.

On September 13, 2017, Mr. Murray met with Messrs. Stewart and Powell in Houston for an introduction.

On July 19, 2018, the Keane Board held a regularly scheduled meeting at which it discussed several potential business combination transactions and the merits of consolidation in the industry. As part of those discussions, the Keane Board gave Robert Drummond, the Keane CEO, and Mr. Wille approval to proactively reach out to several industry participants. On July 25, 2018, Mr. Wille met with a significant shareholder of Company A to discuss the potential merits of consolidation. On July 26, 2018, Mr. Wille met with a significant shareholder of Company B to discuss the potential merits of consolidation.

 

71


Table of Contents

Based upon the July 25, 2018 meeting between Mr. Wille and the significant shareholder of Company A, the management team and the Keane Board determined to enter into a confidentiality agreement with Company A, in order to engage in discussions and due diligence regarding a potential transaction.

During the month of August 2018, the Keane management team, Mr. Wille and Schulte Roth & Zabel LLP (“Schulte”), Keane’s principal outside and transactional counsel, held discussions with the management team and in-house counsel of Company A regarding a potential business combination, including preliminary legal and structural considerations and governance matters.

On August 16, 2018, the Keane Board held a board update call to discuss the potential business combination with Company A.

On August 29, 2018, Company A informed Keane that given market conditions it had decided to focus on its business operations, rather than pursuing a potential business combination.

On October 24, 2018 the Keane Board held a regularly scheduled meeting during which the management team provided an update on potential business combinations.

On November 12, 2018, Mr. Drummond contacted Mr. Gawick, the Chief Executive Officer of C&J, and on November 19, 2018, they met to discuss a potential transaction between the companies. Mr. Drummond indicated that Keane was considering a number of strategic opportunities based on its belief that consolidation in the oilfield services industry was necessary and that such consolidation would be beneficial to all key stakeholders. Mr. Drummond indicated that C&J had been identified by Keane as a preferred strategic partner provided that C&J could divest its Well Support Services segment business lines. Mr. Gawick confirmed that, as had been previously discussed publicly, C&J was continuing to actively pursue potential divestiture opportunities for its Well Support Services segment business lines. The C&J Board and Keane Board were subsequently informed of these discussions, among other matters, as part of regular communication from C&J management and Keane management to their respective boards.

On November 17, 2018, Ms. Hunter, the General Counsel of C&J, contacted the law firm of Kirkland & Ellis LLP (“Kirkland”), which had historically served as outside counsel to C&J, to inform Kirkland of the potential business combination transaction with Keane.

On December 10, 2018, the C&J Board held a regularly scheduled meeting at which it conducted a strategy review with C&J management, with representatives from Kirkland and Morgan Stanley, which had historically served as a financial advisor to C&J, in attendance. The strategy review included a discussion of a potential business combination transaction with Keane, among other companies and strategic opportunities. Kirkland delivered a presentation to the C&J Board relating to certain governance matters and board duties, roles and responsibilities in connection with any potential transaction.

During December 2018 and into early 2019, Mr. Gawick and Mr. Drummond continued to informally discuss both parties’ interest in a potential business combination transaction.

On February 4, 2019, Mr. Drummond and Mr. Gawick met, and Mr. Drummond indicated Keane’s interest in moving forward with pursuing a merger of equals transaction with C&J and expressed a willingness to consider the retention of C&J’s Well Support Services business lines. Mr. Drummond stated that a member of the Keane Board would contact Mr. Murray to advance discussions of a potential business combination of Keane and C&J.

On February 5, 2019, Mr. Wille contacted Mr. Murray and Michael Zawadzki, another C&J director, to discuss the proposed combination of C&J and Keane. On February 6, 2019, Mr. Murray met with Messrs. Wille

 

72


Table of Contents

and Drummond. Mr. Wille expressed Keane’s interest in pursuing a combination of Keane and C&J and Cerberus’ support of such efforts in pursuing a transaction. Mr. Murray confirmed to Mr. Wille that the C&J Board would consider any transaction proposal that Keane might make.

On February 6, 2019, the Keane Board held a meeting at which the Keane management team and Mr. Wille updated the Keane Board concerning their discussions with C&J that had occurred to date. The Keane Board also discussed the process pursuant to which the Keane Board would evaluate the proposed transaction with C&J, including the retention of Citi, as financial advisor to Keane, and Schulte, as legal counsel to Keane. The Keane Board also discussed the expected creation of a special committee of independent directors, consistent with the prior practice of the Keane Board, to evaluate the proposed business combination with C&J as well as any alternative transactions, in light of Cerberus’ large equity stake in Keane and its representation on the Keane Board, as well as the expectation that in any merger transaction Cerberus would be requested to enter into an agreement to vote in favor of the transaction and possibly agree to restrictions on its acquisition or disposition of Keane securities. Marc Edwards, the lead independent director of Keane, indicated that, given Lazard’s previous work with a special committee of Keane, he anticipated that the Keane Special Committee would retain Lazard as its separate financial advisor, subject to negotiation of acceptable engagement terms and confirmation that Lazard did not have any disqualifying conflicts of interest. The Keane Board confirmed its continued interest in exploring the proposed business combination and instructed Keane management to begin due diligence and continue to engage in discussions with C&J management.

Also on February 6, 2019, Messrs. Wille and Drummond met with the CEO of Company C to discuss the potential acquisition of Company C’s well completion assets. These discussions did not result in further engagement.

On February 7, 2019, Messrs. Wille and Murray met to discuss the potential synergies with respect to a business combination of C&J and Keane. These high level business discussions included the possible retention of C&J’s Well Support Services business line and the composition of the Combined Company Board with appropriate representation for Cerberus in light of its significant stake in the Combined Company.

On February 8, 2019, Mr. Gawick updated the C&J Board about his discussions with Mr. Drummond and also informed them of the February 6, 2019 meeting between Mr. Murray and Messrs. Wille and Drummond as well as the February 7, 2019 meeting between Mr. Wille and Mr. Murray. Mr. Gawick also informed the C&J Board that C&J management was working with Morgan Stanley to prepare a preliminary evaluation of the potential combination of Keane and C&J, including potential synergies that could be realized, relative valuation, transaction structure and other considerations. Mr. Gawick recommended that the C&J Board engage Morgan Stanley to assist the C&J Board in evaluating a possible business combination with Keane.

In light of the foregoing discussions, during the week of February 4, 2019, C&J engaged Morgan Stanley to serve as C&J’s lead financial advisor with respect to a potential business combination with Keane.

On February 12, 2019, C&J management met with certain members of the C&J Board to provide an update regarding the ongoing discussions with Keane and to discuss the potential transaction. The C&J Board confirmed its continued interest in exploring the proposed business combination and instructed C&J management to commence initial due diligence and continue to engage in discussions with Keane management.

Also on February 12, 2019, C&J and Keane entered into a mutual confidentiality and non-disclosure agreement to facilitate further discussions regarding a potential business combination, including the disclosure of certain commercial and operational information relating to each of C&J and Keane. The mutual confidentiality and non-disclosure agreement was subsequently amended and restated on March 11, 2019 to add Keane Investor and Cerberus as parties.

On February 20, 2019, the C&J Board held a regularly scheduled meeting at which C&J management delivered a presentation regarding, among other matters, potential strategic opportunities. During this meeting,

 

73


Table of Contents

C&J management presented preliminary views regarding certain financial and structural aspects of the proposed combination with Keane, including potential synergies that could be realized, valuation, transaction rationale and other considerations. Following discussion, the C&J Board determined to further explore a combination with Keane and instructed C&J management and C&J’s advisors to commence additional due diligence and engage with Keane management and Keane’s advisors in order to better understand and confirm the strategic logic and merits of a combination. The C&J Board also instructed C&J management to work with Morgan Stanley to prepare an evaluation of C&J’s prospects as a standalone business, other potential transaction counterparties and strategic opportunities, as well as a significant stock repurchase.

