Newpark Agrees to Purchase Well Site Construction Company
Newpark Resources has signed an asset purchase agreement with SEM Construction Company ("SEM"), headquartered in Grand Junction, Colorado.
Under the terms of the agreement, Newpark Resources is to acquire substantially all of the assets and operations of SEM for cash consideration of $21.3 million, subject to working capital and other adjustments. SEM is a full-service well site construction company engaged in construction, reclamation, maintenance, and general rig work at drilling locations for the oil and gas industry throughout Western Colorado. SEM recorded revenues of $14.3 million for the 12 months ending June 30, 2007. The acquisition is expected to be accretive to Newpark Resources, Inc. earnings in 2007.
Paul Howes, President and Chief Executive Officer of Newpark, stated, "We are excited to announce this acquisition, which fits very well into our long-term strategy for the Mats and Integrated Services business. This acquisition provides us with geographic expansion into the important Piceance basin, which will help to offset the cyclicality of our Gulf Coast business. Also, this acquisition provides an expansion to our product and service offerings, including well site equipment rentals, which is consistent with our strategy of becoming a total well site services provider to the oil and gas industry."
This acquisition is subject to the completion of final due diligence and other customary requirements and is expected to close during the third quarter of 2007.
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.
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