UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

  Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): February 12, 2019

 

Sentinel Energy Services Inc.

(Exact name of registrant as specified in its charter)

 

Delaware   001- 38271   98-1370747
(State or other jurisdiction
of incorporation)
  (Commission
File Number)
  (IRS Employer
Identification No.)

 

700 Louisiana Street, Suite 2700

Houston, Texas 77002

(Address of principal executive offices, including zip code)

 

Registrant’s telephone number, including area code: (281) 407-0686

 

Not Applicable
(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

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 13(a) of the Exchange Act. ☐

  

 

 

 

 

Item 1.01    Entry into a Material Definitive Agreement.

 

The information set forth in Item 1.02 of this Current Report on Form 8-K is incorporated herein by reference.

 

Item 1.02 Termination of a Material Definitive Agreement.

 

As previously disclosed, on October 18, 2018, Sentinel Energy Services Inc. (the “Company”) entered into a transaction agreement and plan of merger (the “Transaction Agreement”) with Strike Capital, LLC (“Strike”), OEP Secondary Fund (Strike), LLC, One Equity Partners Secondary Fund, L.P., the other equityholders of Strike party thereto, OEP-Strike Seller Representative, LLC and SES Blocker Merger Sub, LLC, relating to the proposed acquisition by the Company of a majority of the equity interests of Strike. On February 12, 2019, the Company and Strike entered into a Termination Agreement (the “Termination Agreement”), pursuant to which the parties agreed to mutually terminate the Transaction Agreement. The termination of the Transaction Agreement is effective as of February 12, 2019.

As a result of the termination of the Transaction Agreement, each of (i) the purchase and contribution agreement, dated as of October 18, 2018, by and among the Company, Strike, LLC, a wholly owned subsidiary of Strike, CSL Energy Holdings III Corp, LLC and Invacor Pipeline and Process Solutions, LLC, (ii) the subscription agreements, dated as of October 18, 2018, between the Company and each of CSL Capital Management, L.P. and certain funds and accounts managed by Fidelity Management & Research Company, and (iii) the Voting and Support Agreement, dated as of October 18, 2018, by and among the Company, Sentinel Management Holdings LLC and certain shareholders of the Company party thereto, was automatically terminated in accordance with its terms.

The foregoing descriptions of the Transaction Agreement and Termination Agreement are not complete and are qualified in their entirety by the terms and conditions of the full text of the Transaction Agreement, which was previously filed as Exhibit 2.1 to the Current Report on Form 8-K with the U.S. Securities and Exchange Commission (the “SEC”) by the Company on October 19, 2018, and the full text of the Termination Agreement, which is attached hereto as Exhibit 2.1, each of which is incorporated by reference herein.

 

Item 8.01 Other Events.

 

On February 13, 2019, the Company issued a press release announcing the termination of the Transaction Agreement. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

 

As a result of the termination of the Transaction Agreement, the special meeting of the Company’s stockholders, which was to be held on February 5, 2019 for the purpose of voting on the Transaction Agreement and proposed transactions related thereto, will not take place.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Number   Description
2.1   Termination Agreement, dated as of February 12, 2019, by and between the Company and Strike Capital, LLC.
99.1   Press Release dated February 13, 2019.

  

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  SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

  

  SENTINEL ENERGY SERVICES INC.
   
Dated: February 13, 2019 By: /s/ Krishna Shivram
    Name: Krishna Shivram
    Title: Chief Executive Officer

  

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Exhibit 2.1

 

TERMINATION AGREEMENT

This TERMINATION AGREEMENT (this “ Termination Agreement ”), dated as of February 12, 2019, by and between Sentinel Energy Services Inc., a Delaware corporation (“ Sentinel ”) and Strike Capital, LLC, a Texas limited liability company (“ Strike ”), terminates that certain Transaction Agreement and Plan of Merger, dated as of October 18, 2018 (the “ Transaction Agreement ”), by and among Sentinel, Strike, OEP Secondary Fund (Strike), LLC, a Delaware limited liability company, One Equity Partners Secondary Fund, L.P., a Cayman Islands exempted limited partnership, all of the other equityholders of Strike signatories thereto, OEP-Strike Seller Representative, LLC, a Delaware limited liability company, and SES Blocker Merger Sub, LLC, a Delaware limited liability company. Each of Sentinel and Strike may be referred to herein individually as a “ Party ” and collectively as the “ Parties ”.

R E C I T A L S

A.        Pursuant to Section 9.1(a) of the Transaction Agreement, Sentinel and Strike have mutually agreed to terminate the Transaction Agreement.

