S-4 1 tm2018798-1_s4.htm S-4 tm2018798-1_s4 - none - 86.2982356s
As filed with the Securities and Exchange Commission on June 2, 2020
No. 333-       
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
KLX ENERGY SERVICES HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
1389
(Primary Standard Industrial
Classification Code Number)
36-4904146
(I.R.S. Employer
Identification No.)
1300 Corporate Center Way
Wellington, Florida 33414
(561) 383-5100
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Thomas P. McCaffrey President,
Chief Executive Officer and Chief Financial Officer
KLX Energy Services Holdings, Inc.
1300 Corporate Center Way
Wellington, Florida 33414
(561) 383-5100
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies of all communications, including communications sent to agent for service, should be sent to:
Jonathan L. Mann
General Counsel, Vice President — Law and Corporate Secretary
KLX Energy Services Holdings, Inc.
1300 Corporate Center Way
Wellington, Florida 33414
(561) 383-5100
Valerie Ford Jacob, Esq.
Paul K. Humphreys, Esq.
Freshfields Bruckhaus
Deringer US LLP
601 Lexington Ave.
New York, New York 10022
(212) 277-4000
Max L. Bouthillette
Executive Vice President,
General Counsel and
Chief Compliance Officer
Quintana Energy Services Inc.
1415 Louisiana, Suite 2900
Houston, TX 77002
(832) 518-4094
Frank Bayouth, Esq.
Eric C. Otness, Esq.
Skadden, Arps, Slate,
Meagher & Flom LLP
1000 Louisiana Street
Suite 6800
Houston, Texas 77002
(713) 655-5100
Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement is declared effective and upon completion of the merger described in the joint proxy statement/prospectus contained herein.
If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  ☐ Accelerated filer  ☒ Non-accelerated filer  ☐ Smaller reporting company  ☐
Emerging Growth company  ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐

CALCULATION OF REGISTRATION FEE
Title of each class of securities to be registered
Amount
to be
registered
Proposed
maximum
offering price
per unit
Proposed
maximum
aggregate
offering price
Amount of
registration fee
Common Stock, par value $0.01 per share
18,341,994(1)(2) N/A $ 28,777,694.12(3) $ 3,735.35(4)
(1)
Represents the estimated maximum number of shares of common stock, par value $0.01 per share, of the registrant (“KLXE Common Stock”) to be issued upon completion of the merger, without taking into account the effect of a reverse stock split of KLXE Common Stock, and is based upon the product of (a) an Exchange Ratio in the merger of 0.4844 multiplied by (b) 37,865,387 shares of common stock, par value $0.01 per share, of Quintana Energy Services Inc. (“QES Common Stock”), which is the sum of (i) 34,755,987 shares of QES Common Stock and (ii) 3,109,400 shares of QES Common Stock associated with outstanding QES equity-based awards.
(2)
Pursuant to Rule 416, this registration statement also covers any additional shares of KLXE Common Stock issued or that become issuable from time to time under anti-dilution provisions included in such QES equity-based awards as a result of stock splits, stock dividends and similar events.
(3)
Pursuant to Rules 457(c) and 457(f)(1) promulgated under the Securities Act and solely for the purpose of calculating the registration fee, the proposed aggregate maximum offering price is the product of (i) $0.76 (the average of the high and low prices of QES Common Stock as quoted on the New York Stock Exchange on May 28, 2020) and (ii) 37,865,387 (the estimated maximum number of shares of QES Common Stock that may be exchanged for the merger consideration).
(4)
Computed in accordance with Rule 457(f) under the Securities Act to be $3,735.35, which is equal to .0001298 multiplied by the proposed maximum aggregate offering price of $28,777,694.12.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this joint proxy statement/prospectus is not complete and may be changed. A registration statement relating to the securities described in this joint proxy statement/prospectus has been filed with the U.S. Securities and Exchange Commission. These securities may not be issued until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This joint proxy statement/prospectus does not constitute an offer to sell or the solicitation of offers to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY — SUBJECT TO COMPLETION, DATED JUNE 2, 2020
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MERGER PROPOSAL — YOUR VOTE IS VERY IMPORTANT
Dear Stockholder:
On May 3, 2020, KLX Energy Services Holdings, Inc. (“KLXE”), Quintana Energy Services Inc. (“QES”), Krypton Intermediate, LLC, an indirect wholly owned subsidiary of KLXE (“Acquiror”) and Krypton Merger Sub, Inc., an indirect wholly owned subsidiary of KLXE (“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 in an all stock merger transaction. Pursuant to the Merger Agreement, Merger Sub will merge with and into QES, with QES as the surviving corporation and indirect wholly owned subsidiary of KLXE (the “merger”). Following completion of the merger, the company will retain the KLX Energy Services Holdings, Inc. name and will be headquartered in Houston, Texas. The merger will create an industry-leading provider of asset-light oilfield solutions across the full well lifecycle including drilling, completion and production related products and services.
Upon successful completion of the merger, each issued and outstanding share of QES Common Stock, par value $0.01 per share, will be converted into the right to receive 0.4844 shares (the “Exchange Ratio”) of KLXE Common Stock, subject to adjustment for the reverse stock split of KLXE Common Stock expected to be implemented prior to the consummation of the merger as discussed in this joint proxy statement/prospectus. The Exchange Ratio is fixed and will not be adjusted for changes in the market price of either KLXE Common Stock or QES Common Stock between the signing of the Merger Agreement and the Effective Time of the merger. KLXE stockholders will continue to own their existing shares of KLXE Common Stock. Based on the Exchange Ratio, the number of outstanding shares of QES Common Stock (plus the number of shares underlying outstanding QES phantom units and outstanding QES restricted stock units (but excluding cash settled QES restricted stock units)) and the number of outstanding shares of KLXE Common Stock (including KLXE restricted stock awards), it is estimated that KLXE stockholders will own approximately 59% and QES stockholders will own approximately 41%, respectively, of the issued and outstanding shares of KLXE on a fully diluted basis immediately following the Effective Time of the merger. KLXE Common Stock is traded on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “KLXE.” QES Common Stock is traded on the New York Stock Exchange (the “NYSE”) under the symbol “QES.” The common stock of the combined company will remain listed on Nasdaq under the symbol “KLXE.” We encourage you to obtain updated quotes for the common stock of both KLXE and QES.
KLXE will hold its annual meeting of stockholders (the “KLXE Annual Meeting”) to address, among other things, proposals related to the merger. QES will hold a special meeting of its stockholders in connection with the proposed merger (the “QES Special Meeting”).
At the KLXE Annual Meeting, KLXE stockholders will be asked to consider and vote on (i) proposals related to the merger and (ii) proposals related to annual meeting items. Specifically, KLXE stockholders will be asked to (1) approve the issuance of KLXE Common Stock to QES stockholders pursuant to the Merger Agreement (the “KLXE Share Issuance Proposal”), (2) approve an amendment to KLXE’s amended and restated certificate of incorporation to effect a reverse stock split of KLXE’s Common Stock at a ratio of 1-for-10 (the “KLXE Reverse Stock Split Proposal”), (3) approve an amendment to KLXE’s Long-Term Incentive Plan (the “LTIP”) to increase the number of shares issuable thereunder (the “KLXE LTIP Amendment Proposal”), (4) approve the election of two Class II Directors to the KLXE Board of Directors for a term of three years (the “KLXE Director Election Proposal”), (5) approve an amendment to KLXE’s Employee Stock Purchase Plan (the “ESPP”) to increase the number of shares issuable thereunder (the “KLXE ESPP Amendment Proposal”), (6) ratify the appointment of Deloitte & Touche LLP to serve as KLXE’s independent auditor (the “KLXE Auditor Proposal”) and (7) approve the adjournment of the KLXE Annual Meeting to solicit additional proxies if there are not sufficient votes cast at the KLXE Annual Meeting to approve any of the KLXE Share Issuance Proposal, the KLXE Reverse Stock Split Proposal, the KLXE LTIP Amendment Proposal, the KLXE Director Election Proposal, the KLXE ESPP Amendment Proposal or the KLXE Auditor Proposal. The KLXE Board of directors unanimously recommends that KLXE stockholders vote “FOR” each of the proposals to be considered at the KLXE Annual Meeting.
Concurrently with the execution of the Merger Agreement, QES entered into a support agreement (the “KLXE Support Agreement”) with Amin J. Khoury, the former Chairman, Chief Executive Officer and President of KLXE and current member of the KLXE Board, pursuant to which Mr. Khoury has agreed, subject to the terms and conditions thereof, to vote his shares of KLXE Common Stock (which represent approximately 4.7% of the outstanding shares of KLXE Common Stock) in favor of the KLXE Share Issuance Proposal at the KLXE Annual Meeting.
At the QES Special Meeting, QES stockholders will be asked to consider and vote on proposals to (1) adopt the Merger Agreement (the “QES Merger Proposal”), and (2) approve the adjournment of the QES Special Meeting to solicit additional proxies if there are not sufficient votes cast at the QES Special Meeting to approve the QES Merger Proposal. The QES board unanimously recommends that QES stockholders vote “FOR” each of the proposals to be considered at the QES Special Meeting.
Concurrently with the execution of the Merger Agreement, KLXE entered into a support agreement (the “QES Support Agreement”) with each of Archer Holdco LLC, Geveran Investments Limited, Famatown Finance Limited, Robertson QES Investment LLC, Quintana Energy Partners — QES Holdings LLC, Quintana Energy Fund — TE, L.P. and Quintana Energy Fund — FI, L.P. (together, the “QES Principal Stockholders”) pursuant to which the QES Principal Stockholders have agreed, subject to the terms and conditions thereof, to vote their shares of QES Common Stock (which represent approximately 76% of the outstanding shares of QES Common Stock) in favor of the QES Merger Proposal at the QES Special Meeting.
KLXE has chosen to hold the KLXE Annual Meeting and QES has chosen to hold the QES Special Meeting solely via the live webcast and not in a physical location given the public health impact of coronavirus (COVID-19) and the desire to promote the health and safety of their respective stockholders, directors, officers, employees and other constituents.
We cannot complete the merger unless the KLXE stockholders approve the KLXE Share Issuance Proposal and the QES stockholders approve the QES Merger Proposal. Your vote on these matters is very important regardless of the number of shares you own. Whether or not you plan to attend the KLXE Annual Meeting or the QES Special Meeting, as applicable, please promptly mark, sign and date the accompanying proxy card and return it in the enclosed postage-paid envelope or 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 KLXE Annual Meeting and the QES Special Meeting, 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 26, 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,
Thomas P. McCaffrey
President, Chief Executive Officer and Chief Financial Officer
KLX Energy Services Holdings, Inc.
Christopher J. Baker
President and Chief Executive Officer
Quintana Energy Services 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 KLXE 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           , 2020 and is first being mailed to the stockholders of KLXE and QES on or about       , 2020.

 
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KLX Energy Services Holdings, Inc.
1300 Corporate Center Way
Wellington, Florida 33414
(561) 383-5100
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON           , 2020
To the Stockholders of KLX Energy Services Holdings, Inc.:
Notice is hereby given that KLX Energy Services Holdings, Inc. (“KLXE”) will hold the annual meeting of its stockholders (the “KLXE Annual Meeting”) virtually at           , on                 , 2020, beginning at                 a.m. Eastern Time. KLXE has chosen to hold the KLXE Annual Meeting solely via live webcast and not in a physical location given the public health impact of coronavirus (COVID-19) and the company’s desire to promote the health and safety of its stockholders, directors, officers, employees and other constituents. Only stockholders of KLXE as of the close of business on the KLXE Record Date and those who hold a valid proxy for the KLXE Annual Meeting are entitled to participate in the KLXE Annual Meeting. The KLXE Annual Meeting relates to:
a.
proposals in connection with the Agreement and Plan of Merger, dated as of May 3, 2020 (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 KLXE, Krypton Intermediate, LLC, an indirect wholly owned subsidiary of KLXE (“Acquiror”), Krypton Merger Sub, Inc., an indirect wholly owned subsidiary of KLXE (“Merger Sub”), and Quintana Energy Services Inc. (“QES”), pursuant to which Merger Sub will merge with and into QES, with QES surviving the merger as an indirect wholly owned subsidiary of KLXE. Specifically, stockholders will be asked:
1.
to approve the issuance of shares of KLXE’s common stock, par value $0.01 per share (the “KLXE Common Stock”), to stockholders of QES pursuant to the Merger Agreement (the “KLXE Share Issuance Proposal”);
2.
to approve an amendment to the amended and restated certificate of incorporation of KLXE to effect a reverse stock split of KLXE Common Stock at a ratio of 1-for-10 (the “KLXE Reverse Stock Split Proposal”);
3.
to approve an amendment to KLXE’s Long-Term Incentive Plan to increase the number of shares issuable thereunder (the “KLXE LTIP Amendment Proposal”);
b.
proposals in connection with the regular annual meeting. Specifically, stockholders will be asked:
4.
to approve the election of two Class II Directors (Benjamin A. Hardesty and Stephen M. Ward, Jr.) to the KLXE Board of Directors for a three-year term (the “KLXE Director Election Proposal”);
5.
to approve an amendment to KLXE’s Employee Stock Purchase Plan to increase the number of shares issuable thereunder (the “KLXE ESPP Amendment Proposal”);
6.
to approve the annual ratification of the appointment of Deloitte & Touche LLP to serve as KLXE’s independent auditor for 2020 (the “KLXE Auditor Proposal”); and
 

 
c.
an adjournment proposal. Specifically, stockholders will be asked:
7.
to approve the adjournment of the KLXE Annual Meeting to solicit additional proxies if there are not sufficient votes at the time of the KLXE Annual Meeting to approve any of the KLXE Share Issuance Proposal, the KLXE Reverse Stock Split Proposal, the KLXE LTIP Amendment Proposal, the KLXE Director Election Proposal, the KLXE ESPP Amendment Proposal or the KLXE Auditor Proposal, or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to KLXE stockholders (the “KLXE Adjournment Proposal”).
Approval of the KLXE Share Issuance Proposal is required for completion of the merger. None of the other proposals to be considered at the KLXE Annual Meeting, including the KLXE Reverse Stock Split Proposal and the KLXE LTIP Amendment Proposal, is a condition to the obligation of KLXE or QES to complete the merger.
KLXE will transact no other business at the KLXE Annual Meeting except such business as may properly be brought before the KLXE Annual 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 KLXE Common Stock at the close of business on           , 2020, the record date for voting at the KLXE Annual Meeting (the “KLXE Record Date”), are entitled to notice of and to vote at the KLXE Annual Meeting and any adjournments or postponements thereof.
The board of directors of KLXE (the “KLXE Board”) 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, KLXE and the holders of shares of KLXE Common Stock. The KLXE Board unanimously recommends that KLXE stockholders vote “FOR” the KLXE Share Issuance Proposal, “FOR” the KLXE Reverse Stock Split Proposal and “FOR” the KLXE LTIP Amendment Proposal.
In addition, the KLXE Board unanimously recommends that KLXE stockholders vote “FOR” the KLXE Director Election Proposal, “FOR” the KLXE ESPP Amendment Proposal, “FOR” the KLXE Auditor Proposal and “FOR” the KLXE Adjournment Proposal.
Your vote is very important regardless of the number of shares of KLXE Common Stock you own. KLXE cannot complete the transactions contemplated by the Merger Agreement without approval of the KLXE Share Issuance Proposal. Assuming a quorum is present, the approval of the KLXE Share Issuance Proposal requires the affirmative vote of a majority of the shares of KLXE Common Stock present at the KLXE Annual Meeting and entitled to vote thereat.
If you plan to attend the KLXE Annual Meeting virtually on the Internet, please follow the registration instructions as outlined in this joint proxy statement/prospectus.
Whether or not you plan to attend the KLXE Annual Meeting, KLXE urges you to please promptly mark, sign and date the accompanying proxy card and return it in the enclosed postage-paid envelope so that your shares may be represented and voted at the KLXE Annual 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 at the KLXE Annual Meeting, you must obtain a legal proxy from your bank, broker or other nominee in order to vote at the KLXE Annual Meeting.
If you have any questions about the merger, please contact KLXE at (561) 383-5100 or write to KLX Energy Services Holdings, Inc., Attn: Corporate Secretary, 1300 Corporate Center Way, Wellington, Florida 33414.
 

 
If you have any questions about how to vote or direct a vote in respect of your shares of KLXE Common Stock, you may contact KLXE’s proxy solicitor:
Georgeson LLC
1290 Avenue of the America’s, 9th Floor
New York, NY 10104
Stockholders, banks and brokers may call toll free: 1-800-509-1312
Or (781) 575-2137 (for all those outside of the U.S.)
By Order of the Board of Directors,
/s/ Jonathan L. Mann
JONATHAN L. MANN
General Counsel, Vice President — Law and
Corporate Secretary
Wellington, Florida
Your vote is very important. KLXE 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.
 

