Newpark Resources Announces Sale of Fluids Systems Segment
Under the terms of the Sale Transaction agreement, the base sale price of the business is
Having concluded the Sale Transaction, the Fluids Systems segment will be reclassified and reported as Discontinued Operations for all periods reported.
In conjunction with the Sale Transaction, the Company’s
MANAGEMENT COMMENTARY
“Over the last two years and through this Sale Transaction, we have engaged in a systematic process to transform our fluids business into a more profitable and capital-light operation, driving efficiencies and generating more than
“The sale simplifies our business model and meaningfully improves our margin profile, return on investment and profitability potential, while enabling us to commit
Deviyani Misra-Godwin, Director at SCF, stated, “For over 25 years, Newpark Fluids Systems has maintained a leading position in the drilling and completions fluids space worldwide, improving customer performance by providing industry-leading service quality. Newpark Fluid Systems’ global footprint, top quartile safety performance, leading portfolio of technology and preeminent position in the growing geothermal space will accelerate success in the evolving energy landscape. Together with the leadership team, we look forward to creating tremendous value for our customers and employees in this next chapter of growth.”
Newpark Fluid Systems’ CEO, David Paterson, commented, “We are thrilled to partner with SCF. This new partnership will be a source of enormous value creation for both our customers and the entire Newpark Fluids Systems team. Our global strategic growth plan will now accelerate under a new and focused board with significant energy experience and commitment. SCF’s unsurpassed track record of success in the global energy services industry provides exciting opportunities as we look to the future.”
Lazard served as Newpark’s exclusive financial advisor in connection with the sale and Baker McKenzie served as legal advisor.
COMPELLING TRANSACTION RATIONALE
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Simplified business structure now positioned to become a leading, pure-play specialty rental business, prioritizing capital deployment toward organic and inorganic growth, and return of capital program. Newpark intends to prioritize capital investment in the growth of its matting fleet to support increased rental demand, which historically has generated annualized cash-on-cash returns in excess of
25% . With the largest composite matting fleet inthe United States , the Company is uniquely positioned to provide worksite access solutions to a diverse base of end-markets, including customers within the power and energy infrastructure sectors, where its DURA-BASE® composite matting system has become the standard for performance excellence. With a service life of up to approximately 15 years, the DURA-BASE system offers a safer, longer-lasting replacement to traditional wooden mats, which currently represent an estimated75% of the U.S. market. The Company also remains focused on the opportunistic acquisition of complementary worksite access businesses in adjacent markets, while remaining active under its share repurchase authorization. -
Reframes investment opportunity around a singular, higher-margin, free cash generative business. On a trailing 12-month basis through the second quarter 2024, the Industrial Solutions business generated revenue and operating income of
and$219 million , respectively, reflecting an operating margin in excess of$58 million 26% .
ABOUT NEWPARK RESOURCES
Newpark Resources, Inc. is a site access solutions company that manufactures, sells, and rents industry-leading sustainable composite matting products, along with a full suite of services, including planning, logistics, and remediation. As a geographically diversified company, the Company delivers superior quality and reliability across critical infrastructure markets, including electrical transmission & distribution, oil and gas exploration, pipeline, renewable energy, petrochemical, construction, and other industries. For more information, visit our website at www.newpark.com.
FORWARD-LOOKING STATEMENTS
This news release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All statements other than statements of historical facts are forward-looking statements. Words such as “will,” “may,” “could,” “would,” “should,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” and similar expressions are intended to identify these forward-looking statements but are not the exclusive means of identifying them. These statements are not guarantees that our expectations will prove to be correct 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, and its Quarterly Reports on Form 10-Q, as well as others, could cause actual plans or results to differ materially from those expressed in, or implied by, these statements. These risk factors include, but are not limited to, risks related to our streamlined business structure and future branding; divestitures; the worldwide oil and natural gas industry; our ability to generate organic and inorganic growth; economic and market conditions that may impact our customers’ future spending; our customer concentration and reliance on the
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IR CONTACT
Noel Ryan or Paul Bartolai
Investors@Newpark.com
Source: Newpark Resources, Inc.