Newpark Resources Announces Agreement To Purchase Drilling Fluids Business
THE WOODLANDS, Texas, Dec. 29, 2012
THE WOODLANDS, Texas, Dec. 29, 2012 /PRNewswire/ --Newpark Resources, Inc.
(NYSE: NR) today announced that it has entered into a definitive agreement to
acquire substantially all assets and operations of Alliance Drilling Fluids,
LLC ("Alliance"), a provider of drilling fluids, proppants, and related
services headquartered in Midland, Texas. Under the terms of the agreement,
cash consideration at closing is expected to be approximately $53 million,
subject to typical adjustments for actual working capital conveyed.
Additional consideration up to $4.3 million may be payable based on the
profitability of the proppant business over the two year period following the
acquisition. Alliance recorded revenues of $89 million and operating income
of $14 million for the year ended December 31, 2011, of which approximately
50% of revenue and 40% of operating income was attributable to the proppant
business. The transaction will be funded through borrowings on Newpark's
revolving credit facility and is expected to close on December 31, 2012.
Paul Howes, President and Chief Executive Officer of Newpark, stated, "We are
pleased to announce this acquisition, which is consistent with our strategy to
grow our Drilling Fluids business. With their core business in the Permian
Basin and Eagle Ford Shale markets, the acquisition of Alliance significantly
increases our market share in these important regions. Alliance, like
Newpark, is focused on water-based technologies and a commitment to provide
operators with best-in-class drilling fluids and engineering services.
"We expect the Alliance acquisition to be accretive to Newpark's earnings in
2013," concluded Howes.
Newpark Resources, Inc. is a worldwide provider of drilling fluids, temporary
worksites and access roads for oilfield and other commercial markets, and
environmental waste treatmentsolutions. For more information, visit our
website at www.newpark.com.
This news release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act that are based on management's
current expectations, estimates and projections. All statements that address
expectations or projections about the future, including Newpark's strategy for
growth, product development, market position, expected expenditures and
financial results are forward-looking statements. Some of the forward-looking
statements may be identified by words like "expects," "anticipates," "plans,"
"intends," "projects," "indicates," and similar expressions. These statements
are not guarantees of future performance and involve a number of risks,
uncertainties and assumptions. Many factors, including those discussed more
fully elsewhere in this release and in documents filed with the Securities and
Exchange Commission by Newpark, particularly its Annual Report on Form 10-K
for the year ended December 31, 2011, as well as others, could cause results
to differ materially from those stated. These risk factors include, but are
not limited to, the availability of raw materials and skilled personnel, the
impact of restrictions on offshore drilling activity in the Gulf of Mexico,
our customer concentration and cyclical nature of our industry, our market
competition, the cost and continued availability of borrowed funds, our
international operations, legal and regulatory matters, including
environmental regulations, inherent limitations in insurance coverage,
potential impairments of long-lived intangible assets, technological
developments in our industry, the impact of severe weather, particularly in
the U.S. Gulf Coast, and our ability to execute our business strategy and make
successful capital investments and business acquisitions. Newpark's filings
with the Securities and Exchange Commission can be obtained at no charge at
www.sec.gov, as well as through our website at www.newpark.com.
Contacts: Gregg Piontek, VP & CFO
Newpark Resources, Inc.
Ken Dennard, Managing Partner
Karen Roan, SVP
SOURCE Newpark Resources, Inc.
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