B.        The respective boards of directors of Sentinel and Strike have approved this Termination Agreement.

A G R E E M E N T

NOW, THEREFORE, in consideration of the mutual promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Sentinel and Strike agree as follows:

1.       Definitions. Capitalized terms used and not defined in this Termination Agreement have the respective meanings assigned to them in the Transaction Agreement.

2.       Termination of Transaction Agreement and Invacor Agreement . Subject to the terms and conditions of this Termination Agreement, the Transaction Agreement is hereby terminated by mutual written consent of Sentinel and Strike pursuant to Section 9.1(a) of the Transaction Agreement as of the date first written above (the “ Termination Date ”). Except as otherwise provided in the Transaction Agreement, from and after the Termination Date, the Transaction Agreement will be of no further force or effect, and the rights and obligations of each of the parties thereunder shall terminate. Effective as of the Termination Date, and as a result of the termination of the Transaction Agreement, the Purchase and Contribution Agreement, dated as of October 18, 2018, by and among Sentinel, Invacor Pipeline and Process Solutions, LLC, CSL Energy Holding III Corp, LLC and Strike, LLC (the “ Invacor Agreement ”) is hereby terminated automatically pursuant to Section 9.1(b) of the Invacor Agreement. Except as otherwise provided in the Invacor Agreement, from and after the Termination Date, the Invacor Agreement will be of no further force or effect, and the rights and obligations of each of the parties thereunder shall terminate.

3.       Confidentiality . The Confidentiality Agreement will survive the termination of the Transaction Agreement and remain in full force and effect in accordance with its terms. The Parties acknowledge and agree that all information provided by one Party or its Affiliates or Representatives to another Party or its Affiliates or Representatives in furtherance of the negotiation and execution of the Transaction Agreement and the consummation of the transactions contemplated by the Transaction Agreement shall be deemed to be Evaluation Material (as defined in the Confidentiality Agreement). Each Party certifies to the other that it will, and will cause its respective Affiliates and Representatives to, destroy all Confidential Information of the other Party that may be in its or its Affiliates’ or Representatives’ possession within 30 days following the Termination Date. 

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4.       Limitation on Soliciting Employees . Each Party agrees that, during the period commencing on the Termination Date and ending on the date that is 24 months following the Termination Date, such Party will not, and will not permit any Representative of such Party or any of its current or future Subsidiaries to solicit for employment with such Party or any of its Subsidiaries any Specified Employee of the other Party or any of its Subsidiaries; provided , however , that this Section 4 will not prevent either Party or any of their respective Subsidiaries from: (a) causing to be placed any general advertisement or similar notice that is not targeted specifically at employees of the other Party or any of its Subsidiaries; or (b) engaging any recruiting firm or similar organization to identify or solicit persons for employment on behalf of such Party or any of its Subsidiaries, or soliciting the employment of any Specified Employee of the other Party or any of its Subsidiaries who is identified by any such recruiting firm or organization, as long as such recruiting firm or organization is not instructed to target any employees of the other Party or any of its Subsidiaries. For purposes of this Section 4 , a person shall be deemed to be a “ Specified Employee ” of a Party or any of its Subsidiaries if: (i) such person is employed by such Party or any of its Subsidiaries; (ii) such person has been involved in discussions with the other Party in connection with the negotiation and execution of the Transaction Agreement and the consummation of the transactions contemplated by the Transaction Agreement, including any discussions related to the potential post-Closing structure or operations of Strike, or such person has been introduced to the other Party during such discussions; and (iii) such person’s employment shall not have been involuntarily terminated by such Party or any of its Subsidiaries. Further, for purposes of this Section 4 , Invacor and Invacor EmployerCo, LLC shall be treated as Subsidiaries of Sentinel. To the extent either Party undergoes any business combination, the solicitation prohibitions in this Section 4 shall not apply to the employees of any successor of either Party who were not employees of such Party or any of such Party’s Subsidiaries as of the Termination Date.

5.       Mutual Release . In consideration of the covenants, agreements and undertakings of the Parties under this Termination Agreement, each Party, on behalf of itself and its Affiliates and its and their respective Representatives (collectively, “ Releasors ”) hereby releases, waives and forever discharges the other Party and its Affiliates and its and their respective Representatives (collectively, “ Releasees ”) of and from any and all claims, Actions, losses, liabilities, rights, damages, claims, and demands, of every kind and nature whatsoever, whether now known or unknown, foreseen or unforeseen, matured or unmatured, suspected or unsuspected, in law, admiralty or equity (collectively, “ Claims ”), which any of such Releasors ever had, now have, or hereafter can, shall, or may have against any of such Releasees for, upon, or by reason of any matter, cause, or thing whatsoever from the beginning of time through the Termination Date arising out of or relating to the Transaction Agreement or the transactions contemplated by the Transaction Agreement (including the Invacor Agreement), except for any Claims relating to rights and obligations preserved or created by or otherwise arising out of this Termination Agreement, Section 9.2 of the Transaction Agreement, Section 9.2 of the Invacor Agreement or the Confidentiality Agreement.

