Newpark Resources to Acquire Assets and Operations of Alliance Drilling Fluids for $53M
Newpark Resources (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