Filed by Hanover Compressor Company
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Hanover Compressor Company
Commission File No. 1-13071
Subject Company: Universal Compression Holdings, Inc.
Commission File No. 1-15843
Subject Company: lliad Holdings, Inc.
Commission File No.
The following is an article published in the Houston Chronicle on February 7, 2007 containing
an interview with Stephen Snider, President and Chief Executive Officer of Universal Compression
Holdings, Inc., and John Jackson, President and Chief Executive Officer of Hanover Compressor
FIVE QUESTIONS WITH STEPHEN SNIDER AND JOHN JACKSON
Solid fit expected in merger of No. 1, No. 2
By KRISTEN HAYS
Copyright 2007 Houston Chronicle
Hanover Compressor Co. and Universal Compression Holdings, the nations first- and
second-largest providers of equipment that raises the pressure of natural gas to push it through
pipelines, this week announced plans to merge. The deal, slated to close in the third quarter,
calls for a stock swap that will create a new company with a market capitalization of $3.8 billion.
Analysts largely approved, noting the combined company can save money by closing overlapping
facilities and reducing overhead.
Universal, with about 3,000 employees, focuses on domestic natural gas contract compression
services and holds a majority stake in a master limited partnership created last year to buy
Hanover, with about 7,000 employees, has a broader domestic and international focus, providing
natural gas compression services and equipment for oil and natural gas processing.
Universal CEO Stephen Snider will be CEO of the combined company, while Hanover CEO John Jackson
will be a director. Both discussed the deal with reporter Kristen Hays before boarding a plane to
spend the week meeting with employees in the Houston-based companies offices across the country.
Q: Why are you doing this?
A: Snider: Weve grown to be about the same size, but our footprint is a bit different. We grew in
different directions, so we thought if we put this together, we can be a formidable company.
Q: You say the combination will save $50 million by next year. Where will those savings come from,
and will it include eliminating some positions?
A: Jackson: Some of it will come from eliminating positions. Were both frankly short on employees,
so well eliminate positions, but the number of positions we eliminate will be lower than the
number of people. We think attrition will take care of a lot of that for us. The savings will come
not just through people, but by (consolidating) offices, reduced audit fees, filing fees, tax fees
and a lot of things that are not necessarily just people-driven.
Q: Because both companies are the biggest U.S. suppliers of equipment used to make natural gas flow
through pipelines, is there any concern that antitrust issues may be a potential roadblock?
A: Snider: No, theres not a lot of concern. About two-thirds of compressors are owned by our
customers and operated by them.
So while were about 70 percent of the contract compression business, its really only about 30
percent of the entire overall market, so we dont think itll be an issue.
Q: Why do you say this combination will put you in a better position to compete globally?
A: Jackson: Well have savings, so we have additional cash to deploy.
Both our balance sheets will improve over time as assets are sold into the (master limited
partnership that Universal created last year), freeing up capital to deploy internationally.
Second, internationally, if you double the size of the company, we can double the size of projects.
So we think it puts us in a better position from a free cash-flow perspective and a risk
perspective to grow internationally more aggressively.
Q: What will the name of the new company be?
A: Snider: If I knew that, I wouldnt have to spend the next three months in agony trying to figure
Jackson: We dont know. The reason for the name change is to take both of the old cultures out of
the equation and get all the new employees in a new mind-set.
All statements in this document other than historical facts are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking
statements rely on a number of assumptions concerning future events and are subject to a number of
uncertainties and factors, many of which are outside Hanovers and Universals control, which could
cause actual results to differ materially from such statements. Forward looking information
includes, but is not limited to, statements regarding the result of the review of the proposed
merger by various regulatory agencies and statements regarding the new combined company, including
Hanovers and Universals expected combined financial and operating results; the expected amount
and timing of cost savings and operating synergies; the strategies by which those cost savings and
operating synergies will be achieved; and whether and when the transactions contemplated by the
merger agreement will be consummated. Among the factors that could cause results to differ
materially from those indicated by such forward-looking statements are the failure to realize
anticipated synergies; the result of the review of the proposed merger by various regulatory
agencies and any conditions imposed on the new company in connection with consummation of the
merger; failure to receive the approval of the merger by the stockholders of Hanover and Universal
and satisfaction of various other conditions to the closing of the merger contemplated by the
merger agreement. These forward-looking statements are also affected by the risk factors,
forward-looking statements and challenges and uncertainties described in Hanovers Annual Report on
Form 10-K for the twelve months ended December 31, 2005 and Universals Transition Report on Form
10-K for the nine months ended December 31, 2005, and those set forth from time to time in
Hanovers and Universals filings with the Securities and Exchange Commission, which are available
through Hanovers and Universals websites at www.hanover-co.com and
www.universalcompression.com. Hanover and Universal expressly disclaim any intention or
obligation to revise or update any forward-looking statements whether as a result of new
information, future events, or otherwise.
Additional Information and Where to Find It
In connection with the proposed Mergers, a registration statement of the new holding company,
Iliad, which will include proxy statements of Universal and Hanover, and other materials, will be
filed with the Securities and Exchange Commission. INVESTORS AND SECURITY HOLDERS ARE URGED TO
CAREFULLY READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS AND THESE OTHER
MATERIALS REGARDING THE PROPOSED TRANSACTION WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT UNIVERSAL, HANOVER, ILIAD HOLDINGS AND THE PROPOSED TRANSACTION.
Investors and security holders may obtain a free copy of the registration statement and the proxy
statement/prospectus when they are available and other documents containing information about
Universal and Hanover, without charge, at the SECs web site at www.sec.gov, Universals web site
at www.universalcompression.com, and Hanovers web site at www.hanover-co.com. Copies of the
registration statement and the proxy statement/prospectus and the SEC filings that will be
incorporated by reference therein may also be obtained for free by directing a request to either
Investor Relations, Universal Compression Holdings, Inc., 713-335-7000 or to Investor Relations,
Hanover Compressor Company, 832-554-4856.
Participants in the Solicitation
Hanover and Universal and their respective directors, officers and certain other members of
management may be deemed to be participants in the solicitation of proxies from their respective
stockholders in respect of the merger. Information about these persons can be found in Hanovers
and Universals respective proxy statements relating to their 2006 annual meetings of stockholders
as filed with the SEC on March 24, 2006 and March 15, 2006, respectively. Additional information
about the interests of such persons in the solicitation of proxies in respect of the merger will be
included in the registration statement and the proxy statement/prospectus to be filed with the SEC
in connection with the proposed transaction.