 
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Quintana Energy Services Inc.
1415 Louisiana, Suite 2900
Houston, TX 77002
(832) 518-4094
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON           , 2020
To the Stockholders of Quintana Energy Services Inc.:
Notice is hereby given that Quintana Energy Services Inc. (“QES”) will hold a special meeting of its stockholders (the “QES Special Meeting”) virtually at                 , on                 , 2020, beginning at           Central Time. QES has chosen to hold the QES Special Meeting solely via live webcast and not in a physical location given the public health impact of coronavirus (COVID-19) and the company’s desire to promote the health and safety of QES stockholders, directors, officers, employees and other constituents. At the QES Special Meeting, QES stockholders will be asked:
1.
to adopt the Agreement and Plan of Merger, dated as of May 3, 2020 (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 KLX Energy Services Holdings, Inc. (“KLXE”), Krypton Intermediate, LLC, an indirect wholly owned subsidiary of KLXE (“Acquiror”), Krypton Merger Sub, Inc., an indirect wholly owned subsidiary of KLXE (“Merger Sub”), and QES, pursuant to which Merger Sub will merge with and into QES, with QES surviving the merger as an indirect wholly owned subsidiary of KLXE, and each outstanding share of QES’s common stock, par value $0.01 (“QES Common Stock”) (with certain exceptions described in the accompanying joint proxy statement/prospectus) will be cancelled and converted into the right to receive 0.4844 shares of KLXE’s Common Stock, par value $0.01 per share (the “QES Merger Proposal”); and
2.
to approve the adjournment of the QES Special Meeting to solicit additional proxies if there are not sufficient votes at the time of the QES Special Meeting to approve the QES Merger Proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to QES stockholders (the “QES Adjournment Proposal”).
QES will transact no other business at the QES Special Meeting except such business as may properly be brought before the QES 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 QES Common Stock at the close of business on           , 2020, the record date for voting at the QES Special Meeting (the “QES Record Date”), are entitled to notice of and to vote at the QES Special Meeting and any adjournments or postponements thereof.
The board of directors of QES (the “QES 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 QES Board unanimously recommends that QES stockholders vote “FOR” the QES Merger Proposal and “FOR” the QES Adjournment Proposal.
Your vote is very important regardless of the number of shares of QES Common Stock you own. QES cannot complete the transactions contemplated by the Merger Agreement, including the merger, without approval of the QES Merger Proposal. Assuming a quorum is present, approval of the QES Merger
 

 
Proposal requires the affirmative vote of a majority of the outstanding shares of QES Common Stock entitled to vote on the QES Merger Proposal.
Whether or not you plan to attend the QES Special Meeting, QES urges you to please promptly mark, sign and date the accompanying proxy card 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 QES 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 at the QES Special Meeting, you must obtain a legal proxy from your bank, broker or other nominee in order to vote at the QES Special Meeting.
If you have any questions about the merger or about how to vote or direct a vote in respect of your shares of QES Common Stock, please contact QES at (832) 518-4094 or write to Quintana Energy Services Inc., Attn: Corporate Secretary, 1415 Louisiana, Suite 2900, Houston, TX 77002.
By Order of the Board of Directors,
/s/ Max. L Bouthillette
Max L. Bouthillette
Executive Vice President, General Counsel and
Chief Compliance Officer
Houston, Texas
Your vote is very important. QES 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.
 

 
ADDITIONAL INFORMATION
This joint proxy statement/prospectus includes important business and financial information about each of KLXE and QES that is included in documents filed with the U.S. Securities and Exchange Commission (the “SEC”) that have been included herein and delivered herewith as annexes. In addition, each of KLXE and QES files annual, quarterly and current reports, proxy statements and other business and financial information with the SEC. KLXE and QES 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 KLXE at investor.klxenergy.com/financial-information/sec-filings and from QES at https://ir.quintanaenergyservices.com/all-sec-filings, as applicable. The information contained on, or that may be accessed through, the respective websites of KLXE and QES is not incorporated by reference into, and is not a part of, this joint proxy statement/prospectus.
This joint proxy statement/prospectus includes as annexes documents that KLXE and QES previously filed with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as set forth below. Any statement contained in such a document shall be deemed to be modified or superseded for purposes of this joint proxy statement/prospectus to the extent that a statement contained in this joint proxy statement/prospectus or in an annex hereto consisting of a document filed with the SEC subsequent to such document modifies or replaces such statement. The information included in the annexes hereto is incorporated into this joint proxy statement/prospectus except to the extent so modified or superseded and except as provided below.
Set forth below is a list of the documents previously filed with the SEC by KLXE and QES under the Exchange Act that are included as annexes to this joint proxy statement/prospectus.
KLXE






QES







KLXE 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 thereto 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. You may request copies from:
For KLXE stockholders:
For QES stockholders:
KLX Energy Services Holdings, Inc.
1300 Corporate Center Way
Wellington, Florida 33414
(561) 383-5100
Attention: Corporate Secretary
Quintana Energy Services Inc.
1415 Louisiana, Suite 2900
Houston, TX 77002
(832) 518-4094
Attention: Corporate Secretary
Georgeson LLC
1290 Avenue of the Americas, 9th Floor
New York, NY 10104
Stockholders, banks and brokers may call toll free:
1-800-509-1312
Or (781) 575-2137 (for all those outside of the U.S.)
If you would like to request any documents, please do so by           , 2020, which is five business days prior to the date of the KLXE Annual Meeting and the QES Special Meeting, in order to receive them before the applicable meeting.
For a more detailed description of where you can find information about KLXE and QES, please see “Where You Can Find More Information.”
 

 
ABOUT THIS JOINT PROXY STATEMENT/PROSPECTUS
This document, which forms part of a registration statement on Form S-4 filed with the SEC by KLXE, constitutes a prospectus of KLXE under Section 5 of the Securities Act of 1933 (as amended, the “Securities Act”) with respect to the shares of common stock of KLXE to be issued to QES stockholders pursuant to the Merger Agreement. This document also constitutes a joint proxy statement of KLXE and QES 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 KLXE Annual Meeting and the QES Special Meeting.
You should rely only on the information contained in this joint proxy statement/prospectus. KLXE and QES have not authorized anyone to provide you with information that is different from that contained in this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated           , 2020, 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.
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. KLXE has supplied all information contained in this joint proxy statement/prospectus relating to KLXE, and QES has supplied all such information relating to QES. KLXE and QES 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 “KLXE” refer to KLX Energy Services Holdings, Inc., a Delaware corporation. All references in this joint proxy statement/prospectus to “QES” refer to Quintana Energy Services Inc., a Delaware corporation. All references in this joint proxy statement/prospectus to “Merger Sub” refer to Krypton Merger Sub, Inc., a Delaware corporation and an indirect wholly owned subsidiary of KLXE. All references in this joint proxy statement/prospectus to “Acquiror” refers to Krypton Intermediate, LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of KLXE. All references in this joint proxy statement/prospectus to “KLXE Common Stock” refer to the common stock of KLXE, par value $0.01 per share, and all references in this joint proxy statement/prospectus to “QES Common Stock” refer to the common stock of QES, 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 May 3, 2020, as it may be amended. All references in this joint proxy statement/prospectus to the “Exchange Ratio” refer to the ratio of 0.4844 shares of KLXE Common Stock per outstanding share of QES Common Stock that will be issued to QES stockholders in connection with the merger, subject to adjustment for the reverse stock split of KLXE Common Stock expected to be implemented prior to the consummation of the merger as discussed in this joint proxy statement/prospectus.
 

 
TABLE OF CONTENTS
Page
QUESTIONS AND ANSWERS
i
SUMMARY
1
The Parties to the Merger (See page 45)
1
The Merger and the Merger Agreement (See pages 88 and 132)
1
Merger Consideration (See page 133)
2
The KLXE Annual Meeting (See page 47)
2
KLXE Support Agreement (See page 155)
3
The QES Special Meeting (See page 81)
3
QES Support Agreement (See page 154)
4
Recommendation of the KLXE Board Related to the Merger Proposals and Reasons for the Merger (See page 96)
4
Recommendation of the KLXE Board Related to the Annual Meeting Proposals (See page 48)
5
Recommendation of the QES Board and Reasons for the Merger (See page 99)
5
Opinion of KLXE’s Financial Advisor (See page 111 and Annex E)
6
Opinion of QES’s Financial Advisor (See page 115 and Annex F)
7
Board of Directors and Management of KLXE Following the Merger (See pages 123 and 156)
7
Interests of KLXE’s Directors and Executive Officers in the Merger (See page 124)
8
Treatment of Existing KLXE Equity Awards in the Merger (See page 124)
8
Interests of QES’s Directors and Executive Officers in the Merger (See page 126)
8
Treatment of Existing QES Long-Term Incentive Awards in the Merger (See page 133)
9
Certain Beneficial Owners of KLXE Common Stock (See page 197)
9
Certain Beneficial Owners of QES Common Stock (See page 199)
10
Ownership of KLXE after the Merger
10
Conditions to the Completion of the Merger (See page 149)
10
No Solicitation of Acquisition Proposals (See page 141)
12
No Change of Recommendation (See page 142)
12
KLXE Annual Meeting (See page 144)
13
QES Special Meeting (See page 144)
13
Termination of the Merger Agreement (See page 150)
14
Termination Fees (See page 151)
15
Expense Reimbursement (See page 152)
15
Registration Rights Agreement (See page 145)
16
Accounting Treatment (See page 131)
16
U.S. Federal Income Tax Consequences of the Merger (See page 171)
16
U.S. Federal Income Tax Consequences of the Reverse Stock Split (See page 171)
16
Fractional Shares (See page 133)
16
Comparison of Stockholders’ Rights (See page 179)
16
Listing of KLXE Common Stock; Delisting and Deregistration of QES Common Stock (See page 147)
17
Employee Matters (See page 147)
17
Regulatory Matters (See page 130)
17
 

 
Page
No Appraisal Rights (See page 131)
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Risk Factors (See page 26)
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149
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U-1
 

 
QUESTIONS AND ANSWERS
The following are some questions that you, as a stockholder of KLXE or QES, may have regarding the merger and the other matters being considered at the KLXE Annual Meeting and the QES Special Meeting, 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 this joint proxy statement/prospectus.
Except where specifically noted, the following information and all other information contained in this joint proxy statement/prospectus does not give effect to KLXE’s proposed reverse stock split (the “reverse stock split”), as described in KLXE Proposal 2 beginning on page 55 of this joint proxy statement/prospectus.
Q:
Why am I receiving this joint proxy statement/prospectus?
A:
This joint proxy statement/prospectus serves as a proxy statement for the KLXE Annual Meeting and the QES Special Meeting.
You are receiving this joint proxy statement/prospectus because KLXE and QES have agreed to combine in an all stock merger transaction. The combined company will retain the KLX Energy Services corporate name and the company’s listing will remain on Nasdaq under the ticker “KLXE.” 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 KLXE and QES in writing and specified in the certificate of merger. The Merger Agreement governs the terms of the merger of KLXE and QES and is attached to this joint proxy statement/prospectus as Annex A.
In order to complete the merger, among other things:

KLXE stockholders must approve the issuance of KLXE Common Stock to QES stockholders in connection with the merger in accordance with the Listing Rules of Nasdaq; and

QES stockholders must adopt the Merger Agreement in accordance with the Delaware General Corporation Law (the “DGCL”).
This joint proxy statement/prospectus serves as both the proxy statement through which KLXE and QES will solicit proxies to obtain the necessary stockholder approvals for the merger and as the prospectus by which KLXE will issue shares of the KLXE Common Stock as consideration in the merger. In addition, this joint proxy statement/prospectus serves as the proxy statement through which KLXE will solicit proxies for (i) an amendment to the amended and restated certificate of incorporation of KLXE to effect a reverse stock split of KLXE Common Stock at a ratio of 1-for-10, (ii) an amendment to KLXE’s Long-Term Incentive Plan to increase the number of shares issuable thereunder, (iii) the election of two Class II Directors (Benjamin A. Hardesty and Stephen M. Ward, Jr.) to the KLXE Board of Directors for a three-year term, (iv) an amendment to KLXE’s Employee Stock Purchase Plan to increase the number of shares issuable thereunder and (v) the annual ratification of the appointment of Deloitte & Touche LLP as its independent auditor for 2020.
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 KLXE and QES. Under the Merger Agreement, Merger Sub will merge with and into QES, with QES as the surviving corporation and an indirect wholly owned subsidiary of KLXE.
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.”
 
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Q:
What is KLXE’s strategic rationale for the merger?
A:
In reaching its determinations and recommendations, the KLXE Board consulted with KLXE management and its outside legal and financial advisors, and considered a number of factors, including that the merger will create a leading provider of production, completion and drilling solutions offering a broad range of asset light services across all major U.S. basins. The merger will add directional drilling, snubbing and well control services to KLXE’s already broad range of product and services lines as well as allow for rationalizing two of the largest fleets of coiled tubing and wireline assets. The addition of new product and service lines and rationalization of assets will facilitate the pull through of KLXE’s asset light services and dramatically reduce the need for further capital spending. In addition, the two companies anticipate achieving annualized run-rate cost synergies of at least $40 million within 12 months.
Q:
What is QES’s strategic rationale for the merger?
A:
In reaching its determinations and recommendations, the QES Board consulted with QES management and its outside legal and financial advisors, and considered a number of factors, including the expectation that the merger will create significant cost synergies for both QES and KLXE by spreading fixed costs across a greater operating scale, with at least $40 million in anticipated annual run-rate cost savings through facility, lease and personnel rationalization, the expectation that the combined company will establish a market-leading position in coiled tubing and wireline assets, and the expectation that the increased scale and scope of the combined company will strengthen its balance sheet and provide increased liquidity and financial flexibility.
Q:
What am I being asked to vote on?
A:
KLXE is holding an annual meeting of its stockholders to obtain approval of the issuance of KLXE Common Stock to QES stockholders in connection with the merger. KLXE stockholders will also be asked to approve the KLXE Reverse Stock Split Proposal, the KLXE LTIP Amendment Proposal, the KLXE Director Election Proposal, the KLXE ESPP Amendment Proposal, the KLXE Auditor Proposal and the proposal to adjourn the KLXE Annual Meeting to solicit additional proxies if there are not sufficient votes at the time of the KLXE Annual Meeting to approve any of the KLXE Share Issuance Proposal, the KLXE Reverse Stock Split Proposal, the KLXE LTIP Amendment Proposal, the KLXE Director Election Proposal, the KLXE ESPP Amendment Proposal or the KLXE Auditor Proposal, or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to KLXE stockholders.
QES is holding a special meeting of its stockholders to vote on the adoption of the Merger Agreement, pursuant to which each outstanding share of QES Common Stock (other than shares of QES Common Stock owned directly or indirectly by KLXE or Merger Sub or any of their respective subsidiaries immediately prior to the Effective Time or held directly or indirectly by QES (as treasury stock or otherwise) or any of its subsidiaries immediately prior to the Effective Time (in each case, other than shares of QES Common Stock held on behalf of third parties) (the “QES Excluded Shares”)) will be cancelled and converted into the right to receive 0.4844 shares of KLXE Common Stock, subject to adjustment in the event that the reverse stock split is effectuated prior to the Effective Time. QES stockholders will also be asked to approve the proposal to adjourn the QES Special Meeting to solicit additional proxies if there are not sufficient votes at the time of the QES Special Meeting to approve the QES Merger Proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to QES stockholders.
Your vote is very important, regardless of the number of shares that you own. The approval of the KLXE Share Issuance Proposal by the KLXE stockholders and the approval of the QES Merger Proposal by the QES stockholders are conditions to the obligations of KLXE and QES to complete the merger. None of the approvals of the KLXE Reverse Stock Split Proposal, the KLXE LTIP Amendment Proposal, the KLXE Director Election Proposal, the KLXE ESPP Amendment Proposal, the KLXE Auditor Proposal, the KLXE Adjournment Proposal or the QES Adjournment Proposal are conditions to the obligations of KLXE or QES to complete the merger.
 
ii

 
Q:
When and where will the KLXE Annual Meeting and the QES Special Meeting take place?
A:
The KLXE Annual Meeting will be held virtually at         a.m., Eastern Time, on        , 2020. The KLXE Annual Meeting can be accessed by visiting        , where KLXE stockholders will be able to participate and vote online. Online access will begin at         a.m., Eastern Time, and KLXE encourages its stockholders to access the meeting prior to the start time.
The QES Special Meeting will be held virtually at         a.m., Central Time, on         , 2020. The QES Special Meeting can be accessed by visiting         , where QES stockholders will be able to participate and vote online. Online access will begin at         a.m., Central Time, and QES encourages its stockholders to access the meeting prior to the start time.
KLXE has chosen to hold the KLXE Annual Meeting and QES has chosen to hold the QES Special Meeting solely via the Internet and not in a physical location given the public health impact of coronavirus (COVID-19) and the desire to promote the health and safety of their respective stockholders, directors, officers, employees and other constituents.
Even if you plan to attend the KLXE Annual Meeting or the QES Special Meeting, as applicable, KLXE and QES 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 KLXE Annual Meeting or the QES Special Meeting, as applicable. Shares held in “street name” may be voted by you at your respective company’s special meeting or annual meeting, as applicable, 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 KLXE Annual Meeting or the QES Special Meeting, as applicable, is very important, and you are encouraged to submit a proxy as soon as possible. The merger between KLXE and QES cannot be completed without the approval of the KLXE Share Issuance Proposal by the KLXE stockholders and the approval of the QES Merger Proposal by the QES stockholders.
Q:
What constitutes a quorum, and what vote is required to approve each proposal at the KLXE Annual Meeting and the QES Special Meeting?
A:
KLXE.   The holders of a majority of the outstanding shares of KLXE Common Stock entitled to vote at the KLXE Annual Meeting must be represented at the KLXE Annual Meeting in person or by proxy in order to constitute a quorum.
Assuming a quorum is present, approval of each of the KLXE Share Issuance Proposal, the KLXE LTIP Amendment Proposal, the KLXE ESPP Amendment Proposal and the KLXE Auditor Proposal, and, in the event that a quorum is not present, approval of the KLXE Adjournment Proposal, requires the affirmative vote of a majority of the shares of KLXE Common Stock present at the KLXE Annual Meeting and entitled to vote thereat. Accordingly, with respect to a KLXE stockholder who is present or represented by proxy at the KLXE Annual Meeting, a KLXE stockholder’s abstention from voting or the failure of a KLXE stockholder to vote (including the failure of a KLXE 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, which will result in a broker non-vote) will have the same effect as a vote “against” the KLXE Share Issuance Proposal, the KLXE LTIP Amendment Proposal, the KLXE ESPP Amendment Proposal, the KLXE Adjournment Proposal and the KLXE Auditor Proposal (except in the event a bank, broker or other nominee exercises its discretionary authority to vote “for” the KLXE Auditor Proposal).
Approval of the KLXE Reverse Stock Split Proposal requires the affirmative vote of a majority of the outstanding shares of KLXE Common Stock entitled to vote thereon. Accordingly, a KLXE stockholder’s abstention from voting or the failure of a KLXE stockholder to vote (including the failure of a KLXE 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, which will result in a broker non-vote) will have the same effect as a vote “against” the KLXE Reverse Stock Split Proposal.
 