On February 27, 2019, Messrs. Gawick, Murray and Jan Kees van Gaalen, the Chief Financial Officer of C&J, met with Messrs. Drummond and Powell and certain members of the Keane Board. Representatives from C&J’s and Keane’s financial and legal advisors also were in attendance. Mr. Gawick and Mr. Drummond each presented an overview of various aspects of C&J’s and Keane’s respective businesses and organizations and the parties discussed the complementary nature thereof and potential synergies that could be realized as a result of a transaction.

Beginning in March 2019, Keane re-engaged in discussions with Company A concerning a potential business combination transaction. Keane commenced diligence focused on the synergies that might be realized from the potential transaction, as well as the potential balance sheet of the Combined Company, including the need to refinance the debt of Company A and Keane.

C&J and Keane entered into a clean team agreement dated March 13, 2019 regarding the provision by each party of certain competitively sensitive information to the other party and obligating each party to limit access to such information only to specified individuals.

Throughout the months of March and April 2019, representatives of C&J’s and Keane’s respective management teams and financial and legal advisors engaged in transaction discussions and due diligence sessions, and C&J and Keane exchanged financial, commercial and legal due diligence information during that time.

On March 14, 2019, Mr. Drummond and Mr. Gawick met to discuss their companies’ respective organizational management structures, operating models, asset and business profiles, strategies and cultures and the strategic logic of combining the companies.

On March 18, 2019, certain members of the C&J Board met with representatives of C&J management and Morgan Stanley in order to receive an update regarding the status of due diligence and transaction discussions with Keane. C&J’s performance, outlook, strategy, and 2019 capital budget in light of current business and industry conditions was also discussed. Morgan Stanley provided a preliminary discussion on C&J as a standalone business, other potential transaction counterparties and strategic opportunities and the broader market. Morgan Stanley’s presentation included potential strategic rationale for a hypothetical transaction between C&J and certain of these other counterparties, both with respect to transactions involving particular business lines and transactions involving C&J as a whole. While the C&J Board was not engaged in discussions with any potential transaction counterparty for an enterprise wide transaction other than Keane at the time, the members of the C&J Board and Morgan Stanley also discussed certain factors to consider with respect to a hypothetical transaction between C&J and certain of these other counterparties, including capital structure, corporate culture and the likelihood that such party would be interested in actively pursuing a transaction with C&J. The members of the C&J Board then discussed with representatives of C&J management and Morgan Stanley the potential merits and issues associated with a hypothetical transaction between C&J and these potential transaction counterparties. At the conclusion of the meeting, the C&J Board confirmed its continued interest in exploring the proposed transaction with Keane.

On each of March 21, March 26, March 28 and March 29, 2019, representatives from each of C&J management and Keane management engaged in due diligence sessions, including as to their respective business operations and related matters.

 

74


Table of Contents

On March 27, 2019, the Keane Board held a regularly scheduled board update call at which Keane management delivered a presentation regarding, among other matters, potential strategic opportunities. During this meeting, Keane management presented preliminary views regarding certain financial and structural aspects of the proposed combination with C&J, including potential synergies that could be realized, valuation, transaction rationale and other considerations. Following discussion, the Keane Board determined to further explore a combination with C&J and instructed Keane management and Keane’s advisors to conduct additional due diligence and engage with C&J management and C&J’s advisors in order to better understand and confirm the strategic logic and merits of a combination. The Keane Board also instructed management to work with Citi to prepare an evaluation of Keane’s prospects as a standalone business as well as other potential transaction counterparties and strategic opportunities, including a business combination transaction with Company A.

On March 29, 2019, Mr. Wille met with Mr. Zawadzki to discuss the potential composition of the board and management team of the Combined Company.

On April 3, 2019, the Keane Board held a regularly scheduled monthly board update call with the management team of Keane where a potential merger of equals with C&J was discussed, as well as other potential transaction counterparties and strategic opportunities, including a business combination transaction with Company A.

On April 4, 2019, Mr. Gawick and Kenneth Haddad, Senior Vice President of C&J, met with Messrs. Drummond and Powell to discuss the status of the parties’ due diligence efforts, other process considerations, and the merits and structure of the proposed transaction.

On April 5, 2019, the C&J Board held a previously scheduled meeting with representatives of C&J management and Morgan Stanley in attendance. Morgan Stanley presented a preliminary discussion with respect to C&J as a standalone company, other potential transaction counterparties and strategic opportunities. The strategic logic of combining C&J with Keane was also discussed and the C&J Board received an update on the status of transaction discussions and due diligence with Keane. After discussion, the C&J directors determined that a transaction with Keane aligned with C&J’s strategic objectives for a combination, including, in particular, the potential value of synergies and future growth. The C&J Board confirmed its continued interest in exploring the proposed transaction.

On April 10, 2019, Mr. Gawick met with Mr. Drummond to discuss the potential transaction, including process status and next steps. Mr. Drummond indicated that the Keane Board was considering delivering a written term sheet to the C&J Board containing the material terms of a potential transaction.

Also on April 10, 2019, the Keane Board held a regularly scheduled board update call with Keane management where a potential merger of equals with C&J was discussed, as well as other potential transaction counterparties and strategic opportunities, including a business combination transaction with Company A.

On April 11, 2019, Mr. Murray met with C&J management to receive an update regarding the recent discussions with Keane and the status of due diligence. C&J management conveyed its views to Mr. Murray that C&J stockholders should receive no less than 50% of the equity in the Combined Company.

On April 12, 2019, Messrs. Gawick, van Gaalen and Haddad met with Messrs. Drummond and Powell for a discussion which focused on the proposed merger of equals transaction structure, the merits of the business combination and the individual and relative value of the companies, as well as various governance, social and cultural matters. Mr. Gawick conveyed C&J’s position that C&J stockholders should receive no less than 50% of the equity in the Combined Company. Mr. Drummond stated that the Keane Special Committee would contact the C&J Board to discuss relative value and pro forma ownership, as well as social and governance issues.

On April 15, 2019, Mr. Wille contacted Mr. Murray to propose a meeting between representatives of the C&J Board and of the Keane Board and Keane Special Committee to discuss the proposed transaction.

 

75


Table of Contents

Also on April 15, 2019, the C&J Board held a previously scheduled meeting, with representatives of C&J management and Morgan Stanley in attendance, to receive an update regarding the discussions with Keane and to review the preliminary valuation analysis prepared by Morgan Stanley. Following this discussion, the C&J Board proposed that C&J make a verbal indication of interest for a merger of equals transaction in which C&J stockholders would receive no less than 50% of the equity in the Combined Company and C&J would maintain at least equal representation on the board and in the management of the Combined Company from a corporate governance perspective. It was determined that Mr. Murray and Steven Mueller, a director of C&J, reiterate C&J’s interest and position to the Keane Board and Keane Special Committee, as appropriate.

On April 17, 2019, the independent directors of the C&J Board met to discuss the topics to be covered in the upcoming meeting with representatives from the Keane Board and Keane Special Committee and to confirm C&J’s position on key transaction points.

Also on April 17, 2019, the Keane Board met to discuss the potential transaction with C&J as well as the potential alternative transaction with Company A. It was the consensus of the Keane Board that the preferred transaction was a merger of equals with C&J, based on Keane management’s assessment that the cost synergies arising from a merger with C&J would be more easily and rapidly achieved than those arising from a merger with Company A, and that the merger with C&J would result in a less levered Combined Company than the alternative transaction and would not require any refinancing. The Keane Board also discussed, and adopted by written consent on April 22, 2019, the formation of the Keane Special Committee, to be composed of Mr. Edwards, Gary Halverson and Christian Garcia, all independent directors on the Keane Board. The resolutions empowered the Keane Special Committee to engage in discussions with respect to the proposed C&J transaction or any alternative transaction or to elect not to engage in any such transaction, and to engage independent financial, legal and other advisors at Keane’s expense. The resolutions further provided that the Keane Board would not authorize or approve, and that Keane would not engage in, a business combination transaction that had not been recommended by the Keane Special Committee.