6.       Publicity . The Parties mutually agree to issue a joint press release in the form attached hereto as Schedule A regarding this Termination Agreement. Each Party will use commercially reasonable efforts to cause any publicly disseminated disclosure or statements made by such Party with respect to the transactions contemplated by the Transaction Agreement and the termination of the Transaction Agreement to be consistent with the statements made in such joint press release. Each Party shall not and each shall cause its Representatives and its or their respective Affiliates not to, at any time, disparage in any material respect the other Party or any Affiliate thereof, any of their respective businesses, any of their respective Representatives, or the reputation of any of the foregoing Persons.

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7.       Expenses . Except as otherwise set forth in the Transaction Agreement, all costs and expenses (including all fees and expenses of counsel, accountants, investment bankers, experts and consultants to a party and its Affiliates) incurred by a party or on its behalf in connection with or related to the authorization, preparation, negotiation, execution and performance of the Transaction Agreement, the Invacor Agreement or this Termination Agreement and the transactions contemplated thereby or hereby (“ Expenses ”) shall be paid by the party incurring such Expenses.

8.       Miscellaneous .

(a)       This Termination Agreement shall be effective as of the date first written above, as if executed on such date.

(b)         This Termination Agreement may be executed in separate counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument. The delivery of an executed Termination Agreement by facsimile or by other electronic delivery shall be sufficient to bind the party so delivering such Termination Agreement.

(c)         This Termination Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

[ The remainder of this page has been intentionally left blank ]
 

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IN WITNESS WHEREOF, the Parties have caused this Termination Agreement to be duly executed as of the date first written above.  

SENTINEL ENERGY SERVICES INC.
     
  By: /s/ Krishna Shivram
  Name: Krishna Shivram
  Title: Chief Executive Officer

 

  STRIKE CAPITAL, LLC
     
  By: /s/ Stephen V. Pate
  Name: Stephen V. Pate
  Title: Authorized Signatory

 

 

SIGNATURE PAGE TO TERMINATION AGREEMENT

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SCHEDULE A

FORM OF JOINT PRESS RELEASE

 

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Exhibit 99.1

 

 

 

 

Sentinel Energy Services and Strike Capital Mutually Agree to Terminate Transaction Agreement

 

HOUSTON, TEXAS – February 13, 2019- Sentinel Energy Services Inc. (Nasdaq: STNL) (“Sentinel” or the “Company”) and Strike Capital, LLC (“Strike”) today announced that both parties agreed to mutually terminate their definitive transaction agreement and plan of merger. In response to current market conditions, both sides concluded it was best not to pursue the transaction at this time.

 

About Sentinel Energy Services Inc.

 

Sentinel is a special purpose acquisition company focused on the energy services and equipment sectors and was formed for the purpose of entering into a merger, amalgamation, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. The Company is sponsored by Sentinel Management Holdings, LLC, an affiliate of CSL Capital Management, L.P. For more information about Sentinel Energy Services Inc., please visit its website at www.cslenergy.com/sentinel.

 

About Strike

 

Strike is a Texas limited liability company and was formed in 2003. Strike provides a full complement of pipeline infrastructure and integrity services, including new construction, make-ready, testing, inspection, maintenance, repairs, rehabilitation, upgrades, facility construction and reconnection. Strike operates through multiple locations across its national footprint, with corporate headquarters located in The Woodlands, Texas. Strike is controlled by a group of investment funds managed by OEP Capital Advisors, L.P.

 

 

Forward Looking Statements

 

This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements are based on current information and expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing Sentinel’s views as of any subsequent date, and Sentinel does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. You should not place undue reliance on these forward-looking statements. As a result of a number of known and unknown risks and uncertainties, actual results or performance may be materially different from those expressed or implied by these forward-looking statements.

 

Contacts

 

For Sentinel

 

Kent Jamison 

(281) 407-0686 

kent@cslenergy.com

 

For Strike

 

Frank McCawley 

(713) 389-3000 

frank.mccawley@strikeusa.com

 

For Media

 

Brian Brooks 

(281) 323-6644 

Strike.PR@strikeusa.com