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Under the KLXE Charter, in order for a director to be elected at the KLXE Annual Meeting pursuant to the KLXE Director Election Proposal, a plurality of the voting power of the shares of KLXE Common Stock entitled to vote on the election of directors and present in person or by proxy at the KLXE Annual Meeting must be cast “for” the director. Accordingly, a KLXE stockholder’s abstention from voting or the failure of a KLXE stockholder to vote (including the failure of a KLXE 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, which will result in a broker non-vote) will have no effect on the KLXE Director Election Proposal.
Regardless of whether there is a quorum, the chairman of the KLXE Annual Meeting may also adjourn the KLXE Annual Meeting.
QES.   The holders of a majority of the total voting power of all outstanding shares of QES Common Stock entitled to vote at the QES Special Meeting must be represented at the QES Special Meeting in person or by proxy in order to constitute a quorum.
Approval of the QES Merger Proposal requires the affirmative vote of a majority of the outstanding shares of QES Common Stock entitled to vote thereon. Accordingly, a QES stockholder’s abstention from voting or the failure of a QES stockholder to vote (including the failure of a QES 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 QES Merger Proposal.
Approval of the QES Adjournment Proposal requires the affirmative vote of a majority of the voting power of the shares of QES Common Stock present in person or represented by proxy at the QES Special Meeting. Accordingly, with respect to a QES stockholder who is present in person or represented by proxy at the QES Annual Meeting, a QES stockholder’s abstention from voting or the failure of a QES stockholder to vote (including the failure of a QES 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 QES Adjournment Proposal. Regardless of whether there is a quorum, the chairman of the QES Special Meeting may also adjourn the QES Special Meeting.
Q:
Are there any stockholders who have already committed to voting in favor of any of the proposals?
A:
Yes. Concurrently with the execution of the Merger Agreement, KLXE entered into the QES Support Agreement (a copy of which is attached as Annex G to the joint proxy statement/prospectus) with each of the QES Principal Stockholders pursuant to which the QES Principal Stockholders have agreed, subject to the terms and conditions thereof, to vote their shares of QES Common Stock in favor of the QES Merger Proposal at the QES Special Meeting. For more information, please see “The Merger Agreement — QES Support Agreement.”
In addition, concurrently with the execution of the Merger Agreement, QES entered into the KLXE Support Agreement (a copy of which is attached as Annex H to the joint proxy statement/prospectus) with Amin J. Khoury, the former Chairman, Chief Executive Officer and President of KLXE and current member of the KLXE Board, pursuant to which Mr. Khoury has agreed, subject to the terms and conditions thereof, to vote his shares of KLXE Common Stock in favor of the KLXE Share Issuance Proposal at the KLXE Annual Meeting. For more information, please see “The Merger Agreement — KLXE Support Agreement.”
Q:
What will KLXE stockholders receive if the merger is completed?
A:
If the merger is completed, KLXE stockholders will continue to hold shares of KLXE Common Stock.
Q:
What will QES stockholders receive if the merger is completed?
A:
If the merger is completed, each share of QES Common Stock outstanding at the Effective Time will be converted into the right to receive 0.4844 shares of KLXE Common Stock, subject to adjustment in
 
iv

 
the event that the reverse stock split is effectuated prior to the Effective Time. Each QES stockholder will receive cash for any fractional shares of KLXE Common Stock that such stockholder would otherwise receive in the merger. Any cash amounts to be received by a QES stockholder in respect of fractional shares will be aggregated and rounded to the nearest whole cent.
Because KLXE will issue a fixed number of shares of KLXE Common Stock in exchange for each share of QES Common Stock, the value of the merger consideration that QES stockholders will receive in the merger will depend on the market price of shares of KLXE Common Stock at the Effective Time. The market price of shares of KLXE Common Stock that QES stockholders receive at the Effective Time could be greater than, less than or the same as the market price of shares of KLXE Common Stock on the date of this joint proxy statement/prospectus or at the time of the KLXE Annual Meeting and the QES Special Meeting. Accordingly, you should obtain current market quotations for KLXE Common Stock and QES Common Stock before deciding how to vote with respect to the KLXE Share Issuance Proposal and the QES Merger Proposal, as applicable. The KLXE Common Stock is traded on Nasdaq under the symbol “KLXE.” The QES Common Stock is traded on the NYSE under the symbol “QES.” The common stock of the combined company will continue to trade on Nasdaq under the symbol “KLXE.”
For more information regarding the merger consideration to be received by QES stockholders if the merger is completed, please see “The Merger Agreement — Merger Consideration.”
Q:
Who will own KLXE immediately following the merger?
A:
KLXE and QES estimate that upon completion of the merger, current KLXE stockholders, collectively, will own approximately 59% of the outstanding shares of KLXE Common Stock, and current QES stockholders, collectively, will own approximately 41% of the outstanding KLXE Common Stock (in each case based on fully diluted shares outstanding of KLXE).
Q:
Will QES equity and other long-term incentive awards be affected by the merger?
A:
Upon completion of the merger, outstanding QES equity awards will be affected as described below.
Each outstanding QES phantom unit award will become fully vested and will be cancelled in exchange for an aggregate number of shares of KLXE Common Stock equal to the product of (A) the number of shares of QES Common Stock subject to such QES phantom unit award and (B) the Exchange Ratio, rounded up to the nearest whole share of KLXE Common Stock, subject to withholding of shares of KLXE Common Stock for applicable income and employment withholding taxes.
Each time-based QES restricted stock unit award (“QES RSU”) (other than QES RSUs held by any non-employee director of QES), whether vested or unvested, that is outstanding at the Effective Time will be converted into a KLXE restricted stock unit award (as converted, a “Converted RSU”) with respect to an aggregate number of shares of KLXE Common Stock equal to the product of (A) the number of shares of QES Common Stock subject to such QES RSU immediately prior to the Effective Time and (B) the Exchange Ratio, rounded up to the nearest whole share of KLXE Common Stock. Each such Converted RSU will be subject to the same terms and conditions, including any vesting requirements and terms of settlement, as were applicable to the converted QES RSU immediately prior to the Effective Time.
Non-employee directors of QES will not receive Converted RSUs. QES RSUs held by non-employee directors of QES at the Effective Time, whether vested or unvested, will instead become fully vested and will be cancelled at the Effective Time and exchanged for shares of KLXE Common Stock using the same conversion ratio as used to determine the number of shares of KLXE Common Stock to which the Converted RSUs will be subject.
Each performance-based QES restricted stock unit award (“QES PSU”) outstanding at the Effective Time, whether vested or unvested, will be converted into a KLXE restricted stock unit award (as converted, a “Converted PSU”) with respect to an aggregate number of shares of KLXE Common Stock equal to the product of (A)  (x) in the case of any QES PSU granted prior to 2020, the number of shares of QES Common Stock subject to such QES PSU, based upon the actual level of performance
 
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previously determined by QES’s Compensation Committee in accordance with the applicable QES PSU, rounded up to the nearest whole share, and (y) in the case of any QES PSU granted in 2020, the number of shares of QES Common Stock subject to such QES PSU, based upon the actual level of performance as of May 1, 2020 (the last trading day for QES Common Stock on the NYSE immediately prior to the date of announcement of the Merger Agreement), with strategic performance goals deemed satisfied at 100% and (B) the Exchange Ratio, rounded up to the nearest whole share. Each such Converted PSU will otherwise be subject to the same terms and conditions, including any vesting requirements and terms of settlement (other than as described below), as were applicable to the converted QES PSU immediately prior to the Effective Time.
The following Converted PSUs will be settled solely in cash at the time such Converted PSUs become fully vested: (i) the portion of Converted PSUs exchanged for QES PSUs granted in 2019 that were determined to have been earned based on discretionary performance goals and (ii) the portion of Converted PSUs exchanged for QES PSUs granted in 2020 that are subject to strategic performance goals.
Any shares of QES Common Stock that remain available for issuance pursuant to any QES equity plan (the “Residual Shares”) will be converted into the number of shares of KLXE Common Stock equal to the product of the number of such Residual Shares and the Exchange Ratio. It is expected that there will be no Residual Shares.
Q:
How will KLXE stockholders be affected by the merger?
A:
Upon completion of the merger, each KLXE stockholder will hold the same number of shares of KLXE Common Stock that such stockholder held immediately prior to completion of the merger, subject to the reverse stock split (if effectuated). As a result of the merger, KLXE will be a larger company with a more diverse business base. However, because KLXE will issue additional shares of KLXE Common Stock to QES stockholders in exchange for their shares of QES Common Stock, each share of KLXE Common Stock outstanding prior to the merger will (subject to the reverse stock split, if effectuated) represent a smaller percentage of the aggregate number of shares of KLXE outstanding after the merger.
Q:
Will KLXE equity awards be affected by the merger?
A:
All KLXE restricted shares will remain in effect in accordance with their terms; provided, however, that each outstanding restricted stock award held immediately prior to the Effective Time by each member of the KLXE Board will become fully vested upon the Effective Time, as will restricted stock awards held as of immediately prior to the Effective Time by KLXE’s executive officers and certain other KLXE employees whose employment is terminated in connection with the merger. For a more complete description, please see “The Merger — Interests of KLXE’s Directors and Executive Officers in the Merger.”
Q:
What will happen to the KLXE LTIP?
A:
The LTIP will remain in effect in accordance with its terms. In anticipation of the needs of the combined company to provide long-term compensation to its service providers following the merger, KLXE proposes an amendment to the LTIP (the “LTIP Amendment”). The LTIP Amendment would increase the total number of shares of KLXE Common Stock reserved for issuance under the LTIP by        shares in order to allow KLXE to grant equity awards to employees and directors in the ordinary course of business. For a more complete description, please see “KLXE Proposal  3 — Amendment to the KLXE Long-Term Incentive Plan.”
Q:
What will happen to the KLXE ESPP?
A:
No shares will be purchased for the current offering period ending June 30, 2020, as participants have received refunds of their payroll deductions. No new offering period will commence prior to closing. KLXE proposes an amendment to the ESPP (the “ESPP Amendment”) to increase the total number of shares of KLXE Common Stock reserved for issuance under the ESPP by        shares in order to
 
vi

 
allow eligible employees to purchase shares of KLXE Common Stock in accordance with past practice following closing. For a more complete description, please see “KLXE Proposal 5 — Amendment to the KLXE Employee Stock Purchase Plan.”
Q:
What will the composition of the board of directors and management of KLXE be following completion of the merger?
A:
The Merger Agreement provides, among other things, as of the Effective Time, the KLXE Board will be comprised of nine directors, consisting of (a) five directors to be designated by KLXE (the “KLXE Designees”) and (b) four directors to be designated by QES (the “QES Designees”). At the Effective Time, (i)  Christopher J. Baker, the current President and Chief Executive Officer of QES, will serve as President and Chief Executive Officer of KLXE, (ii) Keefer M. Lehner, the current Executive Vice President and Chief Financial Officer of QES, will serve as Executive Vice President and Chief Financial Officer of KLXE, (iii) John T. Collins, the current Chairman of the KLXE Board, will serve as Non-Executive Chairman of the KLXE Board, (iv) Thomas P. McCaffrey, the current President, Chief Executive Officer and Chief Financial Officer of KLXE and a current member of the KLXE Board, will serve as a director on the KLXE Board and Chairman of the Integration Committee and (v) Amin J. Khoury, the former Chairman, Chief Executive Officer and President of KLXE and current member of the KLXE Board, will resign from the KLXE Board and continue to provide strategic advice to KLXE as a consultant. The Merger Agreement provides that KLXE will have, in addition to other committees, an integration committee charged with overseeing the integration of the combined company following the Effective Time (the “KLXE Integration Committee”). The KLXE Integration Committee will consist of Thomas P. McCaffrey as chair, one additional director designated by KLXE and two directors designated by QES.
Pursuant to KLXE’s amended and restated certificate of incorporation, the KLXE Board is divided into three classes, each as nearly equal in number as possible, so that each director (in certain circumstances after a transitional period) will serve for three  years, with one class of directors being elected each year. Two QES Designees and one KLXE Designee will be allocated to the class of directors whose term expires at the 2021 KLXE annual meeting (Class III), two KLXE Designees and one QES Designee will be allocated to the class of directors whose term expires at the 2022 KLXE annual meeting (Class I) and two KLXE Designees and one QES Designee will be allocated to the class of directors whose term expires at the 2023 KLXE annual meeting (Class II). The individuals expected to serve on the KLXE Board following the Effective Time include, as KLXE Designees: John T. Collins, Richard G. Hamermesh, Thomas P. McCaffrey, Stephen M. Ward, Jr., and John T. Whates, Esq., and as QES Designees: Dalton Boutté, Jr., Gunnar Eliassen, Corbin J. Robertson, Jr., and Dag Skindlo. Following the Effective Time, Gunnar Eliassen, Richard G. Hamermesh and John T. Whates, Esq., will serve as Class I Directors, John T. Collins, Dag Skindlo and Stephen M. Ward, Jr., will serve as Class II Directors and Dalton Boutté, Jr., Thomas P. McCaffrey and Corbin J. Robertson, Jr., will serve as Class III Directors.
Separate and apart from the above, KLXE’s stockholders are being asked at the KLXE Annual Meeting to vote on the election of two Class II Directors (Benjamin A. Hardesty and Stephen M. Ward, Jr.) to the KLXE Board for a three-year term. Messrs. Hardesty and Ward will serve as Class II Directors from the date of the KLXE Annual Meeting until the consummation of the merger or, if the merger is not consummated, for the duration of their term, unless they earlier retire, resign or are removed. If the merger is consummated Mr.  Ward will continue to serve on the KLXE Board as a Class II director and Mr. Hardesty will resign from the KLXE Board.
Q:
How does the KLXE Board recommend that I vote at the KLXE Annual Meeting?
A:
The KLXE Board unanimously recommends that you vote “FOR” the KLXE Share Issuance Proposal, “FOR” the KLXE Reverse Stock Split Proposal, “FOR” the KLXE LTIP Amendment Proposal, “FOR” the KLXE Director Election Proposal, “FOR” the KLXE ESPP Amendment Proposal, “FOR” the KLXE Auditor Proposal and “FOR” the KLXE Adjournment Proposal.
 
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Q:
How does the QES Board recommend that I vote at the QES Special Meeting?
A:
The QES Board unanimously recommends that you vote “FOR” the QES Merger Proposal and “FOR” the QES Adjournment Proposal.
Q:
Who is entitled to vote at the KLXE Annual Meeting?
A:
The KLXE Record Date for the KLXE Annual Meeting is         , 2020. All holders of shares of KLXE Common Stock who held shares at the close of business on the KLXE Record Date are entitled to receive notice of, and to vote at, the KLXE Annual Meeting. Each such holder of KLXE Common Stock is entitled to cast one vote on each matter properly brought before the KLXE Annual Meeting for each share of KLXE Common Stock that such holder owned of record as of the record date. Please see “The KLXE Annual Meeting — Voting at the KLXE Annual Meeting” for instructions on how to vote your shares without attending the KLXE Annual Meeting.
KLXE is commencing its solicitation of proxies on or about         , 2020, and KLXE will continue to solicit proxies until the date of the KLXE Annual Meeting. Proxies delivered prior to the KLXE Record Date will be valid and effective so long as the holder providing the proxy is a holder on the KLXE Record Date. If you are not a holder of record on the KLXE Record Date, any proxy you deliver will not be counted. If you deliver a proxy prior to the KLXE Record Date and remain a holder on the KLXE Record Date, you do not need to deliver another proxy after the KLXE Record Date. If you deliver a proxy prior to the KLXE Record Date and do not revoke that proxy, your proxy will be deemed to cover the number of shares of KLXE Common Stock you own on the KLXE Record Date, even if that number is different from the number of shares of KLXE Common Stock you owned when you executed and delivered your proxy card.
Q:
Who is entitled to vote at the QES Special Meeting?
A:
The QES Record Date for the QES Special Meeting is         , 2020. All holders of shares of QES Common Stock who held shares at the close of business on the QES Record Date are entitled to receive notice of, and to vote at, the QES Special Meeting. Each such holder of QES Common Stock is entitled to cast one vote on each matter properly brought before the QES Special Meeting for each share of QES Common Stock that such holder owned of record as of the record date. Please see “The QES Special Meeting — Voting at the QES Special Meeting” for instructions on how to vote your shares without attending the QES Special Meeting.
QES is commencing its solicitation of proxies on or about         , 2020, and QES will continue to solicit proxies until the date of the QES Special Meeting. Proxies delivered prior to the QES Record Date will be valid and effective so long as the holder providing the proxy is a holder on the QES Record Date. If you are not a holder of record on the QES Record Date, any proxy you deliver will not be counted. If you deliver a proxy prior to the QES Record Date and remain a holder on the QES Record Date, you do not need to deliver another proxy after the QES Record Date. If you deliver a proxy prior to the QES Record Date and do not revoke that proxy, your proxy will be deemed to cover the number of shares of QES Common Stock you own on the QES Record Date, even if that number is different from the number of shares of QES 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 or annual 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 KLXE Annual Meeting?
A:
Each KLXE stockholder is entitled to one vote for each share of KLXE Common Stock held of record as of the close of business on the KLXE Record Date. As of the close of business on         , 2020, the latest practicable date prior to the date of this joint proxy statement/prospectus, there were         outstanding shares of KLXE Common Stock.
 