On April 18, 2019, Messrs. Murray, Mueller, Zawadzki and Stuart Brightman, a director of C&J, met with Messrs. Wille and Halverson to discuss expediting the transaction process and next steps to reaching an agreement in principle on the key deal terms for a merger of equals transaction. Messrs. Murray and Mueller conveyed C&J’s position that C&J stockholders receive no less than 50% of the equity in the Combined Company and C&J maintain at least equal representation in the governance of the Combined Company. Messrs. Halverson and Wille conveyed Keane’s proposal that Mr. Drummond serve as Chief Executive Officer, Mr. Powell serve as Chief Integration Officer, Mr. van Gaalen serve as Chief Financial Officer and Mr. Murray serve as Chairman of the Combined Company Board. Messrs. Halverson and Wille also proposed that the Combined Company Board be comprised of five representatives from each of Keane and C&J, plus the Chief Executive Officer of the Combined Company. Messrs. Halverson and Wille also indicated that the exchange ratio and other key terms in the merger transaction would be negotiated on behalf of Keane by the Keane Special Committee and that they believed such exchange ratio should be calculated based on relative trading values without a premium for either side. During that conversation Mr. Murray indicated that he believed that a premium was warranted for C&J due to its limited leverage and cost opportunities yet to be realized on a standalone basis.

On April 19, 2019, the independent directors of the C&J Board met to discuss the earlier meeting with the Keane directors and, following discussion, determined that the independent directors of the C&J Board should engage with the Keane Special Committee to advance negotiations.

On April 20, 2019, Mr. Mueller contacted Mr. Halverson to schedule a meeting with the Keane Special Committee for purposes of discussing the significant transaction terms, including certain social, commercial and economic matters related to the proposed transaction.

 

 

76


Table of Contents

Also on April 20, 2019, during a discussion among Messrs. Murray, Halverson and Wille, Mr. Murray indicated that the C&J Board did not believe that Keane’s proposed exchange ratio factored in all of the benefits that would be realized by the Combined Company with respect to a transaction with C&J. Mr. Wille indicated that the Keane Special Committee would revert to C&J with respect to the exchange ratio, and reiterated the corporate governance and management structure previously proposed on April 18, 2019 by Messrs. Wille and Halverson to Messrs. Murray, Mueller, Zawadzki and Brightman. Mr. Murray indicated that the C&J Board believed that the parties should first focus on the proposed exchange ratios, with discussion and negotiation of corporate governance and management structure to follow.

On April 23, 2019, the Keane Special Committee met with Keane management, representatives of Lazard, the proposed financial advisor to the Keane Special Committee, and representatives of Simpson Thacher & Bartlett LLP (“Simpson”), the legal advisor to the Keane Special Committee, to discuss the current status of discussions with C&J and Company A. Representatives from Lazard made a presentation to the Keane Special Committee addressing publicly available financial metrics and analyst estimates for both Keane and C&J and illustrative frameworks for its financial analyses. Keane management shared their perspectives on potential transactions with C&J and Company A. After Lazard and Keane management left the meeting, Simpson delivered a presentation relating to the Keane Special Committee’s mandate, certain governance matters and board duties, roles and responsibilities in connection with any potential transaction. After discussion, including with respect to Lazard’s historical relationship with Keane, C&J, Cerberus and other interested parties, the Keane Special Committee determined to engage Lazard as its financial advisor. The Keane Special Committee requested that Lazard prepare an evaluation of the potential combination of Keane and C&J, including potential synergies that could be realized, relative valuation, transaction structure and other considerations.

Following the April 23, 2019 Keane Special Committee meeting, the Keane management team and Keane Board ceased negotiations with Company A, determining it was in the best interest of Keane, after analyzing a potential alternative transaction with Company A and conducting due diligence on the businesses of each of Company A and C&J, to pursue a transaction with C&J.

On April 24, 2019, members of C&J management and Keane management, together with Kirkland and Schulte, held a meeting to discuss the framework and process for a reciprocal legal due diligence review in connection with a potential combination transaction. Over the next few weeks, members of C&J management and Keane management, together with certain of their respective advisors, participated in a series of meetings to discuss certain commercial, operational, financial and legal due diligence related to C&J and Keane.

Also on April 24, 2019, members of the Keane Special Committee, the Keane Board, Keane management and financial and legal advisors for the Keane Special Committee and Keane met to discuss the diligence process as well as key commercial, economic and governance issues.

On April 25, 2019, the independent directors of the C&J Board met to discuss the topics to be covered in the meeting with the Keane Special Committee, which was scheduled for the following morning.

Also on April 25, 2019, members of the Keane Special Committee, the Keane Board, Keane management and financial and legal advisors for the Keane Special Committee and Keane met to discuss due diligence and open commercial and social issues.

On April 26, 2019, the members of the Keane Special Committee met, with representatives of Lazard and Simpson in attendance, to discuss the upcoming meeting with the independent directors of the C&J Board. Later that day, certain members of the C&J Board met with certain members of the Keane Special Committee to discuss the commercial and economic aspects of the transaction. The Keane Special Committee stated that an ownership allocation of the Combined Company reflecting then current trading prices (which was approximately 54% in favor of Keane stockholders) was appropriate.

 

 

77


Table of Contents

On April 29, 2019, the independent directors of the C&J Board met to discuss the topics covered during the April 26, 2019 meeting with the members of the Keane Special Committee.

Also on April 29, 2019, members of the Keane Special Committee, the Keane Board and Keane management met with representatives of Citi, Lazard, Schulte and Simpson to discuss the status of negotiations and Keane’s approach to the negotiations going forward.

On April 30, 2019, the C&J Board held a regularly scheduled meeting with certain members of C&J management and representatives from Kirkland in attendance, at which, among other topics, the status of negotiations was discussed. At the meeting, representatives from Kirkland presented to the C&J Board on their fiduciary duties and other considerations with respect to a potential merger transaction.

On each of April 26, 2019 and May 1, 2019, representatives from each of C&J and Keane management met to discuss certain operational and financial matters relating to the companies.

On May 1, 2019, the Keane Board held a regularly scheduled monthly board update call with Keane management where, among other topics, a potential merger of equals with C&J was discussed. The Keane Special Committee also met that day to discuss the status of negotiations and open action items.

Also, on May 1, 2019, Mr. Murray and C&J management met to discuss the status of discussions and due diligence with Keane. Mr. Murray also met with representatives of Morgan Stanley to discuss the status of negotiations, specifically including the parties’ respective positions on relative value and ownership of the Combined Company, between the C&J Board and Keane Special Committee.

On May 3, 2019, the Keane Special Committee met, with representatives of Simpson, Lazard and Keane management in attendance. Lazard presented materials with respect to its preliminary financial analyses of the proposed transaction with C&J.

On May 6, 2019, each of C&J and Keane granted the other additional access to a “virtual data room,” allowing the companies’ legal advisors to initiate, and the companies’ financial advisors to continue, their review of the previously requested due diligence documentation.

On May 7, 2019, Ms. Hunter updated the C&J Board as to the status of the ongoing due diligence process and discussions with Keane.

