Newpark Resources closes acquisition of Alliance Drilling Fluids
THE WOODLANDS, Texas -- Newpark Resources announced that it has completed the previously announced acquisition of substantially all assets and operations of Alliance Drilling Fluids, a provider of drilling fluids, proppants, and related services headquartered in Midland, Texas.
Total cash consideration at closing was approximately $53 million, which was funded through borrowings on Newpark’s revolving credit facility. The purchase price is subject to further adjustments, based upon actual working capital conveyed. Additional consideration up to $4.3 million may be payable based on the profitability of the proppant distribution 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.
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.