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Q:
How many votes do I have for the QES Special Meeting?
A:
Each QES stockholder is entitled to one vote for each share of QES Common Stock held of record as of the close of business on the QES Record Date. As of the close of business on         , 2020, the latest practicable date prior to the date of this joint proxy statement/prospectus, there were         outstanding shares of QES Common Stock.
Q:
Where will KLXE Common Stock be publicly traded following consummation of the merger?
A:
The KLXE Common Stock will continue to trade on Nasdaq under the symbol “KLXE” following consummation of the merger.
Q:
What happens if the merger is not completed?
A:
If the KLXE Share Issuance Proposal or the QES Merger Proposal is not approved or if the merger is not completed for any other reason, QES stockholders will not receive any merger consideration for their shares of QES Common Stock in connection with the merger. Instead, KLXE and QES will each remain independent public companies, the KLXE Common Stock will continue to be listed and traded on Nasdaq, the QES Common Stock will continue to be listed and traded on the NYSE, and KLXE will not complete the share issuance pursuant to the Merger Agreement as contemplated by the KLXE Share Issuance Proposal. If the Merger Agreement is terminated under certain specified circumstances, KLXE or QES, as applicable, may be required to pay to the other party a termination fee of $3,000,000 and/or reimburse expenses up to $1,500,000. Please see “The Merger Agreement — Termination of the Merger Agreement — Termination Fees” for a more detailed discussion of the termination fees.
Approval of the KLXE Reverse Stock Split Proposal is not conditioned upon approval of the KLXE Share Issuance Proposal or completion of the merger and, as a result, if the KLXE stockholders vote to approve the KLXE Reverse Stock Split Proposal, KLXE may elect to effect the reverse stock split, regardless of whether the merger closes.
The KLXE Director Election Proposal and the KLXE Auditor Proposal are unrelated to the KLXE stockholder proposals pertaining to the merger and the share issuance and, as a result, if the KLXE stockholders vote to approve the KLXE Director Election Proposal and/or the KLXE Auditor Proposal, KLXE will implement these proposals regardless of whether the merger closes or any or all of the other proposals put forth before the KLXE stockholders in this joint proxy statement/prospectus are approved.
Q:
What is a “broker non-vote”?
A:
Under the rules of the NYSE, 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 KLXE Annual Meeting, other than the KLXE Auditor Proposal, and all of the proposals currently scheduled for consideration at the QES Special Meeting, are “non-routine” matters. These NYSE rules are applicable to the votes to be held at both the QES Special Meeting and the KLXE Annual Meeting, even though the KLXE Common Stock is currently listed on Nasdaq.
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. Under the rules of the NYSE, the KLXE Auditor Proposal is considered a “routine” matter for which brokers may have discretionary authority to vote. None of the other proposals currently scheduled to be voted on at the KLXE Annual Meeting are considered “routine” matters for which brokers may have discretionary authority to vote. Therefore, there may be broker non-votes at the KLXE Annual Meeting. Because none of the proposals currently scheduled to be voted on at the QES Special Meeting
 
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are routine matters for which brokers may have discretionary authority to vote, QES does not expect there to be any broker non-votes at the QES Special Meeting (except to the extent that a beneficial owner provides voting instructions for one, but not both, of the proposals being considered at the QES Special Meeting).
Q:
What if I hold shares in both KLXE and QES?
A:
If you are both a KLXE stockholder and a QES stockholder, you will receive two separate packages of proxy materials. A vote cast as a KLXE stockholder will not count as a vote cast as a QES stockholder, and a vote cast as a QES stockholder will not count as a vote cast as a KLXE stockholder. Please submit separate proxies for your shares of KLXE Common Stock and your shares of QES Common Stock.
Q:
How can I vote my shares and participate at the KLXE Annual Meeting?
A:
KLXE stockholders and proxy holders will be able to participate in the KLXE Annual Meeting online during the meeting by visiting         . You also will be able to vote your shares electronically at the KLXE Annual Meeting.
The meeting will begin promptly at         a.m., Eastern Time, on         , 2020. Online access will begin at         a.m., Eastern Time, and KLXE encourages its stockholders to access the meeting prior to the start time.
To register to attend the KLXE Annual Meeting online by webcast KLXE stockholders must submit proof of their proxy power (legal proxy) reflecting their KLXE holdings along with their name and email address to Computershare. Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on         , 2020.
KLXE stockholders will receive a confirmation of their registration by email after their registration materials are received.
Requests for registration should be directed to Computershare at the following addresses:
By email
Forward the email from the broker, or attach an image of the legal proxy, to legalproxy@computershare.com
By mail
Computershare
KLXE Legal Proxy
P.O. Box 43001
Providence, RI 02940-3001
Shares of KLXE Common Stock held directly in your name as the stockholder of record of KLXE may be voted at the KLXE Annual Meeting. Shares of KLXE Common Stock held in “street name” may be voted by you at the KLXE Annual Meeting only if you obtain a signed legal proxy from your bank, broker or other nominee giving you the right to vote the shares.
Even if you plan to attend the KLXE Annual Meeting, KLXE recommends 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 KLXE Annual Meeting.
Additional information on attending the KLXE Annual Meeting can be found under “The KLXE Annual Meeting.”
Q:
How can I vote my shares and participate at the QES Special Meeting?
A:
QES stockholders and proxy holders will be able to participate in the QES Special Meeting online during the meeting by visiting         . You also will be able to vote your shares electronically at the QES Special Meeting.
 
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To participate in the QES Special Meeting, you will need the 16-digit control number included on your proxy card, or on the instructions that accompanied your proxy materials.
The meeting will begin promptly at         a.m., Central Time, on         , 2020. Online access will begin at         a.m., Central Time, and QES encourages its stockholders to access the meeting prior to the start time.
Shares held directly in your name as the stockholder of record of QES may be voted at the QES Special Meeting. Shares held in “street name” may be voted by you at the QES Special Meeting only if you obtain a signed legal proxy from your bank, broker or other nominee giving you the right to vote the shares.
Even if you plan to attend the QES Special Meeting, QES recommends 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 QES Special Meeting.
Additional information on attending the QES Special Meeting can be found under “The QES Special Meeting.”
Q:
How can I vote my shares without attending the KLXE Annual Meeting or the QES Special Meeting, as applicable?
A:
Whether you hold your shares directly as a stockholder of record of KLXE or QES or beneficially in “street name,” you may direct your vote by proxy without attending the KLXE Annual Meeting or the QES Special Meeting, as applicable. You can vote by proxy by mail, 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 KLXE Annual Meeting” and “The QES 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 KLXE are registered directly in your name with Computershare, the transfer agent for KLXE, or if your shares of common stock in QES are registered directly in your name with American Stock Transfer & Trust Company, the transfer agent for QES, 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 KLXE or QES or to a third party to cast your vote, at the KLXE Annual Meeting or the QES Special Meeting, as applicable.
If your shares of common stock in KLXE or QES 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 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. If your shares are so held in “street name,” you are invited to attend the KLXE Annual Meeting or the QES Special Meeting, as applicable, but you may not vote these shares at the applicable stockholder 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 KLXE Annual Meeting or the QES Special Meeting, as applicable.
Q:
If my shares of KLXE Common Stock or QES 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:
Under the rules of the NYSE, your bank, broker or other nominee will only be permitted to vote your shares of KLXE Common Stock or QES Common Stock, as applicable, with respect to “non-routine” matters if you instruct your bank, broker or other nominee how to vote, but will be permitted to vote your shares with respect to “routine” matters. All of the proposals currently scheduled for consideration
 
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at the KLXE Annual Meeting, other than the KLXE Auditor Proposal, and all of the proposals currently scheduled for consideration at the QES Special Meeting, are “non-routine” matters. To make sure that your shares are voted with respect to such matters, you should instruct your bank, broker or other nominee how you wish to vote your shares in accordance with the procedures provided by your bank, broker or other nominee regarding the voting of your shares.
For KLXE 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 KLXE Reverse Stock Split Proposal and, assuming your bank, broker or other nominee is present on your behalf at the KLXE Annual Meeting, will be the same as a vote “against” the KLXE Share Issuance Proposal, the KLXE LTIP Amendment Proposal, the KLXE ESPP Amendment Proposal, the KLXE Auditor Proposal (except in the event your bank, broker or other nominee exercises its discretionary authority to vote “for” the KLXE Auditor Proposal) and the KLXE Adjournment Proposal, but will have no effect on the KLXE Director Election Proposal.
For QES 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 QES Merger Proposal, and assuming your bank, broker or other nominee is present on your behalf at the QES Special Meeting, will be the same as a vote “against” the QES Adjournment Proposal.
Q:
What should I do if I receive more than one set of voting materials for a stockholder meeting?
A:
If you hold shares of KLXE Common Stock or QES Common Stock in “street name” and also directly in your name as a stockholder of record or otherwise, or if you hold shares of KLXE Common Stock or QES Common Stock in more than one brokerage account, you may receive more than one set of voting materials relating to the KLXE Annual Meeting or the QES Special Meeting, as applicable.
Record Holders.   For shares held directly, please complete, sign, date and return each proxy card, or 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 KLXE Common Stock or QES 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 KLXE Common Stock or QES 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 KLXE Common Stock or QES Common Stock in the way that you indicate. When completing the proxy card or the Internet or telephone processes, you may specify whether your shares of KLXE Common Stock or QES 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 KLXE Annual Meeting or the QES Special Meeting, as applicable.
Q:
How will my shares of KLXE 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 KLXE Common Stock to be voted, then your shares of KLXE Common Stock will be voted “FOR” the KLXE Share Issuance Proposal, “FOR” the KLXE Reverse Stock Split Proposal, “FOR” the KLXE LTIP Amendment Proposal , “FOR” the KLXE Director Election Proposal, “FOR” the KLXE ESPP Amendment Proposal, “FOR” the KLXE Auditor Proposal and “FOR” the KLXE Adjournment Proposal.
Q:
How will my shares of QES 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 QES Common Stock to be voted, then your shares of QES Common Stock will be voted “FOR” the QES Merger Proposal and “FOR” the QES Adjournment Proposal.
 
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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 KLXE Annual Meeting or the QES Special Meeting, as applicable, by:

subsequently submitting a new proxy, whether by submitting a new proxy card or 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 KLXE’s corporate secretary or QES’s corporate secretary, as applicable; or

revoking your proxy and voting at the KLXE Annual Meeting or the QES Special Meeting, as applicable.
Execution or revocation of a proxy will not in any way affect your right to attend the KLXE Annual Meeting or the QES Special Meeting, as applicable, and vote. Written notices of revocation and other communications with respect to the revocation of proxies should be addressed:
if you are a KLXE stockholder, to:
if you are a QES stockholder, to:
KLX Energy Services Holdings, Inc.
Attn: Corporate Secretary
1300 Corporate Center Way
Wellington, Florida 33414
Quintana Energy Services Inc.
Attn: Corporate Secretary
1415 Louisiana, Suite 2900
Houston, TX 77002
For more information, please see “The KLXE Annual Meeting — Revocation of Proxies” and “The QES Special Meeting — Revocation of Proxies,” 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?
A:
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 KLXE Annual Meeting and the QES Special Meeting?
A:
The preliminary voting results for each of the KLXE Annual Meeting and the QES Special Meeting will be announced at each such meeting. In addition, within four business days of each of the KLXE Annual Meeting and the QES Special Meeting, each of KLXE and QES intends to file the final voting results of its respective meeting with the SEC on a Current Report on Form 8-K.
Q:
Do KLXE stockholders and QES stockholders have appraisal rights or dissenters’ rights, as applicable?
A:
No. KLXE stockholders and QES stockholders are not entitled to appraisal or dissenters’ rights in connection with the merger or the reverse stock split under Section 262 of the DGCL.
Q:
Are there any risks that I should consider in deciding whether to vote for the approval of the KLXE Share Issuance Proposal or the QES Merger 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 KLXE and QES contained in the reports of KLXE and QES which are attached to this joint proxy statement/prospectus.
Q:
Do any of the officers or directors of KLXE have interests in the merger that may differ from or be in addition to my interests as a KLXE stockholder?
A:
Yes. In considering the recommendation of the KLXE Board that KLXE stockholders vote to approve the KLXE Share Issuance Proposal, KLXE stockholders should be aware that KLXE’s directors and
 
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executive officers have interests in the merger that are different from, or in addition to, the interests of KLXE stockholders generally. The KLXE Board was aware of and considered these differing interests, to the extent such interests existed at the time, among other matters, in evaluating and negotiating the Merger Agreement and the merger, and in unanimously recommending that KLXE stockholders vote to approve the KLXE Share Issuance Proposal. See “The Merger — Interests of KLXE’s Directors and Executive Officers in the Merger.”
Q:
Do any of the officers or directors of QES have interests in the merger that may differ from or be in addition to my interests as a QES stockholder?
A:
Yes. In considering the recommendation of the QES Board that QES stockholders vote to adopt the QES Merger Proposal, QES stockholders should be aware that QES’s directors and executive officers have interests in the merger that are different from, or in addition to, the interests of QES stockholders generally. The QES Board was aware of and considered these differing interests, to the extent such interests existed at the time, among other matters, in evaluating and negotiating the Merger Agreement and the merger, and in unanimously recommending that the Merger Agreement be adopted by QES stockholders. See “The Merger — Interests of QES’s Directors and Executive Officers in the Merger.”
Q:
What happens if I sell my shares of KLXE Common Stock or QES Common Stock after the respective record date but before the KLXE Annual Meeting or the QES Special Meeting, as applicable?
A:
The KLXE Record Date is earlier than the date of the KLXE Annual Meeting, and the QES Record Date is earlier than the date of the QES Special Meeting. If you transfer your shares of KLXE Common Stock or QES Common Stock after your respective record date but before the applicable stockholder meeting, you will, unless special arrangements are made, retain your right to vote at the KLXE Annual Meeting or the QES Special Meeting, as applicable.
Q:
Who will solicit and pay the cost of soliciting proxies?
A:
KLXE has engaged Georgeson LLC (the “KLXE Solicitation Agent”) to assist in the solicitation of proxies for the KLXE Annual Meeting. KLXE estimates that it will pay the KLXE Solicitation Agent a fee of approximately $9,000, plus reimbursement of reasonable out-of-pocket expenses. KLXE has agreed to indemnify the KLXE Solicitation Agent against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).
QES does not expect to engage a proxy solicitor to assist in the solicitation of proxies for the QES Special Meeting. Proxies will be solicited by officers and directors and regular employees of QES, but no additional compensation will be paid to them.
KLXE and QES 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 KLXE Common Stock and QES Common Stock, respectively. KLXE’s directors, officers and employees and QES’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 United States federal income tax consequences of the merger to QES stockholders?
A:
The merger is expected to be a taxable transaction pursuant to which holders of QES Common Stock will, in general, recognize gain or loss for U.S. federal income tax purposes as a result of their exchanges of QES Common Stock for KLXE Common Stock (and any cash in lieu of fractional shares). Please see “U.S. Federal Income Tax Consequences — Tax Consequences of the Merger” for further discussion.
Q:
What are the U.S. federal income tax consequences of the reverse stock split to U.S. Holders of KLXE Common Stock?
A:
The reverse stock split should constitute a “recapitalization” for U.S. federal income tax purposes. As a result, a KLXE stockholder generally should not recognize gain or loss upon the reverse stock split for U.S. federal income tax purposes. For U.S. federal income tax purposes, a U.S. holder’s or Non-U.S.
 
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holder’s (as such terms are defined below) aggregate U.S. tax basis in the shares of KLXE Common Stock received pursuant to the reverse stock split should equal the aggregate tax basis of the shares of KLXE Common Stock surrendered, and such holder’s holding period in the shares of KLXE Common Stock received should include the holding period in the shares of KLXE Common Stock surrendered.
Please see “U.S. Federal Income Tax Consequences — The Reverse Stock Split” for further discussion.
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 KLXE Share Issuance Proposal and the QES Merger Proposal, the merger is expected to close in the second half of calendar year 2020. However, neither KLXE nor QES 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. KLXE and QES hope to complete the merger as soon as reasonably practicable.
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, (i) receipt of the QES Required Vote, (ii)  receipt of the KLXE Required Vote, (iii) no injunction by any court or other tribunal of competent jurisdiction and no law enacted by any governmental entity of competent jurisdiction which prohibits the consummation of the merger having been entered into and continuing to be in effect, (iv) the shares of KLXE Common Stock to be issued in the merger and such other shares of KLXE Common Stock to be reserved for issuance in connection with the merger being approved for listing on Nasdaq, and (v) the registration statement on Form S-4 having been declared effective by the SEC under the Securities Act, no stop order suspending the effectiveness of the registration statement on Form S-4 having been issued by the SEC, and no proceedings for that purpose having been commenced or threatened by the SEC. The obligation of each of KLXE and QES to consummate the merger is also conditioned on, among other things, (i) the accuracy of the representations and warranties as set forth by each party in the Merger Agreement, (ii) the performance by each party, in all material respects, of its obligations under the Merger Agreement required to be performed at or prior to the Effective Time, (iii) the delivery by each party to the other party of a certificate of the chief executive officer or other senior officer certifying that the required conditions have been satisfied and (iv) QES having delivered the required payoff letter for the QES ABL Facility to KLXE and KLXE having delivered the Payoff Funds in accordance with the payoff letter for the QES ABL Facility. No assurance can be given that the required stockholder 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 KLXE and QES not to realize, or to be delayed in realizing, some or all of the benefits that KLXE and QES 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 QES stockholder, how will I receive the merger consideration to which I am entitled?
A:
If you hold your shares of QES 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 KLXE Common Stock. After the completion of the merger, shares of QES Common Stock held through DTC in book-entry form will be automatically exchanged for shares of KLXE 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 KLXE Common Stock to which you would otherwise be entitled. If you hold your shares of QES 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 KLXE Common Stock and a
 
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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 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 KLXE Annual Meeting, the QES Special Meeting or the merger?
A:
If you have questions about the KLXE Annual Meeting, the QES Special Meeting or the merger, or desire additional copies of this joint proxy statement/prospectus or additional proxies, you may contact:
For KLXE stockholders:
For QES stockholders:
KLX Energy Services Holdings, Inc.
1300 Corporate Center Way
Wellington, Florida 33414
(561) 383-5100
Attention: Corporate Secretary
Quintana Energy Services Inc.
1415 Louisiana, Suite 2900
Houston, TX 77002
(832) 518-4094
Attention: Corporate Secretary
Georgeson LLC
1290 Avenue of the America’s, 9th Floor
New York, NY 10104
Stockholders, banks and brokers may call toll free:
1-800-509-1312
Or (781) 575-2137 (for all those outside of the U.S.)
 
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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 KLXE stockholder or a QES 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.
The Parties to the Merger (See page 45)
KLX Energy Services Holdings, Inc.
KLXE is a leading provider of completion, intervention and production services and products to the major onshore oil and gas producing regions of the United States. KLXE offers a range of differentiated, complementary technical services and related tools and equipment in challenging environments that provide “mission critical” solutions for its customers throughout the life cycle of the well. Shares of KLXE Common Stock are traded on Nasdaq under the symbol “KLXE.” KLXE’s principal executive offices are located at 1300 Corporate Center Way, Wellington, Florida 33414 and its telephone number is (561) 383-5100.
Quintana Energy Services Inc.
QES is a provider of diversified oilfield services to leading onshore oil and natural gas exploration and production companies operating in both conventional and unconventional plays in all of the active major basins throughout the U.S. QES’s primary services include directional drilling, snubbing, coiled tubing, wireline services and pressure pumping. QES offers a complementary suite of products and services to a broad customer base that is supported by in-house manufacturing, repair and maintenance capabilities. Shares of QES Common Stock are traded on the NYSE under the symbol “QES.” QES’s principal executive offices are located at 1415 Louisiana, Suite 2900, Houston, TX 77002 and its telephone number is (832) 518-4094.
Krypton Intermediate, LLC
Acquiror is an indirect wholly owned subsidiary of KLXE. Acquiror was formed by KLXE 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. Acquiror’s principal executive offices are located at 1300 Corporate Center Way, Wellington, Florida 33414 and its telephone number is (561) 383-5100.
Krypton Merger Sub, Inc.
Merger Sub is an indirect wholly owned subsidiary of KLXE and a direct subsidiary of Acquiror. Merger Sub was formed by KLXE 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 1300 Corporate Center Way, Wellington, Florida 33414 and its telephone number is (561) 383-5100.
The Merger and the Merger Agreement (See pages 88 and 132)
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 QES. At the Effective Time, the separate existence of Merger Sub will cease, with QES as the surviving corporation and an indirect wholly owned subsidiary of KLXE. Following the merger, QES Common Stock will be delisted from the NYSE, will be deregistered under the Exchange Act and will cease to be publicly traded.
 
