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8-K - FORM 8-K - NEWPARK RESOURCES INC | c13705e8vk.htm |
Exhibit 99.1
NEWS RELEASE |
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Contacts: | James E. Braun, CFO Newpark Resources, Inc. 281-362-6800 |
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FOR IMMEDIATE RELEASE
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Ken Dennard, Managing Partner Dennard Rupp Gray & Lascar, LLC ksdennard@drg-l.com 713-529-6600 |
NEWPARK RESOURCES TO ACQUIRE AUSTRALIAN
DRILLING FLUIDS BUSINESS
FROM RHEOCHEM PLC
DRILLING FLUIDS BUSINESS
FROM RHEOCHEM PLC
THE WOODLANDS, TX March 4, 2011 Newpark Resources, Inc. (NYSE: NR) today announced it has
entered into a definitive agreement with Rheochem PLC to acquire its drilling fluids and
engineering services unit. Rheochem PLC is a publicly-traded Australian-based oil and gas company.
Rheochem provides drilling fluids and engineering services to the oil and gas exploration and
geothermal industries with operations in Australia, New Zealand and India. Newpark will pay
approximately A$23.8 million at closing, subject to typical adjustments for working capital.
Additional consideration may be payable based on financial results of the acquired business over a
one-year earnout period, up to a maximum total consideration of A$45 million. Newpark expects to
fund the acquisition price, including any earnout payment, from cash on hand. This acquisition is
subject to the approval of the shareholders of Rheochem PLC and normal customary closing conditions
and is expected to close in the second quarter of 2011.
This acquisition is consistent with our strategic plan to expand our drilling fluids business
globally, providing us with a footprint in the growing Asia Pacific markets, stated Paul Howes,
Newparks President and Chief Executive Officer. We are also acquiring the Rheochem brand name,
which is recognized in the Far East, and we will continue to operate under that name. Rheochem is
a natural fit with Newpark, as employees of both companies share the commitment to provide
operators with best-in-class drilling fluids and engineering services.
In the most recently completed fiscal year ended June 30, 2010, Rheochem PLCs drilling fluid
services segment generated revenues of A$20.3 million and EBITDA of A$3.6 million, as reported in
Rheochem PLCs audited financial statements. For the year ended June 30, 2009, revenues were
A$34.2 million and EBITDA was A$6.1 million. Fiscal first half results for the six months ended
December 31, 2010 were negatively affected by severe weather in Australia. Unaudited revenues and
EBITDA of the drilling fluids segment for this six month period, as reported by Rheochem PLC, were
A$10.2 million and A$1.1 million, respectively.
Newpark Resources, Inc. is a worldwide provider of drilling fluids, temporary worksites and
access roads for oilfield and other commercial markets, and environmental waste treatment
solutions. 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 managements current expectations, estimates and
projections. All statements that address expectations or projections about the future, including
the statements regarding the business and financial outlook of Rheochems drilling fluids segment
and the anticipated benefits of the acquisition to Newpark, Newparks 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, 2009, as well as others, could cause results to
differ materially from those stated. These risk factors include, but are not limited to, potential
disruption of Newparks business and operations as it integrates the acquired Rheochem segment into
its business, political and economic conditions in the markets in which the acquired business
operates, the ability to realize the anticipated benefits from the acquisition, our customer
concentration and cyclical nature of our industry, the availability of raw materials and skilled
personnel, 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 restrictions on offshore drilling activity in the Gulf of Mexico. Newparks
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.
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