On May 9, 2019, following Keane’s 2019 Annual Meeting, the Keane Board held a regular meeting where, among other topics, the potential merger of equals with C&J was discussed. The Keane Special Committee also met that day with its financial and legal advisors and Keane management to discuss C&J’s May 7, 2019 earnings release and its potential impact on relative valuation discussions. In light of the significant synergies and other compelling rationales for a combination, the Keane Special Committee determined to propose an equity split based on then current trading prices. The Keane Special Committee agreed that Mr. Halverson would contact Mr. Murray to convey the proposal.

On May 13, 2019, Mr. Halverson contacted Mr. Murray to discuss Keane’s position on certain key points of the proposed transaction, including the proposed equity split. Messrs. Murray and Halverson decided to schedule a meeting of the C&J independent directors and the Keane Special Committee to discuss further with the goal of reaching an agreement in principle on the exchange ratio and resulting equity split of the Combined Company.

On May 17, 2019, certain of the independent directors of the C&J Board met with the Keane Special Committee to discuss a potential mutually agreeable exchange ratio. It was determined that negotiation of other key non-economic and governance issues could move forward once an equity split was agreed.

Later on May 17, 2019, members of the C&J Board and the Keane Special Committee discussed the acceptability of an exchange ratio reflecting current trading prices, which implied an approximately 50% / 50% equity split.

 

78


Table of Contents

On May 19, 2019, representatives of Schulte sent Kirkland initial drafts of the Merger Agreement and Support Agreement. The draft Merger Agreement reflected, among other things, reciprocal representations, warranties and interim operating covenants, and a customary termination fee payable by either C&J or Keane in the event the Merger Agreement is terminated in certain situations, including permitting each party to terminate in order to enter into a superior proposal after satisfying certain conditions set forth in the Merger Agreement. The draft Support Agreement provided that Keane Investor would vote its shares of Keane Common Stock in favor of the transaction unless there was a Change of Recommendation by the Keane Special Committee and Keane Board.

On May 20, 2019, members of the nominating and governance committee of Keane met with Mr. Gawick and on May 22, 2019, the independent directors of C&J met with Mr. Drummond, to evaluate them as candidates to be the Chief Executive Officer of the Combined Company.

Also on May 20, 2019, the Keane Special Committee met, with representatives of Simpson and Lazard in attendance, to discuss the current status of negotiations and next steps, including memorializing the terms discussed on May 17, 2019 in a written correspondence to the C&J Board.

On May 22, 2019, the C&J Board received from Ms. Hunter an update regarding transaction process and timing.

Also on May 22, 2019, the Keane Special Committee sent a letter to the C&J Board outlining the terms discussed on May 17, 2019, including a 50% / 50% equity split, corporate governance and management structure. The Keane Special Committee’s proposal included a Combined Company Board composition of five designees from each of C&J and Keane, with four independent C&J directors and three independent Keane directors, plus the Chief Executive Officer. The Keane Special Committee’s letter indicated that Mr. Murray would be the Chairman of the Combined Company Board, Mr. Drummond would be the Chief Executive Officer, Mr. Powell would be the Chief Integration Officer and Mr. van Gaalen would be the Chief Financial Officer.

On May 24, 2019, the C&J Board held a previously scheduled meeting, with representatives of C&J management, Kirkland and Morgan Stanley in attendance, to discuss the May 19, 2019 draft of the Merger Agreement and Support Agreement and certain transaction terms relating thereto. Representatives from Kirkland provided an overview of the terms of the draft Merger Agreement and Support Agreement as well as proposed revisions thereto. The C&J Board discussed the Merger Agreement and Support Agreement in detail and discussed other topics related to the potential transaction with Keane. During the same meeting, representatives from Morgan Stanley provided an overview of financing considerations relating to a potential transaction as well as a general process overview and update.

Later on May 24, 2019, representatives from Kirkland sent revised drafts of the Merger Agreement and Support Agreement to Schulte. The draft Merger Agreement included a “force the vote” provision requiring Keane to submit the transaction to its stockholders regardless of a Change of Recommendation by the Keane Board, no “force the vote” provision for C&J and a reciprocal termination fee of 3% of C&J’s equity value. In addition, the draft Support Agreement required Keane Investor to vote its shares of Keane Common Stock in favor of the transaction regardless of a Change of Recommendation by the Keane Board and subjected Cerberus to an 18-month standstill and a six-month lockup.

On May 26, 2019, representatives from Schulte sent Kirkland revised drafts of the Merger Agreement and Support Agreement and an initial draft of the Stockholders’ Agreement. The draft Merger Agreement, among other things, removed the “force the vote” provision requiring Keane to submit the transaction to its stockholders regardless of a Change of Recommendation by the Keane Board and reflected Keane’s proposals concerning corporate governance and management composition. The draft Support Agreement provided that Keane Investor would not be required to vote its shares of Keane Common Stock in favor of the Keane Merger Proposal if there was a Change of Recommendation by the Keane Board, reduced the proposed 18-month standstill provision to twelve months and removed the lockup provision.

 

79


Table of Contents

Also on May 26, 2019, Schulte held a telephone discussion with counsel to Company B regarding the timetable of a potential alternative transaction with Keane.

On May 27, 2019, representatives of Citi, Lazard and Morgan Stanley, at the direction of C&J and Keane management, engaged in discussions concerning the requested post-closing lockup of Cerberus.

On May 27 and 28, 2019, the Keane Special Committee met with its legal and financial advisors to discuss open points on the definitive documentation and due diligence.

On May 28, 2019, the C&J Board held a meeting, with representatives of C&J management in attendance, to review Keane’s comments to the Merger Agreement, the Support Agreement and the Stockholders’ Agreement. As part of this discussion, the C&J Board discussed a number of matters, including the appropriate equity ownership for C&J stockholders in the Combined Company and the challenges in evaluating relative values given the volatile market and divergent stock prices. The C&J directors also discussed that the C&J Board should seek a premium for C&J stockholders in order to reflect the full value C&J would bring to the transaction. In addition, the C&J Board determined that the Support Agreement needed to include a provision whereby Cerberus would be subject to a lockup for a reasonable period of time. The C&J Board agreed that it would be appropriate for Mr. Murray to reach out again to the Keane Special Committee to relay C&J’s proposal for a 52% / 48% ownership structure of the Combined Company in favor of C&J stockholders, equal board composition and a post-closing lockup period with respect to Cerberus.

Later on May 28, 2019, certain members of the C&J Board met with the Keane Special Committee to discuss C&J’s proposal and position on the significant transaction terms. The discussion focused on the economic terms of the proposed transaction and the C&J Board’s position that C&J stockholders should receive a premium in light of the benefits C&J would provide to the Combined Company. In addition, the members of the C&J Board also proposed that the Support Agreement include a provision whereby Cerberus would be subject to a six-month lockup. The parties also discussed C&J’s proposal that the Combined Company Board should be comprised of equal representatives from C&J and Keane. Mr. Halverson communicated to Mr. Murray that the Keane Special Committee would consider C&J’s proposals, but indicated that the Keane Special Committee would only move forward with an exchange ratio reflecting a 50% / 50% equity split.

On May 29, 2019, the Keane Special Committee held a meeting, in which representatives of Simpson and Schulte also participated, to update the Cerberus board representatives about the latest terms proposed by C&J during its meeting on May 28, 2019 with the Keane Special Committee. The participants discussed the corporate governance and management structure of the Combined Company and the anticipated changes in compensation arrangements for the Keane management team to align them with the compensation arrangements for the C&J management team. The compensation committee of the Keane Board reviewed and approved changes to the employment agreements of the Keane management team.

Later on May 29, 2019, the independent directors of the C&J Board met to receive an update regarding Mr. Murray’s most recent conversation with Mr. Halverson, as well as to review the May 28, 2019 meeting with the Keane Special Committee. The C&J independent directors specifically discussed the equity split proposed by the C&J Board at the May 28, 2019 meeting with the Keane Special Committee and, following discussion, confirmed their position that a premium in favor of C&J stockholders was appropriate. This position was communicated to Mr. Halverson following the C&J board meeting.