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Merger Consideration (See page 133)
At the Effective Time, each share of QES Common Stock (other than QES Excluded Shares) will be converted into the right to receive 0.4844 shares of KLXE Common Stock, subject to adjustment in the event that the reverse stock split is effectuated prior to the Effective Time.
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 QES Common Stock and KLXE Common Stock. No fractional shares of KLXE Common Stock will be issued upon the conversion of shares of QES Common Stock pursuant to the Merger Agreement. Each QES stockholder who otherwise would have been entitled to receive a fraction of a share of KLXE Common Stock will be entitled to receive cash in lieu of a fractional share.
KLXE stockholders will continue to own their existing shares of KLXE Common Stock, which will not be affected by the merger.
The KLXE Annual Meeting (See page 47)
The KLXE Annual Meeting will be held virtually at           , on                 , 2020, at           a.m. Eastern Time. The KLXE Annual Meeting is being held to consider the following proposals which stockholders will be asked to vote on:
Proposals related to the merger:

Proposal 1 — the KLXE Share Issuance Proposal:   to approve the issuance of KLXE Common Stock to QES stockholders in connection with the merger;

Proposal 2 — the KLXE Reverse Stock Split Proposal:   to approve an amendment to the amended and restated certificate of incorporation of KLXE to effect a reverse stock split of KLXE’s Common Stock at a ratio of 1-for-10;

Proposal 3 — the KLXE LTIP Amendment Proposal:   to approve the amendment of KLXE’s Long-Term Incentive Plan to increase the number of shares issuable thereunder;
Proposals related to annual meeting items:

Proposal 4 — the KLXE Director Election Proposal:   to approve the election of two Class II Directors (Benjamin A. Hardesty and Stephen M. Ward, Jr.) to the KLXE Board for a three-year term;

Proposal 5 — the KLXE ESPP Amendment Proposal:   to approve the amendment of KLXE’s Employee Stock Purchase Plan to increase the number of shares issuable thereunder;

Proposal 6 — the KLXE Auditor Proposal:   to ratify the appointment of Deloitte & Touche LLP to serve as KLXE’s independent auditor; and
An adjournment proposal:

Proposal 7 — the KLXE Adjournment Proposal:   to approve the adjournment of the KLXE Annual Meeting to solicit additional proxies if there are not sufficient votes at the time of the KLXE Annual Meeting to approve any of the KLXE Share Issuance Proposal, the KLXE Reverse Stock Split Proposal, the KLXE LTIP Amendment Proposal, the KLXE Director Election Proposal, the KLXE ESPP Amendment Proposal or the KLXE Auditor Proposal, or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to KLXE stockholders.
Completion of the merger is conditioned on the approval of the KLXE Share Issuance Proposal by KLXE stockholders.
Approval of the KLXE Reverse Stock Split Proposal, the KLXE LTIP Amendment Proposal, the KLXE Director Election Proposal, the KLXE ESPP Amendment Proposal, the KLXE Auditor Proposal and the KLXE Adjournment Proposal are not conditions to the obligation of either KLXE or QES to complete the merger.
 
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Only holders of record of outstanding shares of KLXE Common Stock as of the close of business on           , 2020, the KLXE Record Date, are entitled to notice of, and to vote at, the KLXE Annual Meeting or any adjournment or postponement of the KLXE Annual Meeting. KLXE stockholders may cast one vote for each share of KLXE Common Stock that KLXE stockholders owned as of the KLXE Record Date.
Assuming a majority of the total voting power of all outstanding shares of KLXE Common Stock generally entitled to vote at a meeting of stockholders (for purposes of the KLXE Annual Meeting, a “quorum”) is present at the KLXE Annual Meeting, approval of each of the KLXE Share Issuance Proposal, the KLXE LTIP Amendment Proposal, the KLXE ESPP Amendment Proposal, and the KLXE Auditor Proposal, and, in the event that a quorum is not present, approval of the KLXE Adjournment Proposal, requires the affirmative vote of a majority of the shares of KLXE Common Stock present at the KLXE Annual Meeting and entitled to vote thereat. Accordingly, if a KLXE stockholder is present or represented by proxy at the meeting, a KLXE stockholder’s abstention from voting or the failure of a KLXE stockholder to vote (including the failure of a KLXE 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, which will result in a broker non-vote) will have the same effect as a vote “against” the KLXE Share Issuance Proposal, the KLXE LTIP Amendment Proposal, the KLXE ESPP Amendment Proposal, the KLXE Adjournment Proposal and the KLXE Auditor Proposal (except in the event a bank, broker or other nominee exercises its discretionary authority to vote “for” the KLXE Auditor Proposal).
Under the KLXE Charter, in order for a director to be elected at the KLXE Annual Meeting pursuant to the KLXE Director Election Proposal, a plurality of the voting power of the shares of KLXE Common Stock entitled to vote on the election of directors and present in person or by proxy at the KLXE Annual Meeting must be cast “for” the director. Accordingly, a KLXE stockholder’s abstention from voting, a broker non-vote or the failure of a KLXE stockholder to vote (including the failure of a KLXE 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 vote with respect to the KLXE Director Election Proposal.
Assuming a quorum is present at the KLXE Annual Meeting, the KLXE Reverse Stock Split Proposal requires the affirmative vote of a majority of the outstanding shares of KLXE Common Stock entitled to vote thereon. Accordingly, a KLXE stockholder’s abstention from voting, a broker non-vote or the failure of a KLXE stockholder to vote (including the failure of a KLXE 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 KLXE Reverse Stock Split Proposal.
The approval of the KLXE Adjournment Proposal requires the affirmative vote of a majority of the shares of KLXE Common Stock present at the KLXE Annual Meeting and entitled to vote thereat. Accordingly, if a KLXE stockholder is present or represented by proxy at the meeting, a KLXE stockholder’s abstention from voting or the failure of a KLXE stockholder to vote (including the failure of a KLXE 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, which will result in a broker non-vote) will have the same effect as a vote “against” the KLXE Adjournment Proposal.
KLXE Support Agreement (See page 155)
Concurrently with the execution of the Merger Agreement, QES entered into the KLXE Support Agreement (a copy of which is attached as Annex H to the joint proxy statement/prospectus) with Mr. Amin J. Khoury, the former Chairman, Chief Executive Officer and President of KLXE and current member of the KLXE Board, pursuant to which Mr. Khoury has agreed, subject to the terms and conditions thereof, to vote his shares of KLXE Common Stock (which represent approximately 4.7% of the outstanding shares of KLXE Common Stock) in favor of the KLXE Share Issuance Proposal at the KLXE Annual Meeting. For more information, please see “The Merger Agreement — KLXE Support Agreement.”
The QES Special Meeting (See page 81)
The QES Special Meeting will be held virtually at           , on           , 2020, beginning at           a.m. Central Time. The QES Special Meeting is being held to consider and vote on the following proposals:
 
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Proposal 1 — the QES Merger Proposal: to adopt the Merger Agreement, pursuant to which, among other things, each outstanding share of QES Common Stock (other than QES Excluded Shares) will be cancelled and converted into the right to receive 0.4844 shares of KLXE Common Stock; and

Proposal 2 — the QES Adjournment Proposal: to approve the adjournment of the QES Special Meeting to solicit additional proxies if there are not sufficient votes at the time of the QES Special Meeting to approve the QES Merger Proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to QES stockholders.
Completion of the merger is conditioned on the approval of the QES Merger Proposal by QES stockholders. Approval of the QES Adjournment Proposal is not a condition to the obligation of either QES or KLXE to complete the merger.
Only holders of record of outstanding shares of QES Common Stock as of the close of business on                 , 2020, the QES Record Date, are entitled to notice of, and to vote at, the QES Special Meeting or any adjournment or postponement of the QES Special Meeting. QES stockholders may cast one vote for each share of QES Common Stock owned as of the QES Record Date.
Assuming a majority of the total voting power of all outstanding shares of QES Common Stock generally entitled to vote at a meeting of stockholders (for purposes of the QES Special Meeting, a “quorum”) is present in person or represented by proxy at the QES Special Meeting, the QES Merger Proposal requires the affirmative vote of a majority of the outstanding shares of QES Common Stock entitled to vote thereon. Accordingly, a QES stockholder’s abstention from voting or the failure of a QES stockholder to vote (including the failure of a QES 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 QES Merger Proposal.
The approval of the QES Adjournment Proposal requires the affirmative vote of a majority of the voting power of the shares of QES Common Stock present in person or represented by proxy at the QES Special Meeting. Accordingly, a QES stockholder’s abstention from voting will have the same effect as a vote “against” the QES Adjournment Proposal. The failure of a QES stockholder to attend the QES Special Meeting and vote (including the failure of a QES 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 QES Adjournment Proposal.
QES Support Agreement (See page 154)
Concurrently with the execution of the Merger Agreement, KLXE entered into the QES Support Agreement (a copy of which is attached as Annex G to the joint proxy statement/prospectus) with each of the QES Principal Stockholders pursuant to which the QES Principal Stockholders have agreed, subject to the terms and conditions thereof, to vote their shares of QES Common Stock (which represents approximately 76% of the outstanding shares of QES Common Stock) in favor of the QES Merger Proposal at the QES Special Meeting. For more information, please see “The Merger Agreement — QES Support Agreement.” For more information regarding the security ownership of the QES Principal Stockholders, please see “Certain Beneficial Owners of QES Common Stock.”
Recommendation of the KLXE Board Related to the Merger Proposals and Reasons for the Merger (See page 96)
The KLXE Board unanimously recommends that KLXE stockholders vote “FOR” the KLXE Share Issuance Proposal, “FOR” the KLXE Reverse Stock Split Proposal, “FOR” the KLX LTIP Amendment Proposal and “FOR” the KLXE Adjournment Proposal. In reaching its determinations and recommendations, the KLXE Board consulted with KLXE 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 KLXE Board’s positive view of the ability of the combined company to expand as a leading provider of production, completion and drilling solutions offering a broad range of asset-light services across all major U.S. basins;
 
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the expectation that the combined company would generate at least $40 million of annualized run-rate cost synergies within 12 months based on cost reductions expected to be achieved by rationalizing KLXE’s corporate headquarters in Wellington, Florida, combining KLXE and QES Houston-area locations, consolidating redundant facilities in key basins and reducing field expenses;

the expectation that the combined company will have substantial scale as the foremost U.S. provider of large-diameter coiled tubing services and will operate one of the largest U.S. wireline fleets;

the expectation that the combined company will rationalize two of the largest fleets of coiled tubing and wireline assets, which will dramatically reduce future capital spending requirements and which will facilitate the pull-through of KLXE’s asset-light products and services;

the expectation that, as a result of the increased scale, improved balance sheet, and liquid public currency, the combined company will be well-positioned to execute KLXE’s strategy to pursue additional value-creating consolidation opportunities within the oilfield services industry;

the Exchange Ratio and merger consideration, including that KLXE stockholders will own approximately 59% of the issued and outstanding shares of KLXE following consummation of the merger (based on fully diluted shares outstanding of KLXE), and its evaluation of the Exchange Ratio relative to the intrinsic value of shares of KLXE Common Stock over various periods and relative to its current assessment of the cost synergies and other benefits of the merger;

the structure of the transaction, including the terms of the Merger Agreement providing for the governance of KLXE and the establishment of an Integration Committee of the board of the combined company following completion of the merger;

certain other factors considered by the KLXE Board, including historical information concerning KLXE’s and QES’s respective businesses, financial condition, results of operations, earnings, trading prices, managements, competitive positions and prospects on a projected combined basis, and the current and prospective business environment in which KLXE and QES operate, including national and local economic conditions, the competitive and regulatory environment, and the likely effect of these factors on KLXE; 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.
For a more complete description of the factors considered by the KLXE 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 KLXE Board, please see “The Merger — Recommendation of the KLXE Board and Reasons for the Merger.”
Recommendation of the KLXE Board Related to the Annual Meeting Proposals (See page 48)
The KLXE Board unanimously recommends that KLXE stockholders vote “FOR” the KLXE Director Election Proposal, “FOR” the KLXE ESPP Amendment Proposal, “FOR” the KLXE Auditor Proposal and “FOR” the KLXE Adjournment Proposal.
Recommendation of the QES Board and Reasons for the Merger (See page 99)
The QES Board has unanimously determined that it is in the best interests of the stockholders of QES to enter into the Merger Agreement and has unanimously approved and declared advisable the Merger Agreement and the transactions contemplated thereby, including the merger. The QES Board unanimously recommends that QES stockholders vote “FOR” the QES Merger Proposal and “FOR” the QES Adjournment Proposal, if necessary or appropriate to solicit additional proxies. In reaching its decision to approve the Merger Agreement and recommend its adoption by the QES stockholders, the QES Board consulted with QES 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 expectation that within 12 months of completion of the merger, the combined company would generate at least $40 million of annualized run-rate cost synergies based on cost reductions through
 
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combining KLXE’s and QES’s Houston-area locations, eliminating KLXE’s corporate headquarters in Wellington, Florida and consolidating redundant facilities in key basins and reducing field expenses;

the expectation that the combined company will have a strong liquidity profile in light of KLXE’s existing cash balance, revolver availability and debt maturity schedule, QES’s leverage position, and the benefits of the expected cost savings from the merger;

the expectation that the increased scale and scope, balance sheet and liquidity profile of the combined company will better position it to pursue consolidation opportunities;

the QES Board’s positive view of the ability of the combined company to expand as a leading provider of drilling, completion and production technologies, with a leading independent directional drilling franchise;

the expectation that the combined company will have increased scale as the foremost U.S. provider of large-diameter coiled tubing services and will operate one of the largest U.S. wireline fleets;

the fact that QES stockholders will own approximately 41% of the combined company immediately following completion of the merger and will continue to participate in potential appreciation in equity value of the combined company;

the governance arrangements under the Merger Agreement, pursuant to which (i) Christopher J. Baker, President and Chief Executive Officer of QES, and Keefer M. Lehner, Executive Vice President and Chief Financial Officer of QES, will continue to serve as President and Chief Executive Officer, and Executive Vice President and Chief Financial Officer, respectively, of the combined company upon completion of the merger; (ii) the combined company’s board of directors will include four QES directors; and (iii) each committee of the combined company’s board will be composed of an equal number of QES and KLXE directors, with a QES director serving as chairman of the compensation committee;

certain other factors considered by the QES Board, including historical and current information concerning KLXE’s and QES’s respective business operations, financial condition, results of operations, earnings, trading prices and activity, management, competitive positions and prospects on a projected combined basis; QES’s current liquidity position and its ability to meet its cash requirements, financial obligations and covenants contained in its revolving credit facility; and QES’s access to capital and available financing or re-financing alternatives; 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.
For a more complete description of the factors considered by the QES 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 QES Board, please see “The Merger — Recommendation of the QES Board and Reasons for the Merger.”
Opinion of KLXE’s Financial Advisor (See page 111 and Annex E)
On May 3, 2020, at a meeting of the KLXE Board, Goldman Sachs rendered its oral opinion, subsequently confirmed in writing, that, as of the date of the written opinion and based upon and subject to the factors and assumptions set forth therein, the Exchange Ratio pursuant to the Merger Agreement was fair, from a financial point of view, to KLXE.
The full text of the written opinion of Goldman Sachs, dated May 3, 2020, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex E. Goldman Sachs provided advisory services and its opinion for the information and assistance of the KLXE Board in connection with its consideration of the merger. The Goldman Sachs opinion does not constitute a recommendation as to how any holder of KLXE Common Stock should vote with respect to the merger or any other matter.
 
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Opinion of QES’s Financial Advisor (See page 115 and Annex F)
QES retained Tudor Pickering Holt & Co Advisors LP (“TPH”) as its financial advisor in connection with a potential sale of, or other business combination involving, QES. On May 3, 2020, TPH rendered to the QES Board its oral opinion, which was subsequently confirmed by delivery of a written opinion dated May 3, 2020, that, based upon and subject to the limitations, qualifications and assumptions set forth in its opinion, as of the date of the opinion, the merger consideration to be paid to the holders of outstanding shares of QES Common Stock pursuant to the Merger Agreement was fair, from a financial point of view, to such holders.
The full text of the opinion, dated May 3, 2020, which sets forth, among other things, the assumptions made, procedures followed, matters considered, and qualifications and limitations on the scope of review undertaken by TPH in rendering its opinion, is incorporated by reference into this joint proxy statement/prospectus and attached as Annex F hereto. The summary of TPH’s opinion set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of the opinion. QES stockholders are urged to read the TPH opinion carefully and in its entirety. TPH’s advisory services and its opinion were provided for the information and assistance of the QES Board in connection with its consideration of the transactions contemplated by the Merger Agreement, and its opinion does not constitute a recommendation as to how any holder of interests in QES or KLXE should vote with respect to the transactions contemplated by Merger Agreement or any other matter.
For additional information, see the section entitled “The Merger — Opinion of QES’s Financial Advisor” beginning on page 115 and Annex F.
Board of Directors and Management of KLXE Following the Merger (See pages 123 and 156)
The Merger Agreement provides that, among other things, as of the Effective Time, the KLXE Board will be comprised of nine directors, consisting of (a) five KLXE Designees and (b) four QES Designees. At the Effective Time, (i) Christopher J. Baker, the current President and Chief Executive Officer of QES, will serve as President and Chief Executive Officer of KLXE, (ii) Keefer M. Lehner, the current Executive Vice President and Chief Financial Officer of QES, will serve as Executive Vice President and Chief Financial Officer of KLXE, (iii) John T. Collins, the current Chairman of the KLXE Board, will serve as Non-Executive Chairman of the KLXE Board, (iv) Thomas P. McCaffrey, the current President, Chief Executive Officer and Chief Financial Officer of KLXE and a current member of the KLXE Board, will serve as a director on the KLXE Board and Chairman of the Integration Committee and (v) Amin J. Khoury, the former Chairman, Chief Executive Officer and President of KLXE and current member of the KLXE Board, will resign from the KLXE Board and continue to provide strategic advice to KLXE as a consultant. The Merger Agreement provides that KLXE will have, in addition to other committees, the KLXE Integration Committee, which will be charged with overseeing the integration of the combined company following the Effective Time. The KLXE Integration Committee will consist of Thomas P. McCaffrey as chair, one additional director designated by KLXE and two directors designated by QES.
Pursuant to KLXE’s amended and restated certificate of incorporation, the KLXE Board is divided into three classes, each as nearly equal in number as possible, so that each director (in certain circumstances after a transitional period) will serve for three years, with one class of directors being elected each year. Two QES Designees and one KLXE Designee will be allocated to the class of directors whose term expires at the 2021 KLXE annual meeting (Class III), two KLXE Designees and one QES Designee will be allocated to the class of directors whose term expires at the 2022 KLXE annual meeting (Class I) and two KLXE Designees and one QES Designee will be allocated to the class of directors whose term expires at the 2023 KLXE annual meeting (Class II). The individuals expected to serve on the KLXE Board following the Effective Time include, as KLXE Designees: John T. Collins, Richard G. Hamermesh, Thomas P. McCaffrey, Stephen M. Ward, Jr., and John T. Whates, Esq., and as QES Designees: Dalton Boutté, Jr., Gunnar Eliassen, Corbin J. Robertson, Jr., and Dag Skindlo. Following the Effective Time, Gunnar Eliassen, Richard G. Hamermesh and John T. Whates, Esq., will serve as Class I Directors, John T. Collins, Dag Skindlo and Stephen M. Ward, Jr., will serve as Class II Directors and Dalton Boutté, Jr., Thomas P. McCaffrey and Corbin J. Robertson, Jr., will serve as Class III Directors.
 
