Newpark Resources (NYSE:NR) Completes Sale of Fluids Systems Segment to SCF Partners

September 15, 2024 10:59 PM PDT | By Team Kalkine Media
 Newpark Resources (NYSE:NR) Completes Sale of Fluids Systems Segment to SCF Partners
Image source: Shutterstock

Newpark Resources, Inc. (NYSE:NR) has announced the successful completion of the sale of its Fluids Systems segment to SCF Partners, Inc., a leading private equity firm specializing in the global energy sector. The transaction, marking a significant strategic shift for Newpark, was executed at a base sale price of USD 127.5 million. However, the final net consideration received from the sale amounts to USD 56 million, which includes an initial cash payment of USD 70 million, adjusted by USD 19 million for foreign cash conveyed with the business and a USD 5 million interest-bearing seller note receivable. The overall purchase price is subject to adjustments based on final calculations of working capital, accrued taxes, certain other liabilities, and outstanding debt.

The transaction included an adjustment of USD 43 million to the base price due to lower-than-expected working capital at closing compared to the average net working capital balance for 2023, along with accrued taxes and other liabilities. Additionally, USD 10 million of outstanding debt was factored into the deal. Following the sale, Newpark anticipates recognizing a loss on the transaction, which is expected to generate additional U.S. federal net operating loss tax benefits in the range of USD 7 million to USD 10 million. Combined with approximately USD 20 million in existing U.S. federal net operating loss and other credit carryforwards, these benefits will help offset future U.S. federal tax obligations.

As a result of the sale, the Fluids Systems segment will be reclassified as Discontinued Operations in all future financial reports. Concurrently, Newpark has amended its U.S. asset-based revolving credit agreement, reducing the facility size from USD 175 million to USD 100 million. As of September 13, 2024, the company reported total cash of approximately USD 40 million and pro forma availability of about USD 55 million under the ABL Facility. The net proceeds from the sale are intended for strategic investments, including expanding the composite matting fleet, pursuing opportunistic inorganic growth, and conducting share buybacks under its existing USD 50 million share repurchase authorization. This sale is a key element of Newpark’s strategic realignment, allowing the company to focus on its core operations and future growth opportunities.


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media LLC (Kalkine Media, we or us) and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures/music displayed/used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it, as necessary.


Sponsored Articles


Investing Ideas

Previous Next