Later on May 29, 2019, the Keane Special Committee and certain members of the C&J Board held a meeting during which the Keane Special Committee accepted a Combined Company Board comprised of twelve directors, with equal representation from each of C&J and Keane. The members of the C&J Board reiterated the C&J Board’s proposal of an exchange ratio reflecting a 52% / 48% equity split in favor of the C&J stockholders and a requirement that Cerberus sign a lock-up agreement.

 

80


Table of Contents

Later on May 29, 2019, the Keane Special Committee held a meeting with certain other members of the Keane Board, Keane management and financial and legal advisors to discuss C&J’s proposed exchange ratio reflecting a 52% / 48% equity split. Based on the recommendation of the Keane Special Committee, Keane determined to reject C&J’s proposal and terminate discussions about a potential transaction.

On May 30, 2019, Keane delivered a notice to C&J requesting the destruction of confidential information received in connection with the proposed transaction and informing C&J that Keane no longer wished to pursue a business combination. Later on May 30, 2019, the C&J Board held a regularly scheduled meeting at which it discussed, among other matters, the notice letter delivered by Keane. Following this meeting, C&J also delivered a similar notice to Keane requesting the destruction of confidential information received in connection with the proposed transaction and informing Keane that C&J no longer wished to pursue a business combination.

On June 4, 2019, Mr. Wille contacted Mr. Zawadzki to discuss the industrial logic behind a combination and potential paths forward with respect to the proposed transaction. During this discussion, Mr. Zawadzki indicated to Mr. Wille that C&J would be willing to continue negotiations with Keane provided that the equity split was such that C&J stockholders received a reasonable premium to reflect the attributes C&J would bring to the Combined Company. In addition, Mr. Zawadzki also noted that C&J believed that Cerberus should enter into a customary lockup due to its post-closing ownership position in the Combined Company. Mr. Wille agreed that Cerberus would consider a reasonable lockup and that the corporate governance structure of the Combined Company should include generally equal representation from each of C&J and Keane. Mr. Zawadzki suggested to Mr. Wille that any revised proposal be communicated to Mr. Murray by the Keane Special Committee.

Later on June 4, 2019, the C&J Board met to discuss Mr. Wille’s conversation with Mr. Zawadzki regarding resuming negotiations with Keane.

On June 5, 2019, the Keane Special Committee met, with representatives of Simpson and Lazard in attendance, to discuss a counterproposal to C&J. Following that meeting, Mr. Halverson, representing the Keane Special Committee, reached out to Mr. Murray to discuss re-engaging in negotiations. Mr. Halverson also outlined Keane’s positions with respect to the key transaction points and indicated that a revised proposal reflecting these positions would be forthcoming.

Later on June 5, 2019, Mr. Edwards contacted Mr. Murray to outline Keane’s proposal of an exchange ratio reflecting a 50% / 50% equity split, with the option for C&J to pay a cash dividend of up to $0.50 per share to the C&J stockholders prior to the effective time of the merger, a Combined Company Board composition of eleven directors consisting of five C&J designees, five Keane designees and the Keane Chief Executive Officer, and the willingness of Cerberus to agree to a lock-up of 45 days post-closing. These terms were confirmed in a letter from the Keane Special Committee to the C&J Board on June 6, 2019.

Later on June 5, 2019, the C&J Board met to discuss Mr. Murray’s discussions with Messrs. Halverson and Edwards and the significant points of Keane’s revised proposal.

On June 6, 2019, the C&J Board met to discuss the June 6, 2019 proposal received from the Keane Special Committee. The discussion focused on the value being provided to C&J stockholders in light of an exchange ratio reflecting a 50% / 50% equity split and the proposed dividend. Among other matters, the need for equal representation in the governance structure of the Combined Company was also discussed, as well as the appropriate lockup period with respect to Cerberus. After discussion, the C&J Board determined that Mr. Murray would reach out to Mr. Halverson to convey C&J’s interest in resuming negotiations and its initial reaction to the Keane proposal.

On June 7, 2019, Messrs. Wille and Drummond met with Company B to discuss a potential combination.

Also on June 7, 2019, Mr. Murray reached out to Mr. Halverson to convey that the C&J Board was reviewing Keane’s proposal in full and would provide a formal response in the coming days. Mr. Murray

 

81


Table of Contents

indicated the C&J Board’s initial view that the dividend needed to be at least $1.00 per share. Mr. Murray also indicated that the C&J Board was unwilling to consider a Combined Company Board structure that did not reflect equal representation of C&J and Keane. Mr. Halverson stated that he would update the Keane Special Committee.

Also on June 7, 2019, the Keane and C&J management teams re-engaged in business and commercial due diligence, and Schulte and Kirkland held a discussion regarding the completion of the legal due diligence process.

On June 8, 2019, Mr. Halverson contacted Mr. Murray to convey that the Keane Special Committee had considered the C&J Board’s verbal, preliminary counter proposal. Mr. Halverson indicated that the Keane Special Committee was amenable to permitting the C&J Board to declare a dividend of up to $1.00 per share to C&J stockholders, as well as a twelve member board consisting of six representatives from C&J (including the Chairman) and six representatives from Keane (including the Chief Executive Officer).

Later on June 8, 2019, the C&J Board met to discuss Mr. Halverson’s discussion with Mr. Murray on both June 7 and 8, 2019, and to further review the other terms of the Keane Special Committee’s June 6, 2019 proposal.

On June 10, 2019, the C&J Board met to further discuss the terms of the Keane Special Committee’s June 6, 2019 proposal and C&J’s proposed responses. Representatives from Morgan Stanley were also present. Following discussion, the C&J Board determined that it was prepared to proceed with the transaction on the basis of an exchange ratio reflecting a 50% / 50% equity split, a 45 day lockup period with respect to Cerberus, and equal representation with respect to corporate governance, provided that Keane also agreed to permit a pre-closing dividend of at least $1.00 per share to C&J stockholders. The C&J Board instructed Morgan Stanley to prepare additional analysis regarding the appropriate value of the dividend.

Later on June 10, 2019, certain members of the C&J Board met with C&J management to receive an update on the status of discussions and due diligence with Keane.

Also on June 10, 2019, the Keane Special Committee held a meeting, with representatives of Lazard and Simpson in attendance, to discuss the status of discussions with C&J.

On June 11, 2019, the C&J Board met and determined to deliver a letter to the Keane Special Committee outlining C&J’s response to Keane’s June 6, 2019 proposal. The letter stated that, subject to negotiation of the definitive documentation and to finalization and agreement with respect to integration planning and implementation, the C&J Board was prepared to agree to an exchange ratio reflecting a 50% / 50% equity split, but proposed an increase to the permitted cash dividend to C&J stockholders from $0.50 per share to $1.00 per share. In addition, among other matters addressed, the response letter also proposed that the Combined Company Board consist of twelve members, whereby C&J would appoint six directors (including the chairman) and Keane would appoint six directors (including the chief executive officer). Additionally, the C&J letter proposed ownership thresholds below which Cerberus’ board appointment rights would fall away to account for Cerberus’ reduced ownership interest in the Combined Company.

Also on June 11, 2019, the Keane Special Committee met with representatives of Lazard and Simpson to discuss Lazard’s ongoing work with respect to its financial analyses of the transaction and C&J’s letter received earlier in the day. The Keane Special Committee, members of the Keane Board, and representatives of Lazard, Citi, Schulte and Simpson subsequently met to discuss the Keane Special Committee’s contemplated response to the C&J letter and the remaining transaction issues. The Keane Special Committee and Keane Board agreed that the C&J counterproposal was broadly acceptable, subject to review of proposed documents from Kirkland, finalization of compensation and severance matters, and agreement with respect to the fall-away of Cerberus’ board appointment rights.