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Interests of KLXE’s Directors and Executive Officers in the Merger (See page 124)
When considering the recommendations of the KLXE Board that you vote “FOR” the KLXE Share Issuance Proposal, KLXE stockholders should be aware that, aside from their interests as KLXE stockholders, KLXE’s directors and executive officers have interests in the merger that are different from, or in addition to, the interests of other KLXE stockholders generally. The KLXE Board was aware of such interests during its deliberations on the merits of the merger and in deciding to recommend that KLXE stockholders vote “FOR” the KLXE Share Issuance Proposal at the KLXE Annual Meeting on           , 2020.
With respect to directors serving on the KLXE Board, these interests include the impact of the transaction on the KLXE directors’ outstanding equity awards and the provision of indemnification and insurance arrangements pursuant to KLXE’s amended and restated certificate of incorporation and amended and restated bylaws.
With respect to KLXE’s executive officers, these interests relate to the possible receipt of the following types of payments and benefits that may be triggered by or otherwise relate to the merger:

accelerated vesting of then outstanding equity awards;

cash severance payments and other termination benefits pursuant to certain executive officers’ employment agreements; and

accelerated vesting of account balances under KLXE’s 2018 Deferred Compensation Plan.
Treatment of Existing KLXE Equity Awards in the Merger (See page 124)
Each KLXE director’s restricted stock awards that are outstanding immediately prior to the Effective Time will become fully vested, as will restricted stock awards held immediately prior to the Effective Time by KLXE’s executive officers and certain other KLXE employees whose employment is terminated in connection with the merger. All other KLXE equity awards will remain in effect in accordance with their terms and will not be affected by the merger.
Interests of QES’s Directors and Executive Officers in the Merger (See page 126)
When considering the recommendation of the QES Board that QES stockholders vote “FOR” the QES Merger Proposal, QES stockholders should be aware that, aside from their interests as QES stockholders, QES’s directors and executive officers have interests in the merger that are different from, or in addition to, the interests of other QES stockholders generally. The QES Board was aware of such interests during its deliberations on the merits of the merger and in deciding to recommend that QES stockholders vote “FOR” the QES Merger Proposal at the QES Special Meeting on           , 2020.
These interests include:

with respect to certain directors serving on the QES Board, positions on the board of directors of KLXE upon completion of the merger;

with respect to QES’s executive officers, entry into employment agreements with KLXE, effective as of the Effective Time, on terms substantially similar to their current employment agreements with QES;

QES’s President and Chief Executive Officer becoming the President and Chief Executive Officer of KLXE, and QES’s Executive Vice President and Chief Financial Officer becoming the Executive Vice President and Chief Financial Officer of KLXE, upon completion of the merger;

a portion of 2020 annual bonuses, pro-rated for the period from January 1, 2020 to April 30, 2020, to be payable to QES’s continuing employees, including QES’s executive officers, if the Effective Time does not occur prior to the payment of QES’s annual bonuses in respect of 2020;

accelerated vesting of outstanding QES phantom units held by QES’s executive officers and QES restricted stock units held by QES’s non-employee directors pursuant to the terms of the awards and the conversion of QES’s executive officers’ other outstanding equity awards into equity awards
 
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based on KLXE Common Stock pursuant to the Merger Agreement, as described in “Treatment of Existing QES Long-Term Incentive Awards in the Merger” below;

the provision of indemnification and directors’ and officers’ liability insurance arrangements that will survive completion of the merger pursuant to the Merger Agreement; and

with respect to the chairman of the QES Board, certain rights granted to his affiliates pursuant to the Registration Rights Agreement.
Treatment of Existing QES Long-Term Incentive Awards in the Merger (See page 133)
Upon completion of the merger, outstanding QES equity awards will be affected as described below.
Each outstanding QES phantom unit award will become fully vested and will be cancelled in exchange for an aggregate number of shares of KLXE Common Stock equal to the product of (A) the number of shares of QES Common Stock subject to such QES phantom unit award and (B) the Exchange Ratio, rounded up to the nearest whole share of KLXE Common Stock, subject to withholding of shares of KLXE Common Stock for applicable income and employment withholding taxes.
Each QES RSU (other than QES RSUs held by any non-employee director of QES), whether vested or unvested, that is outstanding at the Effective Time will be converted into a Converted RSU with respect to an aggregate number of shares of KLXE Common Stock equal to the product of (A) the number of shares of QES Common Stock subject to such QES RSU immediately prior to the Effective Time and (B) the Exchange Ratio, rounded up to the nearest whole share of KLXE Common Stock. Each such Converted RSU will be subject to the same terms and conditions, including any vesting requirements and terms of settlement, as were applicable to the converted QES RSU immediately prior to the Effective Time.
Non-employee directors of QES will not receive Converted RSUs. QES RSUs held by non-employee directors of QES at the Effective Time, whether vested or unvested, will instead become fully vested and will be cancelled at the Effective Time and exchanged for shares of KLXE Common Stock using the same conversion ratio as used to determine the number of shares of KLXE Common Stock to which the Converted RSUs will be subject.
Each QES PSU outstanding at the Effective Time, whether vested or unvested, will be converted into a Converted PSU with respect to an aggregate number of shares of KLXE Common Stock equal to the product of (A) (x) in the case of any QES PSU granted prior to 2020, the number of shares of QES Common Stock subject to such QES PSU, based upon the actual level of performance previously determined by QES’s Compensation Committee in accordance with the applicable QES PSU, rounded up to the nearest whole share, and (y) in the case of any QES PSU granted in 2020, the number of shares of QES Common Stock subject to such QES PSU, based upon the actual level of performance as of May 1, 2020 (the last trading day for QES Common Stock on the NYSE immediately prior to the date of announcement of the Merger Agreement), with strategic performance goals deemed satisfied at 100% and (B) the Exchange Ratio, rounded up to the nearest whole share. Each such Converted PSU will otherwise be subject to the same terms and conditions, including any vesting requirements and terms of settlement (other than as described below), as were applicable to the converted QES PSU immediately prior to the Effective Time.
The following Converted PSUs will be settled solely in cash at the time such Converted PSUs become fully vested: (i) the portion of Converted PSUs exchanged for QES PSUs granted in 2019 that were determined to have been earned based on discretionary performance goals and (ii) the portion of Converted PSUs exchanged for QES PSUs granted in 2020 that are subject to strategic performance goals.
Any Residual Shares will be converted into the number of shares of KLXE Common Stock equal to the product of the number of such Residual Shares and the Exchange Ratio. It is expected that there will be no Residual Shares.
Certain Beneficial Owners of KLXE Common Stock (See page 197)
At the close of business on                 , 2020, the latest practicable date prior to the date of this joint proxy statement/prospectus, KLXE’s directors and executive officers, as a group, beneficially owned and were entitled to vote approximately                 shares of KLXE Common Stock, collectively
 
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representing    % of the shares of KLXE Common Stock outstanding on                 , 2020. KLXE currently expects that all of its directors and executive officers will vote their shares “FOR” the KLXE Share Issuance Proposal, “FOR” the KLXE Reverse Stock Split Proposal, “FOR” the KLXE LTIP Amendment Proposal, “FOR” the KLXE Director Election Proposal, “FOR” the KLXE ESPP Amendment Proposal, “FOR” the KLXE Auditor Proposal, and “FOR” the KLXE Adjournment Proposal. For more information regarding the security ownership of KLXE directors and executive officers, please see “Certain Beneficial Owners of KLXE Common Stock.”
In addition, pursuant to the KLXE Support Agreement, Mr. Amin J. Khoury (who owns approximately 4.7% of the outstanding shares of KLXE Common Stock), the former Chairman, Chief Executive Officer and President of KLXE and current member of the KLXE Board, has agreed, subject to the terms and conditions thereof, to vote his shares of KLXE Common Stock in favor of the KLXE Share Issuance Proposal at the KLXE Annual Meeting. For a more complete discussion of the KLXE Support Agreement, please see “The Merger Agreement — KLXE Support Agreement.”
Certain Beneficial Owners of QES Common Stock (See page 199)
At the close of business on                 , 2020, the latest practicable date prior to the date of this joint proxy statement/prospectus, QES’s directors and executive officers and their affiliates, as a group, beneficially owned and were entitled to vote approximately                 shares of QES Common Stock, collectively representing    % of the shares of QES Common Stock outstanding on                 , 2020. QES currently expects that all of its directors and executive officers will vote their shares “FOR” the QES Merger Proposal and “FOR” the QES Adjournment Proposal. For more information regarding the security ownership of QES directors and executive officers, please see “Certain Beneficial Owners of QES Common Stock.”
In addition, pursuant to the QES Support Agreement, the QES Principal Stockholders (who own approximately 76% of the outstanding shares of QES Common Stock) have agreed, subject to the terms and conditions thereof, to vote their shares of QES Common Stock in favor of the QES Merger Proposal at the QES Special Meeting. Mr. Robertson, the current Chairman of the QES Board, is an affiliate of Robertson QES Investment LLC, Quintana Energy Partners — QES Holdings LLC, Quintana Energy Fund — TE, L.P. and Quintana Energy Fund — FI, L.P., each of which is party to the QES Support Agreement as a QES Principal Stockholder. For a more complete discussion of the QES Support Agreement, please see “The Merger Agreement — QES Support Agreement.”
Ownership of KLXE after the Merger
As of the date of this joint proxy statement/prospectus, based on the Exchange Ratio, the number of outstanding shares of QES Common Stock (plus the shares underlying outstanding QES phantom units and QES restricted stock units (but excluding cash settled Converted PSUs)) and the number of outstanding shares of KLXE Common Stock (including KLXE restricted stock), KLXE and QES estimate that holders of KLXE Common Stock (including KLXE restricted stock) as of immediately prior to the Effective Time will hold, in the aggregate, approximately 59% of the issued and outstanding shares of KLXE Common Stock immediately following the Effective Time, and holders of QES Common Stock, QES phantom units and QES restricted stock units as of immediately prior to the Effective Time will hold, in the aggregate, approximately 41% of the issued and outstanding shares of KLXE Common Stock (in each case based on fully diluted shares outstanding of KLXE) immediately following the Effective Time.
Conditions to the Completion of the Merger (See page 149)
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 QES Required Vote;

receipt of the KLXE Required Vote;

no injunction by any court or other tribunal of competent jurisdiction and no law enacted by any governmental entity of competent jurisdiction which prohibits the consummation of the merger having been entered into and continuing to be in effect;
 
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the shares of KLXE Common Stock to be issued in the merger and such other shares of KLXE Common Stock to be reserved for issuance in connection with the merger being approved for listing on Nasdaq; and

the registration statement on Form S-4 having been declared effective by the SEC under the Securities Act, no stop order suspending the effectiveness of the registration statement on Form S-4 having been issued by the SEC, and no proceedings for that purpose having been commenced or threatened by the SEC.
KLXE’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 QES as follows:

the representations and warranties of QES regarding organization, good standing, foreign qualification, and capital stock (as set forth in Sections 3.1 and 3.2 of the Merger Agreement) 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 closing date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case as of such date); and

each other representation and warranty of QES set forth in the Merger Agreement must be true and correct in all respects as of the date of the Merger Agreement and as of the closing date (except to the extent that any such representation and warranty expressly speaks of an earlier date, in which case as of such date), except where the failure of any such representation and warranty to be so true and correct in all respects (without giving effect to any limitation as to materiality or material adverse effect contained therein) would not reasonably be expected to have, individually or in the aggregate, a material adverse effect with respect to QES;

QES’s performance, in all material respects, of its obligations under the Merger Agreement required to be performed at or prior to the closing date;

QES having delivered to KLXE a certificate of the Chief Executive Officer or another senior officer dated as of the Effective Time certifying that the conditions described in the immediately preceding bullets with respect to representations and warranties and performance of obligations have been satisfied; and

QES having delivered the payoff letter for the QES ABL Facility to KLXE.
The obligation of QES 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 KLXE and Merger Sub as follows:

the representations and warranties of KLXE and Merger Sub regarding organization, good standing, foreign qualification, and capital stock (as set forth in Sections 4.1 and 4.2 of the Merger Agreement) 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 closing date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case as of such date); and

each other representation and warranty of KLXE and Merger Sub set forth in the Merger Agreement must be true and correct in all respects as of the date of the Merger Agreement and as of the closing date (except to the extent that any such representation and warranty expressly speaks of an earlier date, in which case as of such date), except where the failure of any such representation and warranty to be so true and correct in all respects (without giving effect to any limitation as to materiality or material adverse effect contained therein) would not reasonably be expected to, individually or in the aggregate, have a material adverse effect with respect to KLXE;

KLXE’s performance, in all material respects, of its obligations under the Merger Agreement required to be performed at or prior to the Effective Time;
 
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KLXE having delivered to QES a certificate of the Chief Executive Officer or another senior officer dated as of the Effective Time certifying that the conditions described in the immediately preceding bullets with respect to representations and warranties and performance of obligations have been satisfied; and

KLXE having delivered the Payoff Funds in accordance with the payoff letter for the QES ABL Facility.
No Solicitation of Acquisition Proposals (See page 141)
Each of KLXE and QES has agreed that neither it nor any of its subsidiaries will, and that it will use its reasonable best efforts to cause its and its subsidiaries’ Representatives not to, directly or indirectly:

solicit, initiate, seek or knowingly encourage or facilitate the making, submission or announcement of any proposal that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal (as defined under “The Merger Agreement — Covenants — No Solicitation of Acquisition Proposals”);

furnish any non-public information regarding such party or any of its subsidiaries to, or afford access to the properties, books and records of such party to, any person, in connection with or in response to an Acquisition Proposal;

engage or participate in any discussions or negotiations with any person with respect to an Acquisition Proposal;

approve, endorse or recommend any Acquisition Proposal; or

enter into any letter of intent, memorandum of understanding, merger agreement, acquisition agreement or any other agreement providing for any acquisition transaction, except where the Merger Agreement has been validly terminated.
Notwithstanding the restrictions described above, prior to, but not after, the time (i) the KLXE Required Vote or the QES Required Vote, as applicable, is obtained, in response to an unsolicited, written Acquisition Proposal received after the date of the Merger Agreement that the KLXE Board or the QES Board, as applicable, concludes in good faith, after consultation with its financial advisors, constitutes or is reasonably expected to result in a Superior Offer (as defined under “The Merger Agreement — Covenants — Permitted Change of Recommendation — Superior Offer”), KLXE or QES, as applicable, may:

furnish any non-public information regarding such party or any of its subsidiaries to, or afford access to the properties, books and records of such party to, any person, in connection with or in response to an Acquisition Proposal; or

engage or participate in any discussions or negotiations with any person with respect to an Acquisition Proposal;
in each case if, and only if, prior to taking any such action, the KLXE Board or the QES Board, as applicable, (i) determines in good faith after consultation with its outside legal counsel that failure to engage in such activities would reasonably be expected to be inconsistent with its directors’ fiduciary duties under applicable law, (ii) such Acquisition Proposal did not result from a breach of the non-solicitation provisions, (iii) such party provides notice to the other party within 24 hours of receipt of the Acquisition Proposal, and (iv) 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 KLXE or QES, as applicable, and which confidentiality agreement does not limit or modify compliance by either KLXE or QES, as applicable, with the non-solicitation provisions.
No Change of Recommendation (See page 142)
Subject to certain exceptions described below, neither the KLXE Board, including any committee thereof, nor the QES Board, may make a Change of Recommendation, or cause or permit KLXE or QES,
 
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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 Offer
Prior to, but not after, the time the KLXE Required Vote or the QES Required Vote, as applicable, is obtained, the KLXE Board or the QES Board, as applicable, 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 KLXE Board or the QES Board, 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 Offer and (ii) failure to consider such Acquisition Proposal would be reasonably likely 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 Offer.”
Permitted Change of Recommendation — Intervening Event
The KLXE Board or the QES Board, as applicable, may effect a Change of Recommendation if an Intervening Event has occurred, and prior to taking such action, the KLXE Board or the QES Board 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.”
KLXE Annual Meeting (See page 144)
Pursuant to the Merger Agreement, in accordance with applicable law and its organizational documents, KLXE must take all action necessary to convene the KLXE Stockholders’ Meeting as promptly as practicable after the registration statement on Form S-4, of which this joint proxy statement/prospectus forms a part, is declared effective, to consider and vote upon the approval of the KLXE Stock Issuance, the KLXE Charter Amendment and the KLXE Plan Amendment. Subject to the right of the KLXE Board to effect a Change of Recommendation in accordance with the terms of the Merger Agreement, KLXE must use reasonable best efforts to solicit from its stockholders’ proxies in favor of each of the KLXE Stock Issuance, the KLXE Charter Amendment and the KLXE Plan Amendment.
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 KLXE to call, give notice of, convene and hold the KLXE Stockholder Meeting to consider and vote upon the KLXE Stock Issuance, the KLXE Charter Amendment and the KLXE Plan Amendment will not be limited or otherwise affected by the making, commencement, disclosure, announcement or submission of any Acquisition Proposal or Superior Offer, or by any Change of Recommendation.
It is a condition to the closing of the merger that the KLXE stockholders approve the KLXE Stock Issuance Proposal at the KLXE Annual Meeting.
QES Special Meeting (See page 144)
Pursuant to the Merger Agreement, in accordance with applicable law and its organizational documents, QES must take all action necessary to convene a meeting of its stockholders (the “QES Stockholders’ Meeting”) as promptly as practicable after the registration statement on Form S-4 of which this joint proxy statement/prospectus forms a part is declared effective, to consider and vote upon the adoption of the Merger Agreement and the approval of the transactions contemplated hereby, including the merger. Subject to the right of the QES Board to effect a Change of Recommendation in accordance with the terms of the Merger Agreement, QES must use reasonable best efforts to solicit from its stockholders proxies in favor of
 
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the adoption of the Merger Agreement and to take all other action necessary or advisable to secure the vote or consent of its stockholders required by the rules of the NYSE or applicable laws to obtain such approvals.
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 QES to call, give notice of, convene and hold the QES 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 Offer, or by any Change of Recommendation.
It is a condition to the closing of the merger that the QES stockholders approve the QES Merger Proposal at the QES Special Meeting.
Termination of the Merger Agreement (See page 150)
Termination by Mutual Consent
The Merger Agreement may be terminated and abandoned at any time prior to the Effective Time, whether before or after approval of the merger by the QES stockholders, by mutual written consent of KLXE and QES.
Termination by Either KLXE or QES
Either party may terminate the Merger Agreement if:

the merger has not been consummated prior to November 3, 2020;

there is an injunction termination event;

there is a regulatory restraint termination event; or

the KLXE Required Vote or QES 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 KLXE or QES.”
Termination by KLXE
KLXE may terminate the Merger Agreement and the merger may be abandoned at any time prior to the Effective Time (by action of the KLXE Board) if:

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

there has been a breach or failure to perform by QES of any of its representations, warranties, covenants or agreements set forth in the Merger Agreement such that the conditions to closing would not be satisfied and such breach is not curable prior to the End Date, or if curable prior to the End Date, has not been cured within 30 days after the receipt of written notice thereof by QES from KLXE; except that this right to terminate the Merger Agreement is not available if KLXE is in material breach of any of its representations, warranties, covenants or agreements set forth in the Merger Agreement; or

prior to the time the KLXE Required Vote is obtained, KLXE has complied with its obligations under the Merger Agreement with respect to a Superior Offer, in order to enter into a definitive agreement with respect to a Superior Offer, and in connection with such termination, KLXE pays to QES in immediately available funds the Termination Fee and reimburses QES for expenses of up to $1,500,000.
Termination by QES
QES may terminate the Merger Agreement and the merger may be abandoned at any time prior to the Effective Time (by action of the QES Board) if:
 
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prior to the time the KLXE Required Vote is obtained, the KLXE Board has made a Change of Recommendation;

there has been a breach or failure to perform by KLXE of any of its representations, warranties, covenants or agreements set forth in the Merger Agreement such that the conditions to closing would not be satisfied and such breach is not curable prior to the End Date, or if curable prior to the End Date, has not been cured within 30 days after the receipt of written notice thereof by KLXE from QES; except that this right to terminate the Merger Agreement is not available if QES is in material breach of any of its representations, warranties, covenants or agreements set forth in the Merger Agreement; or

prior to the time the QES Required Vote is obtained, QES has complied with its obligations under the Merger Agreement with respect to a Superior Offer, in order to enter into a definitive agreement with respect to a Superior Offer, and in connection with such termination, QES pays to KLXE in immediately available funds the Termination Fee and reimburses KLXE for expenses of up to $1,500,000.
Termination Fees (See page 151)
KLXE will be required to pay to QES a termination fee of $3,000,000 if the Merger Agreement is terminated:

by QES with respect to a KLXE Change of Recommendation following receipt by KLXE of a Superior Offer;

by QES with respect to a KLXE Change of Recommendation resulting from an Intervening Event; or

by KLXE in order to enter into a definitive agreement with respect to a Superior Offer.
QES will be required to pay to KLXE a termination fee of $3,000,000 if the Merger Agreement is terminated:

by KLXE with respect to a QES Change of Recommendation following receipt by QES of a Superior Offer;

by KLXE with respect to a QES Change of Recommendation resulting from an Intervening Event; or

by QES in order to enter into a definitive agreement with respect to a Superior Offer.
Expense Reimbursement (See page 152)
If the Merger Agreement is terminated by (i) either KLXE or QES due to the failure of QES to obtain the QES Required Vote (except when a QES Change of Recommendation has been effected as a result of a bankruptcy event involving KLXE), (ii) KLXE due to a QES Change of Recommendation (except when a QES Change of Recommendation has been effected as a result of a bankruptcy event involving KLXE) or (iii) QES in order to enter into a definitive agreement with respect to a Superior Offer, then QES will pay all of the reasonable and documented expenses incurred by or on behalf of KLXE and its subsidiaries in connection with the merger and transactions contemplated by the Merger Agreement, to KLXE by wire transfer of immediately available cash funds within two business days after QES’s receipt of reasonable documentation supporting such expense reimbursement, provided that such expense reimbursement shall not exceed $1,500,000.
If the Merger Agreement is terminated by (i) either KLXE or QES pursuant to a KLXE no vote termination due to the failure of KLXE to obtain the KLXE Required Vote (except when a KLXE Change of Recommendation has been effected as a result of a bankruptcy event involving QES), (ii) QES due to a KLXE Change of Recommendation (except when a KLXE Change of Recommendation has been effected as a result of a bankruptcy event involving QES) or (iii) KLXE in order to enter into a definitive agreement with respect to a Superior Offer, then, KLXE will pay all of the reasonable and documented expenses incurred by or on behalf of QES and its subsidiaries in connection with the merger and transactions contemplated
 
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by the Merger Agreement to QES by wire transfer of immediately available cash funds within two business days after KLXE’s receipt of reasonable documentation supporting such expense reimbursement, provided that such expense reimbursement shall not exceed $1,500,000.
Registration Rights Agreement (See page 145)
In connection with the execution of the Merger Agreement, the QES Principal Stockholders entered into a Registration Rights Agreement, dated as of May 3, 2020, with KLXE (the “Registration Rights Agreement”), relating to the shares of KLXE Common Stock to be issued as the merger consideration to such holders under the Merger Agreement, which agreement shall be effective as of the Effective Time. Pursuant to the Registration Rights Agreement, the QES Principal Stockholders shall have certain shelf, demand registration and piggyback rights upon the terms and subject to the conditions set forth therein. These rights are substantially similar to existing rights the QES Principal Stockholders have under an existing registration rights agreement with QES.
Accounting Treatment (See page 131)
KLXE and QES prepare their respective financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). The merger will be accounted for using the acquisition method of accounting, with KLXE being treated as the accounting acquirer. In identifying KLXE as the acquiring entity for accounting purposes, KLXE and QES 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 expectation that following the Effective Time holders of shares of KLXE Common Stock as of immediately prior to the Effective Time will hold, in the aggregate, approximately 59% of the issued and outstanding shares of KLXE Common Stock (based on fully diluted shares outstanding of KLXE) immediately following the Effective Time, the intended corporate governance structure of KLXE following the Effective Time, the intended senior management of KLXE following the Effective Time, and the terms of the share exchange. No single factor was the sole determinant in the overall conclusion that KLXE is the acquirer for accounting purposes; rather, all factors were considered in arriving at such conclusion.
U.S. Federal Income Tax Consequences of the Merger (See page 171)
The merger is expected to be a taxable transaction pursuant to which holders of QES Common Stock will, in general, recognize gain or loss for U.S. federal income tax purposes as a result of their exchanges of QES Common Stock for KLXE Common Stock (and any cash in lieu of fractional shares).
U.S. Federal Income Tax Consequences of the Reverse Stock Split (See page 171)
The reverse stock split should constitute a “recapitalization” for U.S. federal income tax purposes. As a result, a KLXE stockholder who is a U.S. holder (as defined in the section titled “U.S. Federal Income Tax Consequences”) generally should not recognize gain or loss upon the reverse stock split.
Fractional Shares (see page 133)
No fractional shares will be issued in connection with the merger or the reverse stock split. Instead, stockholders will receive cash for any fractional shares of KLXE Common Stock that such stockholder would otherwise receive in the merger or the reverse stock split. Any cash amounts to be received by a stockholder in respect of fractional shares will be aggregated and rounded to the nearest whole cent.
Comparison of Stockholders’ Rights (See page 179)
Upon completion of the merger, QES stockholders receiving shares of KLXE Common Stock will become stockholders of KLXE, and their rights will be governed by Delaware law and the governing corporate documents of KLXE in effect at the Effective Time. QES stockholders will have different rights once they become stockholders of KLXE due to differences between the governing corporate documents of QES and KLXE, as further described in “Comparison of Stockholders’ Rights.”
 
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Listing of KLXE Common Stock; Delisting and Deregistration of QES Common Stock (See page 147)
Prior to the Effective Time, KLXE will use its reasonable efforts to cause the shares of KLXE Common Stock to be issued in the merger to be approved for listing on Nasdaq, subject to official notice of issuance. If the merger is completed, QES Common Stock will be delisted from the NYSE and deregistered under the Exchange Act and QES will no longer be required to file periodic reports with the SEC with respect to QES Common Stock.
KLXE and QES will cooperate in taking, or causing to be taken, all actions reasonably necessary to cause the delisting of the QES Common Stock from the NYSE and the termination of QES’s registration under the Exchange Act, effective as of, or as soon as practicable following, the Effective Time.
Employee Matters (See page 147)
For the period commencing at the Effective Time and ending on the first anniversary of the closing date (or, if earlier, for so long as they are employed), QES employees as of the Effective Time (the “Continuing Employees”) will be provided with compensation and employee benefits that are substantially comparable in the aggregate to the compensation and employee benefits made available to such Continuing Employees immediately prior to the Effective Time, without regard to any voluntary temporary salary reductions instituted in connection with COVID-19 and industry disruptions; provided that KLXE will be deemed to have satisfied the foregoing obligations by providing Continuing Employees with compensation and employee benefits that are no less favorable in the aggregate to the compensation and employee benefits made available to similarly situated employees of KLXE and its subsidiaries (other than QES and its subsidiaries). In the event that the Effective Time occurs prior to QES paying annual cash incentives in respect of 2020, amounts totaling $610,000 in the aggregate will be paid to Continuing Employees within 30 days following the closing date in respect of pro-rated annual bonuses for the period from January 1, 2020 to April 30, 2020 (with the allocation of such amounts among Continuing Employees determined in the discretion of QES’s Chief Executive Officer).
Regulatory Matters (See page 130)
KLXE and QES are not aware of any material U.S. federal, state or foreign regulatory requirements or approvals that are required for the execution of the Merger Agreement or the completion of the merger, other than the filing of a Certificate of Merger with respect to the merger with, and the acceptance of such Certificate of Merger by, the Secretary of State of the State of Delaware.
No Appraisal Rights (See page 131)
Under the DGCL, KLXE stockholders and QES stockholders are not entitled to appraisal rights or dissenters’ rights in connection with the merger or the reverse stock split.
Risk Factors (See page 26)
In evaluating the Merger Agreement, the merger and the issuance of shares of KLXE 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.”
 
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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF KLXE
The following table presents selected historical financial data for the periods indicated below. KLXE derived the selected historical statements of earnings data for the years ended January 31, 2020, 2019 and 2018 and the balance sheet data as of January 31, 2020 and 2019 from its audited consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended January 31, 2020 which is attached as Annex I. KLXE derived the selected historical financial data as of January 31, 2018, and 2017 and for the fiscal years ended January 31, 2017 and 2016 from its audited financial statements not included elsewhere in this joint proxy statement/prospectus. KLXE derived the selected historical financial data as of January 31, 2016 from the accounting records of KLX Inc. (“KLX”).
The historical statements of (loss) earnings for periods prior to September 14, 2018 reflect allocations of general corporate expenses from KLX, including, but not limited to, executive management, finance, legal, information technology, human resources, employee benefits administration, treasury, risk management and other shared services. The allocations were made on a direct usage basis when identifiable, with the remainder allocated on the basis of revenues generated, costs incurred, headcount or other measures. KLXE’s management considers these allocations to be a reasonable reflection of the utilization of services by, or the benefits provided to, KLXE. The allocations may not, however, reflect the expense KLXE would have incurred as a stand-alone public company for the periods presented. Actual costs that may have been incurred if KLXE had been a stand-alone company would depend on a number of factors, including the chosen organizational structure, what functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure.
The financial statements for periods prior to the spin-off from KLX on September 14, 2018 included in this joint proxy statement/prospectus may not necessarily reflect KLXE’s financial position, results of operations and cash flows as if KLXE had operated as a stand-alone public company during all periods presented. Accordingly, KLXE’s historical results should not be relied upon as an indicator of its future performance.
In presenting the financial data in conformity with GAAP, KLXE is required to make estimates and assumptions that affect the amounts reported. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies,” included in its Annual Report on Form 10-K for the fiscal year ended January 31, 2020 which is attached as Annex I for a detailed discussion of the accounting policies that KLXE believes require subjective and complex judgments that could potentially affect reported results.
The selected historical financial data set forth below is not necessarily indicative of future results of KLXE 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 of KLXE for the fiscal year ended January 31, 2020, included in its Annual Report on Form 10-K for the fiscal year ended January 31, 2020 which is attached as Annex I.
 
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Dollar amounts are shown in millions, except for per share data or as otherwise specified.
Year Ended
January  31,
2020
January 31,
2019
January 31,
2018
January 31,
2017
January 31,
2016
Statements of Earnings Data:
Service revenues
$ 544.0 $ 495.3 $ 320.5 $ 152.2 $ 251.2
Cost of sales(1)
470.0 370.4 269.1 181.3 282.8
Selling, general and administrative(1)
100.0 100.4 73.4 60.1 78.5
Research and development costs
2.7 2.4 2.0 0.3
Goodwill impairment charge(2)(3)
47.0 310.4
Long-lived asset impairment charge(3)
329.8
Operating (loss) earnings
(75.7) 22.1 (24.0) (89.5) (750.3)
Interest expense, net
29.2 7.1
(Loss) earnings before income taxes
(104.9) 15.0 (24.0) (89.5) (750.3)
Income tax (benefit) expense
(8.5) 0.6 0.1 0.1 0.1
Net (loss) earnings
$ (96.4) $ 14.4 $ (24.1) $ (89.6) $ (750.4)
Basic net (loss) earnings per share(4):
Net (loss) earnings
$ (4.32) $ 0.72 $ (1.20) $ (4.46) $ (37.33)
Weighted average common shares
22.3 20.1 20.1 20.1 20.1
Diluted net (loss) earnings per share(4):
Balance Sheet Data (end of period):
Working capital
$ 163.7 $ 223.1 $ 38.1 $ 14.8 $ 9.0
Goodwill, intangible and other assets, net
88.1 92.6 8.2 3.6 6.1
Total assets
623.4 672.8 273.8 205.0 234.8
Long-term debt
243.0 242.2
Stockholders’ equity
312.2 340.7 224.6 178.0 192.1
Other Data:
Depreciation and amortization
64.1 41.5 33.5 36.2 46.6
(1)
For the year ended January 31, 2020, cost of sales and selling, general and administrative (“SG&A”) expense include $7.2 and $17.3, respectively, of costs primarily associated with cost rationalization and other costs, asset impairment costs and new product service line introduction costs as KLXE rolled out large diameter coil tubing and flowback and testing services to additional geographic regions (collectively, “Costs as Defined”). For the year ended January 31, 2019, cost of sales and SG&A expense include $0.4 and $30.2, respectively, of costs primarily associated with the completion of the merger of the Aerospace Solutions business of KLX with The Boeing Company, the spin-off of the company from KLXE’s former parent, KLX, including $10.7 of non-cash compensation expense related to the acceleration of unvested shares held by KLXE’s employees, the amendment of the KLXE ABL Facility due to the issuance of $250.0 of notes and the acquisition of Motley (collectively, “Fiscal 2018 Costs as Defined”). For the year ended January 31, 2018, cost of sales and SG&A expense include $0.3 and $3.3, respectively, of costs primarily associated with KLX’s strategic alternatives review and also a restructuring of the Eagle Ford region. For the year ended January 31, 2016, cost of sales and SG&A expense include $23.1 and $15.4, respectively, primarily associated with business separation and start-up costs such as costs related to the spin-off of KLX from its former parent, expansion initiatives, branding and IT implementation costs.
(2)
During the fiscal year ended January 31, 2020, KLXE recorded a $47.0 goodwill impairment charge. The abrupt deterioration in industry conditions, which began in KLXE’s third quarter and accelerated through the end of its fourth quarter of the fiscal year ended January 31, 2020, was driven by a sharp
 
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decline in U.S. land rig count and an unprecedented decline in operating frac spreads from the second quarter through the end of 2019. The decline in E&P activity resulted in lower demand levels and lower current and expected revenues for KLXE’s business, which led KLXE to perform an interim goodwill impairment test in the third quarter. As a result, KLXE reported a non-cash asset impairment charge of $47.0 in its 2019 fiscal year.
(3)
During the fiscal year ended January 31, 2016, KLXE recorded a $640.2 goodwill and long-lived asset impairment charge. The rapid downturn in the oil and gas industry, including the nearly 75% decrease in the number of onshore drilling rigs and the resulting significant cutback in capital expenditures by KLXE’s customers, resulted in a significant adverse change in the business climate, which indicated that KLXE’s goodwill was impaired and its long-lived assets might not be recoverable. As a result, during the third quarter ended October 31, 2015, KLXE performed an interim goodwill impairment test and a long-lived asset recoverability test and determined that its goodwill was fully impaired and recorded a pre-tax impairment charge of $310.4. Further, KLXE utilized a combination of cost and market approaches to determine the fair value of its long-lived assets, resulting in an impairment charge of $177.8 related to identified intangibles and $152.0 related to property and equipment.
(4)
On September 14, 2018, KLX distributed to its stockholders of record as of the close of business on September 3, 2018, 0.4 shares of KLXE Common Stock for every 1.0 share of KLX Common Stock held as of the record date. January 31, 2018, 2017 and 2016 basic and diluted net loss per common share and the average number of common shares outstanding were calculated using the number of shares of KLXE Common Stock outstanding immediately following the distribution. See Note 10 to KLXE’s audited consolidated financial statements for the fiscal year ended January 31, 2020 included elsewhere in this joint proxy statement/prospectus.
 