 

82


Table of Contents

Also on June 11, 2019, Mr. Halverson conveyed to Mr. Murray that the Keane Special Committee was considering C&J’s counter proposal and indicated his belief that the parties would be able to reach an agreement on the remaining outstanding issues raised in C&J’s June 11, 2019 letter.

On June 12, 2019, both C&J and Keane reopened their respective “virtual data rooms,” allowing the companies’ legal and financial advisors to continue their confidential review of the previously requested documentation and complete their due diligence. Over the next few days, each of C&J and Keane’s legal and financial advisors worked together closely to complete the reciprocal due diligence review and prepare their respective disclosure letters to the Merger Agreement. Also on June 12, 2019, the Keane Special Committee met, with Keane management and representatives of Lazard, Simpson, Schulte and Citi in attendance, to discuss the current status of definitive documents, legal due diligence and path to a potential signing.

On June 13, 2019, representatives from Kirkland sent revised drafts of the Merger Agreement, Support Agreement and Stockholders’ Agreement to Schulte reflecting the terms mutually agreed upon, as outlined in C&J’s June 11, 2019 letter, including, among other matters, the exchange ratio reflecting a 50% / 50% equity split, a permitted cash dividend to C&J stockholders of $1.00 per share and a mutual “force the vote” provision requiring each party to submit the transaction to its stockholders regardless of a Change of Recommendation by their respective boards. Later on June 13, 2019, representatives from Schulte sent revised drafts of the Merger Agreement, Support Agreement and Stockholders’ Agreement to Kirkland reflecting changes subsequently agreed upon between the parties.

Also on June 13, 2019, the Keane Special Committee met with representatives of Lazard and Simpson in attendance. Lazard presented its updated financial analysis of the transaction, and answered questions from the committee members concerning their analyses. Lazard also reviewed prior discussions between various Keane Board and Keane management representatives with other potential transaction counterparties and the outcome of such discussions. Simpson reviewed the duties of the committee members in the context of the proposed transaction and the committee’s mandate, and provided a detailed summary of the terms of the Merger Agreement, the Support Agreement and the Stockholders’ Agreement and the proposed process and timing for finalizing the transaction documents.

Later on June 13, 2019, the Keane Board held a meeting, with representatives of Keane management, Schulte and Citi in attendance, to discuss the potential transaction with C&J. Keane management presented its views regarding the strategic logic of the transaction as well as the business and commercial diligence completed, as well as its expectations concerning the quantum and timing of cost-out synergies that could be achieved from combining the two companies. Representatives of Schulte provided a presentation concerning the duties of the Keane directors in the context of the proposed transaction, and a detailed summary of the terms of the Merger Agreement, the Support Agreement and the Stockholders’ Agreement. Representatives of Citi presented their valuation analyses of both Keane and C&J, and answered questions from the members of the Keane Board concerning their analyses. Following this presentation, Mr. Edwards, on behalf of the Keane Special Committee, reviewed the work that had been completed by and on behalf of the Keane Special Committee, including by Lazard, and that the Keane Special Committee expected to support entry into the transaction should it be presented to it for approval at a forthcoming meeting, subject to resolution of remaining issues.

Also on June 13, 2019, Schulte circulated revised drafts of the Merger Agreement, Support Agreement and Stockholders’ Agreement to Kirkland.

On June 14, 2019, Messrs. Drummond and Gawick met to discuss execution and integration challenges relating to the proposed combination, including employee retention and other governance issues.

Also on June 14, 2019, the C&J Board held a meeting, with representatives of C&J management, Kirkland and Morgan Stanley in attendance, to discuss the potential transaction with Keane and to receive a fulsome update regarding the transaction from Morgan Stanley and Kirkland. Representatives from Morgan Stanley

 

83


Table of Contents

presented a preliminary valuation analysis for both C&J and Keane and answered questions from the C&J Board relating thereto. Following Morgan Stanley’s discussion, representatives from Kirkland provided a detailed summary of the terms of the Merger Agreement and the proposed process and timing for finalizing the Merger Agreement and the other transaction documents required for signing. In addition, representatives from Kirkland provided a description of the legal due diligence review undertaken to date, highlighting certain items for consideration by the C&J Board. Following these presentations, members of the C&J Board asked a number of detailed questions relating to the Merger Agreement and other transaction documents, transaction process and legal due diligence findings, which were discussed at length with representatives of C&J management, Morgan Stanley and Kirkland. The C&J Board scheduled its next meeting for June 16, 2019, at which time the C&J Board intended to receive an update on the items discussed in the June 14, 2019 board meeting and to vote on the approval of the Merger Agreement, assuming that the documents and diligence were finalized in a satisfactory manner.

Also on June 14, 2019, Schulte, Kirkland, and Keane and C&J in-house counsel convened a legal due diligence bring-down call to resolve all outstanding legal due diligence requests.

On June 15, 2019, representatives from Kirkland sent revised drafts of the Merger Agreement, Support Agreement and Stockholders’ Agreement to Schulte, and Kirkland, Schulte and internal counsel continued legal diligence.

On June 16, 2019, representatives from Schulte sent a revised draft of the Merger Agreement to Kirkland with certain changes discussed between the parties. During this same time period, representatives from each of Keane, Schulte, C&J and Kirkland held several meetings to finalize the outstanding terms of the Merger Agreement and to address outstanding due diligence items. Representatives from Kirkland then circulated proposed final drafts of the Merger Agreement, Support Agreement and Stockholders’ Agreement to Schulte.

Also on June 16, 2019, the independent directors of the C&J Board met with Ms. Hunter to discuss the status of negotiations, particularly with respect to the Merger Agreement and disclosure letters. Certain social and governance issues were also discussed.

Also on June 16, 2019, the Keane Special Committee met, with representatives of Lazard and Simpson in attendance. At the meeting, representatives from Lazard provided an updated presentation of its financial analysis and then, at the request of the committee, rendered its oral opinion, subsequently confirmed in writing by delivery of a written opinion, also dated June 16, 2019, to the Keane Special Committee, that, as of such date, and based upon and subject to the assumptions, procedures, factors, qualifications and limitations set forth therein, the Exchange Ratio provided for in the business combination was fair, from a financial point of view, to Keane. Following further discussion, the Keane Special Committee unanimously (i) determined that the Merger Agreement and the related transactions were fair to, and in the best interests of, Keane and the holders of shares of Keane Common Stock (other than Keane Investor and its affiliates) and recommended submission of the Merger Agreement and the related transactions to the Keane Board, and (ii) recommended that the Keane Board approve the Merger Agreement and the related transactions, and determine that the Merger Agreement and the related transactions are advisable, fair to, and in the best interests of, Keane and the holders of shares of Keane Common Stock.

Also on June 16, 2019, the Keane Board held two meetings, with Keane management, Schulte and Citi participating. At the initial meeting there was a discussion of developments since the June 13, 2019 Keane board meeting, including the remaining outstanding social and governance issues. Following the resolution of these issues, the Keane Board held its second meeting, again with Schulte and Citi participating. At the meetings, representatives from Citi provided an updated financial analysis of the Exchange Ratio and then rendered its oral opinion to the Keane Board (which was subsequently confirmed by delivery of Citi’s written opinion addressed to the Keane Board dated the same date) as to the fairness, from a financial point of view, to Keane of the Exchange Ratio specified in the Merger Agreement, as of June 16, 2019 and taking into account the Pre-closing Cash Dividend and subject to various assumptions made, procedures followed, matters considered and

 

84


Table of Contents

limitations and qualifications on the review undertaken. Mr. Edwards, on behalf of the Keane Special Committee, stated that the Keane Special Committee had received the favorable opinion of Lazard as to the fairness, from a financial point of view, to Keane of the Exchange Ratio specified in the Merger Agreement, and that the Keane Special Committee unanimously recommended that the Keane Board approve the Merger Agreement and the related transactions. Following further discussion, the Keane Board unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the merger and the share issuance, on the terms set forth in the Merger Agreement, were fair to, and in the best interests of, Keane and the holders of shares of Keane Common Stock, (ii) approved and declared advisable the Merger Agreement and the transactions contemplated thereby, including the merger, on the terms and subject to the conditions set forth in the Merger Agreement, (iii) directed that the share issuance be submitted to the holders of shares of Keane Common Stock for their approval and (iv) resolved to recommend that the Keane stockholders approve the share issuance.

Later on June 16, 2019, the members of the C&J Board held a meeting, with representatives of C&J management, Kirkland and Morgan Stanley in attendance, to receive an update on the matters discussed during the preceding June 14, 2019 board meeting, including the proposed final terms of the Merger Agreement. At the meeting, representatives from Morgan Stanley provided an explanation of the financial analysis of the proposed transaction and then rendered its oral opinion, subsequently confirmed by delivery of a written opinion, dated June 16, 2019, that, as of that date and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in the written opinion, taking into account the payment of the Pre-closing Cash Dividend, the Exchange Ratio pursuant to the Merger Agreement was fair from a financial point of view to the holders of shares of C&J Common Stock (other than holders of C&J Excluded Shares). Representatives from Kirkland also presented a summary of the proposed final terms of the Merger Agreement as well as an overview of the legal due diligence conducted. Following a discussion of these matters, the C&J Board unanimously (i) determined that the Pre-closing Cash Dividend, the Merger Agreement and the transactions contemplated thereby, including the merger, were in the best interests of C&J and its stockholders, (ii) approved the Pre-closing Cash Dividend (subject to a determination by the C&J Board that surplus exists under Delaware law), the Merger Agreement, the Support Agreement, the Stockholders’ Agreement, the performance by C&J of its covenants and agreements contained therein, the execution and delivery of the Merger Agreement, the Support Agreement and the Stockholders’ Agreement and the consummation of the transactions contemplated by the Merger Agreement, (iii) directed that the Merger Agreement be submitted to C&J stockholders for approval and adoption at the C&J Special Meeting and (iv) resolved to recommend that C&J stockholders approve and adopt the Merger Agreement.

Following approval by the C&J Board, the Keane Board and the Keane Special Committee, the parties executed the Merger Agreement and the Support Agreement.

On June 17, 2019, C&J and Keane each filed a Current Report on Form 8-K with the SEC announcing the entry into the Merger Agreement and held a joint conference call to announce the transaction before the market opened.

Recommendation of the C&J Board and Reasons for the Merger

At a meeting held on June 16, 2019, the C&J Board unanimously: (i) determined that the Merger Agreement, the merger and the other transactions contemplated by the Merger Agreement, are fair to, and in the best interests of, C&J and the holders of shares of C&J Common Stock, (ii) approved and declared advisable the Merger Agreement, the merger and the other transactions contemplated by the Merger Agreement, on the terms and conditions set forth in the Merger Agreement, (iii) directed that the Merger Agreement, the merger and the other transactions contemplated by the Merger Agreement be submitted to the holders of shares of C&J Common Stock for their adoption, and (iv) subject to the terms and conditions of the Merger Agreement, resolved to recommend that the holders of shares of C&J Common Stock vote in favor of the adoption of the Merger Agreement, the merger and the other transactions contemplated by the Merger Agreement.

 

85


Table of Contents

ACCORDINGLY, THE C&J BOARD HAS APPROVED THE MERGER AGREEMENT, THE MERGER AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT, AND UNANIMOUSLY RECOMMENDS THAT C&J STOCKHOLDERS VOTE “FOR” THE PROPOSAL TO ADOPT THE MERGER AGREEMENT, THE MERGER AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT.

In reaching its decision to approve and declare advisable the Merger Agreement, the merger and the other transactions contemplated by the Merger Agreement, the C&J Board, as described in “—Background of the Merger,” held a number of meetings, consulted with C&J management and its respective outside legal and financial advisors, Kirkland and Morgan Stanley, and considered the business, assets and liabilities, results of operations, financial performance, strategic direction and prospects of C&J and Keane. At its meeting held on June 16, 2019, after due consideration and consultation with C&J management and outside legal and financial advisors, the C&J Board unanimously approved and declared advisable the Merger Agreement, the merger and the other transactions contemplated by the Merger Agreement and recommended that C&J stockholders vote in favor of the adoption of the Merger Agreement, the merger and the other transactions contemplated by the Merger Agreement.

In making its determination, the C&J Board focused on a number of factors, including the following:

 

   

the Combined Company would have significant scale and value as a large, diversified well completion and production services company with a strong presence in the most active U.S. basins, as well as an enhanced financial position, with a strong balance sheet capable of enabling opportunities for further innovation and financial flexibility;

 

   

the expectation that the Combined Company would generate $100 million of expected annualized run-rate cost synergies based on cost reductions and streamlining the Combined Company’s selling, general & administrative expenses, supply chain management and operational footprint;

 

   

the expectation that the Combined Company would have runway for earnings growth via revenue generation from idle, market ready equipment and improved efficiencies from increased basin density and leveraging overhead, creating a more attractive investment opportunity;

 

   

the expectation that, after the payment of certain one-time transaction costs, including severance costs, to be incurred in connection with the transaction, the merger would be immediately accretive to cash flow per share with greater potential for increased operating cash flow generation;

 

   

the structure of the transaction as a merger of equals with terms negotiated in the Merger Agreement providing that:

 

   

the Combined Company Board will include the C&J Designees and Keane Designees, including the Keane CEO;

 

   

the C&J Chairman prior to the effective time will serve as the chairman of the Combined Company Board as of the effective time;

 

   

the Keane CEO prior to the effective time will serve as the chief executive officer of the Combined Company as of the effective time and C&J’s chief financial officer prior to the effective time will serve as the executive vice president and chief financial officer of the Combined Company as of the effective time;

 

   

the initial composition of the audit and risk committee, the compensation committee, the compliance committee and the nominating and corporate governance committee will be mutually agreed upon by C&J and Keane prior to the effective time and will include equal representation from both the C&J Designees and the Keane Designees;

 

   

a pre-closing integration team, led by the respective chief executive officers and chief financial officers of C&J and Keane will mutually develop an integration plan to identify synergies and

 

86


Table of Contents
 

adopt best practices for the Combined Company and its subsidiaries following the effective time; and

 

   

a post-closing integration team, led by the executive vice president and chief integration officer and executive vice president and chief financial officer of the Combined Company (each reporting directly to the chief executive officer of the Combined Company), will mutually implement and further development the integration plan for the Combined Company and its subsidiaries following the effective time;

 

   

that the Exchange Ratio of 1.6149 shares of Keane Common Stock for each share of C&J Common Stock is fixed, consistent with the principles underlying the merger of equals structure for the transaction;

 

   

that the merger and the all-stock consideration offered in connection therewith will provide C&J stockholders with ownership of approximately 50% of the Combined Company (based on fully diluted shares outstanding of the Combined Company) and therefore allow C&J stockholders to participate in the equity value of the Combined Company, including future growth and the expected cost synergies resulting from the merger;

 

   

that the Merger Agreement permits C&J to make the Pre-closing Cash Dividend of $1.00 per share of C&J Common Stock to the holders of record as of the record date for the Pre-closing Cash Dividend, subject to the C&J Board determining that the surplus of C&J exceeds the amount of the aggregate Pre-closing Cash Dividend;

 

   