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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF QES
The following table presents selected historical financial data for the periods indicated below. QES derived the selected historical statements of operations data for the years ended December  31, 2019, 2018 and 2017 and the balance sheet data as of December  31, 2019 and 2018 from its audited consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which is attached as Annex O and incorporated herein. QES derived the selected historical statements of operations data for the three months ended March 31, 2020 and 2019 and the balance sheet data as of March 31, 2020 from QES’s unaudited interim consolidated financial statements contained in QES’s Quarterly Report on Form 10-Q for the three months ended March 31, 2020, which is attached as Annex U and incorporated herein. QES derived the balance sheet data as of December 31, 2017 from its audited financial statements not included elsewhere in this joint proxy statement/prospectus. QES derived the balance sheet data as of March 31, 2019 from its unaudited interim consolidated financial statements not included elsewhere in this joint proxy statement/prospectus.
In presenting the financial data in conformity with GAAP, QES is required to make estimates and assumptions that affect the amounts reported. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies,” included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2019 which is attached as Annex O, and in its Quarterly Report on Form 10-Q for the three months ended March 31, 2020 which is attached as Annex U, for a detailed discussion of the accounting policies that QES believes require subjective and complex judgments that could potentially affect reported results.
The selected historical financial data set forth below is not necessarily indicative of future results of QES 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 of QES for the fiscal year ended December 31, 2019, included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2019 which is attached as Annex O, and in its Quarterly Report on Form 10-Q for the three months ended March 31, 2020 which is attached as Annex U.
(in millions of U.S. dollars, except per share and share amounts)
Three Months Ended
Year Ended
March 31,
2020
March  31,
2019
December 31,
2019
December 31,
2018
December 31,
2017
Statement of Operations Data
Revenues:
$ 92.8 $ 141.7 $ 484.3 $ 604.4 $ 438.0
Costs and expenses:
Direct operating costs
81.5 121.6 411.7 503.0 361.5
General and administrative
12.1 15.7 55.1 62.8 44.0
Depreciation and amortization
9.9 12.4 49.5 46.7 45.7
Gain on disposition of assets
(.03) (.02) (1.9) (2.4) (2.6)
Impairment and other charges
9.3 41.6
Operating loss
(19.9) (8.0) (71.7) (5.7) (10.5)
Non-operating loss expense:
Interest expense
(0.73) (.67) (3.2) (11.8) (11.3)
Other (expense) income
(0.04) 0.7
Loss before income tax
(20.6) (8.7) (75.0) (17.6) (21.1)
Income tax expense
(.08) (.18) (0.4) (0.6) (0.1)
Net loss
$ (20.7) $ (8.9) $ (75.4) $ (18.1) $ (21.2)
 
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Balance Sheet Data
March 31,
2020
March 31,
2019
December  31,
2019
December 31,
2018
December 31,
2017
Cash and cash equivalents
$ 23.2 $ 20.9 $ 14.7 $ 13.8 $ 8.8
Total current assets
118.3 156.5 118.0 160.1 133.9
Total assets
228.4 345.7 240.5 324.6 275.7
Total liabilities
115.5 151.4 108.3 122.7 190.7
Total shareholders’ equity
112.9 194.3 132.3 201.8 85.0
 
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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following selected unaudited pro forma condensed combined balance sheet data as of January 31, 2020 gives effect to the merger as if it had occurred on January 31, 2020, and the following selected unaudited pro forma condensed combined statement of loss data for the year ended January 31, 2020 is presented as if the merger had occurred on February 1, 2019. The unaudited pro forma condensed combined financial statements from which the selected data is derived 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 from which the following selected data is derived do not purport to project the future financial position or operating results of KLXE. 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 data should be read in conjunction with the section titled “Unaudited Pro Forma Condensed Combined Financial Statements” and the related notes.
The selected unaudited pro forma condensed combined financial statements from which the following selected data is derived are based on and have been derived from KLXE’s and QES’s historical financial statements, including KLXE’s audited consolidated statement of earnings (loss) for its fiscal year ended January 31, 2020 and audited consolidated balance sheet as of January 31, 2020 and QES’s audited consolidated statement of operations for the fiscal year ended December 31, 2019 and unaudited consolidated balance sheet as of March 31, 2020.
KLXE’s fiscal year ends on January 31 of each year and QES’s fiscal year ends on December 31 of each year. The unaudited pro forma condensed combined statement of loss is presented on the basis of KLXE’s fiscal year and combines the historical results of the fiscal periods of KLXE and QES. Since QES’s fiscal year end differs by less than 93 days from KLXE’s year end, pursuant to Rule  11-02(c)(3) of Regulation S-X, KLXE combines its statement of loss and that of QES’s using their respective fiscal years. The unaudited pro forma condensed combined balance sheet combines the KLXE audited balance sheet as of January 31, 2020 and the QES unaudited balance sheet as of March 31, 2020.
(in millions, except per share amounts)
Year Ended
January 31,
2020
Pro Forma Condensed Combined Statement of Loss Data:
Service revenues
$ 1,028.3
Net loss
$ (168.0)
Net loss per share, basic
$ (42.00)
Net loss per share, diluted
$ (42.00)
(in millions)
As of
January 31,
2020
Pro Forma Condensed Combined Balance Sheet Data:
Cash and cash equivalents
$ 114.7
Total assets
$ 809.1
Total liabilities
$ 392.7
Total stockholders’ equity
$ 416.4
 
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COMPARATIVE HISTORICAL AND UNAUDITED PER SHARE INFORMATION
The following table presents historical per share data of KLXE for the year ended January 31, 2020, historical per share data for QES for the year ended December 31, 2019, and pro forma per share data for the year ended January 31, 2020. The pro forma per share data for the year ended January 31, 2020 is presented as if the merger had been completed on February 1, 2019. The pro  forma information provided in the table below is unaudited.
Historical per share data of KLXE for the year ended January 31, 2020 was derived from KLXE’s historical financial statements. Historical per share data of QES for the year ended December 31, 2019 was derived from QES’s historical financial statements.
Unaudited pro forma combined per share data for the year ended January 31, 2020 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 table below should be read together with the historical consolidated financial statements and related notes of KLXE and QES, included elsewhere in this joint proxy statement/prospectus, and with the unaudited pro forma condensed combined financial statements included in “Unaudited Pro Forma Condensed Combined Financial Statements.”
KLXE’s fiscal year ends on January 31 of each year while QES’s fiscal year ends on December 31 of each year. Since QES’s fiscal year end differs by less than 93 days from KLXE’s year end, pursuant to Rule 11-02(c)(3) of Regulation S-X, KLXE combines its statement of loss and that of QES’s using their respective fiscal years. Accordingly, the unaudited pro forma condensed combined financial statements are presented on the basis of KLXE’s fiscal year and combine the historical results of the fiscal years of KLXE and QES.
Year Ended January 31, 2020
KLXE
Historical(1)
QES
Historical(2)
Pro Forma
Combined
Pro Forma
Equivalent(3)
(unaudited)
(unaudited)
Net Loss Per Share
Basic
$ (4.32) $ (2.24) $ (42.00) $ (20.35)
Diluted
$ (4.32) $ (2.24) $ (42.00) $ (20.35)
Book Value Per Share
$ 14.0 $ 3.4 $ 96.8 $ 46.9
Cash Dividends Per Share
$ $ $ $
(1)
Historical information for KLXE presented for the fiscal year ended January 31, 2020.
(2)
Historical information for QES presented for the fiscal year ended December 31, 2019.
(3)
Calculated by multiplying the pro forma condensed combined data by the exchange ratio of 0.4844.
 
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MARKET PRICE INFORMATION
The KLXE Common Stock is traded on Nasdaq under the symbol “KLXE” and the QES Common Stock is traded on the NYSE under the symbol “QES.”
The high and low trading prices for the KLXE Common Stock as of May 1, 2020, the last trading day immediately before the public announcement of the merger, were $1.36 and $1.00, respectively. The high and low trading prices for the QES Common Stock as of May 1, 2020, the last trading day immediately before the public announcement of the merger, were $1.03 and $0.96, respectively.
As of                 , 2020, the last date before the date of this joint proxy statement/prospectus for which it was practicable to obtain this information, there were                 shares of KLXE Common Stock outstanding and approximately                 holders of record of KLXE Common Stock, and                 shares of QES Common Stock outstanding and approximately                 holders of record of QES Common Stock.
The following table sets forth the closing sale price per share of KLXE Common Stock as reported on Nasdaq and QES Common Stock as reported on the NYSE as of May 1, 2020, the last trading day prior to the public announcement of the merger, and on                 , 2020, 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 QES Common Stock as of the same two dates. The implied value was calculated by multiplying the closing price of a share of KLXE Common Stock on the relevant date by the Exchange Ratio of 0.4844 shares of KLXE Common Stock for each share of QES Common Stock.
KLXE
Common Stock
Closing Price
QES
Common Stock
Closing Price
Exchange
Ratio
Estimated KLXE
Equivalent Per
Share Value
May 1, 2020
$ 1.08 $ 0.985 0.4844 $ 0.52
           , 2020
$ $ 0.4844 $
The market prices of KLXE Common Stock and QES 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 KLXE Common Stock or QES Common Stock before completion of the merger or of KLXE 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 KLXE Common Stock or QES Common Stock, the market price of KLXE Common Stock (and, therefore, the value of the merger consideration) when received by QES 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 KLXE Common Stock and QES Common Stock and to review carefully the other information contained in 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 KLXE’s or QES’s stock price, the value of the merger consideration is uncertain.”
For more information on the market for KLXE’s or QES’s common equity, related stockholder matters and issuer purchases of equity securities, see Part II, Item 5 “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” of KLXE’s Annual Report on Form 10-K for the fiscal year ended January 31, 2020, and of QES’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which are attached as Annex I and O, respectively, to this joint proxy statement/prospectus and incorporated herein.
 
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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 KLXE’s or QES’s stock price, the value of the merger consideration is uncertain.
Upon completion of the merger, each share of QES Common Stock outstanding immediately prior to the merger, other than QES Excluded Shares, will be converted into and become exchangeable for 0.4844 shares of KLXE Common Stock. The Exchange Ratio is fixed in the Merger Agreement and will not be adjusted for changes in the market price of either KLXE Common Stock or QES Common Stock. The market prices of KLXE Common Stock and QES 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 KLXE Annual Meeting and the QES Special Meeting, respectively, and the date the merger is consummated, and the market price of KLXE Common Stock will continue to fluctuate thereafter.
KLXE stockholders will not know, or be able to determine, at the time of the KLXE Annual Meeting the market value of the shares of KLXE Common Stock to be issued as merger consideration to QES stockholders pursuant to the Merger Agreement compared to the market value of the shares of QES Common Stock that are being exchanged in the merger. Similarly, because the value of the merger consideration will depend on the market price of KLXE Common Stock at the time the merger is completed, QES stockholders will not know, or be able to determine, at the time of the QES Special Meeting the market value of the merger consideration they would receive upon completion of the merger.
Stock price changes may result from a variety of factors, including, among others, general market and economic conditions, changes in KLXE’s and QES’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, federal, state and local legislation, governmental regulation and legal developments in the industry segments in which KLXE or QES operate, the effects of the coronavirus pandemic (COVID-19) and governmental and business responses to the pandemic, the timing of the merger and other factors generally affecting the respective prices of KLXE Common Stock or QES Common Stock.
Many of these factors are beyond KLXE’s and QES’s control, and neither KLXE nor QES 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 KLXE Common Stock and QES Common Stock in determining whether to vote for the KLXE Share Issuance Proposal or the QES Merger Proposal, as applicable. In addition, see “Comparative Historical and Unaudited Per Share Information” and “Market Price Information.”
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 or waived (to the extent permissible), including the approval of the KLXE Share Issuance Proposal and the QES Merger Proposal, 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 KLXE and QES, 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 KLXE or QES may terminate the Merger Agreement under certain circumstances, including, among other reasons, if the merger is not completed by November 3, 2020. KLXE will be required to pay to QES a termination fee of $3,000,000 if the Merger Agreement is terminated: (i) by QES pursuant to a KLXE Change of Recommendation resulting from either receipt by KLXE of a Superior Offer or from an intervening material event (other than as a result of a bankruptcy event involving QES); or (ii) by KLXE in order to enter into a definitive agreement with respect to a Superior Offer. QES will be required to pay to KLXE a termination fee of $3,000,000 if the Merger Agreement is terminated: (i) by KLXE pursuant to a QES Change of Recommendation resulting from either receipt by QES of a Superior Offer or from an
 
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intervening material event (other than as a result of a bankruptcy event involving KLXE); or (ii) by QES in order to enter into a definitive agreement with respect to a Superior Offer. If the Merger Agreement is terminated under certain specified circumstances, QES or KLXE, as applicable, may also be required to pay to the other party an expense reimbursement of up to $1,500,000. For more information, see “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 KLXE and/or QES.
If the merger is not completed for any reason, including as a result of a failure to obtain the KLXE Required Vote or the QES Required Vote, the ongoing businesses of KLXE and QES may be adversely affected and, without realizing any of the benefits of having completed the merger, KLXE and QES may experience certain negative effects, 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 its 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 other company (not to be unreasonably withheld, conditioned or delayed), may prevent KLXE or QES from taking certain other specified actions during the pendency of the merger, including, for example:

authorize or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock (whether in cash, assets, stock, or other securities), other than dividends and distributions by a direct or indirect wholly owned subsidiary;

adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization or enter into a letter of intent or agreement in principle with respect thereto in respect of such party or any of its subsidiaries;

make any acquisition of any other person or business or make any loans, advances or capital contributions to, or investments in, any other person, except as contemplated by such party’s disclosure schedules or in connection with any transaction solely between such party and its wholly owned subsidiaries or among its wholly owned subsidiaries;

authorize or make any capital expenditures, other than maintenance expenditures as required to operate in the ordinary course of business which do not in the aggregate exceed $1 million (net of recovery of lost-in-hole expenses from customers) in each of the second, third and fourth quarters of 2020;

incur, assume, guarantee or otherwise become liable for any indebtedness (directly, contingently or otherwise) except (i)  accounts payable in the ordinary course of business or (ii)  indebtedness among such party and its wholly owned subsidiaries or among its wholly owned subsidiaries; provided that such indebtedness incurred in each of clauses (i)-(ii) does not impose any additional restrictions on such party or its subsidiaries;

enter into or renew any material contract or contract with a top customer or top supplier, other than, following reasonably prompt notice to the other party, any such contract that is both entered into or renewed in the ordinary course of business consistent with past practice and on commercially reasonable terms given then-current market conditions and not otherwise prohibited by the covenants. For a full description of the restrictive covenants applicable to KLXE and QES, see “The Merger Agreement — Covenants — Conduct of Business Prior to the Effective Time;” and
 
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matters relating to the merger (including integration planning) will require substantial commitments of time and resources by KLXE management and QES management, which could otherwise have been devoted to day-to-day operations or to other opportunities that may have been beneficial to KLXE or QES, as applicable, as an independent company.
The market price for shares of KLXE 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 KLXE Common Stock and QES Common Stock.
Upon consummation of the merger, KLXE stockholders and QES stockholders will both hold shares of KLXE Common Stock. KLXE’s businesses differ in some regards from those of QES, and QES’s businesses differ in some regards from those of KLXE, and, accordingly, the results of operations of KLXE following completion of the merger will be affected by some factors that are different from those currently or historically affecting the results of operations of KLXE and those currently or historically affecting the results of operations of QES. The results of operations of KLXE following completion of the merger may also be affected by factors different from those that currently affect or have historically affected either KLXE or QES. In addition, following completion of the merger, KLXE may seek to raise additional equity financing through one or more underwritten offerings, private placements and/or rights offerings, or issue stock in connection with acquisitions, which may result in downward pressure on the share price of KLXE Common Stock. For a discussion of the businesses of each of KLXE and QES 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.
The shares of KLXE Common Stock to be received by QES stockholders as a result of the merger will have rights different from the shares of QES Common Stock.
Upon consummation of the merger, the rights of QES stockholders, who will become stockholders of KLXE, will be governed by the KLXE Charter and the KLXE Bylaws. The rights associated with QES Common Stock are different from the rights associated with KLXE Common Stock. See “Comparison of Stockholders’ Rights” for a discussion of these rights.
KLXE stockholders and QES stockholders will each have reduced ownership and voting interest in and will exercise less influence over management of KLXE following completion of the merger.
KLXE stockholders currently have the right to vote in the election of the KLXE Board and on other matters affecting KLXE, and QES stockholders currently have the right to vote in the election of the QES Board and on other matters affecting QES. Upon consummation of the merger, each KLXE stockholder and each QES stockholder will become a stockholder of KLXE with a percentage ownership of KLXE that is smaller than such stockholder’s percentage ownership of KLXE or QES, 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 KLXE Common Stock (including outstanding KLXE restricted stock awards), and the shares outstanding of QES Common Stock (plus the shares underlying outstanding QES phantom units and outstanding QES restricted stock units (but excluding cash settled Converted PSUs)), KLXE and QES estimate that holders of shares of KLXE Common Stock (including KLXE restricted stock) as of immediately prior to the completion of the merger will hold, in the aggregate, approximately 59% of the issued and outstanding shares of KLXE Common Stock (based on fully diluted shares outstanding of KLXE) immediately following the completion of the merger, and holders of shares of QES Common Stock, QES phantom units and QES restricted stock units as of immediately prior to the completion of the merger will hold, in the aggregate, approximately 41% of the issued and outstanding shares of KLXE Common Stock (based on fully diluted shares outstanding of KLXE) immediately following the completion of the merger. Because of this, each share of KLXE Common Stock and each share of QES Common Stock will represent a smaller percentage ownership of KLXE than it represented in KLXE and QES, respectively. In addition, the nine members of the KLXE Board as of the Effective Time will include the five KLXE Designees, including John T. Collins, who will serve as the non-executive chairman of the KLXE Board, and the four QES Designees. Accordingly, each KLXE stockholder and each QES stockholder will have less influence on the management and policies of KLXE than such stockholder now has on the management and policies of KLXE or QES, as applicable.
 
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