Morgan Stanley’s oral opinion, subsequently confirmed by delivery of a written opinion, dated June 16, 2019, that, as of that date and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in the written opinion, taking into account the payment of the Pre-closing Cash Dividend, the Exchange Ratio pursuant to the Merger Agreement was fair from a financial point of view to the holders of shares of C&J Common Stock (other than holders of C&J Excluded Shares), as more fully described under “—Opinion of C&J’s Financial Advisor” and the full text of the written opinion of Morgan Stanley, which is attached as Annex B to this joint proxy statement/prospectus;

 

   

the information and discussions with C&J management and outside legal and financial advisors regarding each of C&J’s and Keane’s business, assets, financial condition, results of operations, current business strategy and prospects, including the projected long-term financial results of each of C&J and Keane as a stand-alone company, the size and scale of the Combined Company and the expected pro forma effect of the merger on the Combined Company and its ability to achieve future growth and generate additional returns for C&J stockholders;

 

   

the alignment of complementary cultures and operating philosophies, including a shared commitment to safety and integrity, employee development, partnerships with blue-chip customers, operating efficiency and service quality, technological innovation, and community relationships;

 

   

the expectation that the Combined Company would be positioned for continued innovation and investment, as the merger would combine C&J’s and Keane’s shared legacy of innovative research & development and a rich portfolio of proprietary technology capable of driving safety, value and operational efficiency and improving the Combined Company’s ability to invest in next generation opportunities in hydraulic fracturing;

 

   

the anticipated customer, supplier, employee and other key stakeholder reaction to the merger;

 

   

the ability of C&J stockholders to approve or reject the merger by voting on the adoption of the Merger Agreement;

 

   

the significance that Keane Investor, which owns approximately 49.2% of the outstanding shares of Keane Common Stock, and Cerberus have entered into the Support Agreement, obligating such stockholders to, subject to the terms and conditions of the Support Agreement, (i) vote all shares of

 

87


Table of Contents
 

Keane Common Stock held by them (a) in favor of the issuance of shares of Keane Common Stock to C&J stockholders pursuant to the Merger Agreement and (b) against (x) any proposal made in opposition to the issuance of shares of Keane Common Stock to C&J stockholders pursuant to the Merger Agreement, (y) any Acquisition Proposal and (z) any action or agreement that would result in a breach of any representation, warranty, covenant or agreement or any other obligation of Keane or Merger Sub under the Merger Agreement or the Support Agreement, as applicable, and (ii) even if there is a Change of Recommendation by Keane, vote the lesser of (a) all of the shares of Keane Common Stock which Keane Investor is the record or beneficial owner or (b) such portion of Keane Common Stock equal to 35% of the aggregate outstanding shares of Keane Common Stock, in each case, as more fully described in “The Merger Agreement—Support Agreement;”

 

   

the C&J Board’s view, after consultation with C&J management and its outside legal advisors, concerning the likelihood that regulatory approvals and clearances necessary to consummate the merger would be obtained, without the imposition of conditions sufficiently material to preclude the merger;

 

   

the expected treatment of the Integrated Mergers as a tax-free reorganization under Section 368(a) of the Code for U.S. federal income tax purposes, as more fully described in “Material U.S. Federal Income Tax Consequences;” and

 

   

the review by the C&J Board with C&J management and outside legal and financial advisors of the structure of the merger and the financial and other terms of the Merger Agreement, including the parties’ representations, warranties and covenants, the conditions to their respective obligations and the termination provisions as well as the likelihood of consummation of the proposed transactions and the evaluation of the C&J Board of the likely time period necessary to complete the merger; the C&J Board also considered the following specific aspects of the Merger Agreement:

 

   

the nature of the closing conditions included in the Merger Agreement, including the reciprocal exceptions to the events that would constitute a material adverse effect on either C&J or Keane for purposes of the Merger Agreement, as well as the likelihood of satisfaction of all conditions to completion of the transactions contemplated by the Merger Agreement;

 

   

that the representations and warranties of C&J or Keane, as well as the interim operating covenants requiring the parties to conduct their respective businesses in the ordinary course prior to completion of the merger, subject to specific limitations, are generally reciprocal;

 

   

the requirement to use reasonable best efforts to obtain approvals or clearances by applicable competition authorities, including by divesting assets, holding separate assets or otherwise taking any other action that would limit C&J’s or Keane’s freedom of action, except to the extent that such action would reasonably be expected to be materially adverse to C&J and its subsidiaries, taken as a whole, or Keane and its subsidiaries, taken as a whole, in each case, from and after the effective time;

 

   

the restrictions in the Merger Agreement on Keane’s ability to respond to and negotiate certain alternative transaction proposals from third parties, and the requirement that Keane pay C&J a $30 million termination fee if the Merger Agreement is terminated under certain circumstances;

 

   

C&J’s right to engage in negotiations with, and provide information to, a third party that makes an unsolicited written bona fide proposal relating to an alternative proposal, if the C&J Board has determined in good faith after consultation with its outside legal counsel that, based on the information then available and after consultation with C&J’s outside financial advisor, (i) such proposal constitutes or could reasonably be expected to result in a transaction that is superior to the merger with Keane and (ii) failure to pursue such proposal would reasonably be expected to be inconsistent with the C&J Board’s fiduciary duties under applicable law; and

 

88


Table of Contents
   

the right of the C&J Board to change its recommendation to C&J stockholders to vote “FOR” the C&J Merger Agreement Proposal if a Superior Proposal is available or an Intervening Event has occurred, subject to certain conditions and fee obligations.

The C&J Board weighed these advantages and opportunities against a number of potentially negative factors in its deliberations concerning the Merger Agreement and the merger, including:

 

   

the risk that Keane’s financial performance may not meet C&J’s expectations;

 

   

the difficulties and management challenges inherent in completing the merger and integrating the business, operations and workforce of C&J and Keane and the risk of not capturing all of the anticipated cost synergies and the risk that other anticipated benefits of the merger might not be realized;

 

   

the amount of time it could take to complete the merger, including that completion of the merger depends on factors outside of C&J’s or Keane’s control, and the risk that the pendency of the merger for an extended period of time following the announcement of the execution of the Merger Agreement could have an adverse impact on C&J and/or Keane, including their respective customer, supplier and other key stakeholder relationships;

 

   

the possible diversion of management and employee attention for an extended period of time during the pendency of the merger;

 

   

the possibility that C&J’s surplus does not exceed the amount of the aggregate Pre-closing Cash Dividend, therefore prohibiting C&J from being able to pay the Pre-closing Cash Dividend to stockholders;

 

   

the risk that, despite the retention efforts of C&J and Keane prior to the consummation of the merger, the Combined Company may lose key personnel;

 

   

the provisions of the Merger Agreement which prohibit C&J from soliciting or entertaining other acquisition offers and the potential payment to Keane by C&J of a termination fee of $30 million, as described in “The Merger Agreement—Termination Fees;”

 

   

the potential negative impact on the market price of C&J Common Stock if the Merger Agreement is terminated, the reason or reasons for such termination and whether such termination results from factors adversely affecting C&J, including (i) the possibility that, as a result of the termination of the Merger Agreement, potential acquirers may consider C&J to be an unattractive acquisition candidate and (ii) the possible sale of C&J Common Stock by short-term investors following announcement that the Merger Agreement was terminated;

 

   

the risk that the $30 million termination fee to which C&J may be entitled, subject to the terms and conditions of the Merger Agreement, if Keane terminates the agreement in certain circumstances may not be sufficient to compensate C&J for the harm that it might suffer as a result of such termination;

 

   

the potential for litigation relating to the merger and the associated costs, burden and inconvenience involved in defending those proceedings;

 

   

that certain provisions of the Merger Agreement, although reciprocal, may have the effect of discouraging alternative proposals involving C&J;