UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): February 10, 2014

 

NEWPARK RESOURCES, INC.

(Exact name of registrant as specified in its charter)

 

Delaware		001-02960		72-1123385
(State or other jurisdiction		(Commission		(IRS Employer
of incorporation)		File Number)		Identification No.)

                                             

2700 Research Forest Drive, Suite 100
The Woodlands, Texas		77381
(Address of principal executive offices)		(Zip Code)

                                                                                     

Registrant’s telephone number, including area code: (281) 362-6800

 

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c))

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On February 10, 2014, Newpark Resources, Inc. (“Newpark”) executed a Membership Interests Purchase Agreement (the “Purchase Agreement”) by among Newpark, Newpark Drilling Fluids LLC (“Newpark DFI,” and together with Newpark, the “Newpark Parties”) and ecoserv, LLC (“Purchaser”).

 

Pursuant to the terms and conditions of the Purchase Agreement, the Newpark Parties have agreed to sell Newpark’s environmental services business to the Purchaser. Newpark’s environmental services business provides environmental services in the oil and gas industry including the receiving, collecting, transferring, processing and disposal of wastes generated in the oil and gas industry including waste that is contaminated with crude oil, petroleum products, petrochemicals and naturally occurring radioactive materials. The environmental services business also receives, collects, transfers, processes and disposes of nonhazardous industrial wastes and other nonhazardous wastes generated by refiners, manufacturers, service companies and industrial municipalities. The environmental services business is comprised of the following entities within Newpark’s affiliated group: Newpark Environmental Services, LLC (“NES”) and Newpark Environmental Management Company, L.L.C. (“NES Management”). The transaction is structured as a sale of the outstanding equity interests in NES and NES Management.

 

Under the terms of the Purchase Agreement, the cash consideration payable at closing is $100 million (the “Cash Consideration”), subject to a working capital adjustment. A portion of the Cash Consideration ($8 million) will be held in escrow and released pursuant to the terms of an escrow agreement to be entered into in connection with the closing of the transaction by and between the Newpark Parties, the Purchaser and an escrow agent.

 

The Purchase Agreement contains negotiated representations, warranties and covenants by both the Newpark Parties and the Purchaser which are believed to be customary for transactions of this kind. The Purchase Agreement contains agreements relating to the operation of the business in the ordinary course pending the closing and other matters relating to the parties’ obligations prior to and after the closing. In this regard, Newpark agrees that it will not engage in a competitive business for a period starting on the closing date of the transaction and ending at the earlier of the fifth anniversary following the closing or a change of control at Newpark.

 

The Purchase Agreement provides that the Purchaser will indemnify the Newpark Entities for certain environmental liabilities associated with the business and otherwise contains indemnification provisions which are believed to be customary for transactions of this type. The parties’ respective indemnity obligations relating to certain representations and warranties contained in the Purchase Agreement only apply with respect to aggregate liabilities in excess of specified thresholds, are subject to caps and are only effective for specified periods of time.

 

The parties’ obligations to consummate the transaction are subject to customary conditions, including governmental regulatory approvals. The Purchase Agreement provides for a $5 million reverse-termination fee which will be payable to Newpark if the Purchase Agreement is terminated under certain circumstances.

  

 

The foregoing description is not complete and is qualified in its entirety by reference to the Purchase Agreement, a copy of which will be filed as an exhibit to Newpark’s Form 10-Q for the quarter ending March 31, 2014.

 

A copy of the press release announcing the execution of the Purchase Agreement is attached hereto as Exhibit 99.1 and is incorporated by reference into this Item 1.01.

 

Item 9.01     Financial Statements and Exhibits.

 

(d)      Exhibits.

 

 

Exhibit No.		Description
99.1		Press Release dated February 11, 2014.

  

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Dated: February 12, 2014	NEWPARK RESOURCES, INC.
	By:	/s/ Gregg S. Piontek
		Gregg S. Piontek
		Vice President and Chief Financial Officer

  

 

EXHIBIT INDEX

   

Exhibit No.		Description
99.1		Press Release dated February 11, 2014.

Exhibit 99.1

 

NEWS RELEASE

 

 

FOR IMMEDIATE RELEASE	Contacts:	Gregg Piontek, VP & CFO Newpark Resources, Inc. 281-362-6800
		Ken Dennard, Managing Partner Karen Roan, SVP Dennard-Lascar Associates 713-529-6600

 

 

 

NEWPARK RESOURCES ANNOUNCES DEFINITIVE AGREEMENT TO SELL ENVIRONMENTAL SERVICES BUSINESS

 

THE WOODLANDS, TX – February 11, 2014 – Newpark Resources, Inc. (NYSE: NR) today announced that it has entered into a definitive agreement to sell its Environmental Services business to ECOSERV, LLC, a portfolio company of Denver-based private equity group Lariat Partners, LP. Under the terms of the agreement, Newpark will receive $100 million in cash, subject to adjustment based on actual working capital conveyed at closing. While containing representations, warranties and indemnities which are customary for transactions of this nature, this agreement significantly limits Newpark’s post-closing environmental obligations, including those related to the waste transfer and disposal facilities.

 

Paul Howes, Newpark’s President and Chief Executive Officer, stated, “I am very pleased with the signing of this agreement, which is consistent with our stated strategy of focusing our energy on expanding our markets and developing leading technologies within our core drilling fluids and mats segments. We appreciate our dedicated employees in the Environmental Services division and their many years of valuable service.”

 

The sale is expected to close in the first quarter of 2014, subject to customary conditions, including regulatory approval. Proceeds from the sale will be used for general corporate purposes, potential acquisitions and/or share repurchases under the company’s current repurchase program.

 

 

Simmons & Company International is serving as financial advisor to Newpark in this transaction.

 

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 management's current expectations, estimates and projections. All statements that address expectations or projections about the future, including Newpark's 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, 2012, as well as others, could cause results to differ materially from those stated. These risk factors include, but are not limited to, our ability to execute our business strategy and make successful business acquisitions and capital investments, our customers’ activity levels in exploration and drilling , operating hazards inherent in the oil and natural gas industry, particularly offshore, our international operations, the availability of raw materials and skilled personnel, , our customer concentration and cyclical nature of our industry, our market competition, the cost and continued availability of borrowed funds, legal and regulatory matters, including environmental regulations, inherent limitations in insurance coverage, potential impairments of long-lived intangible assets, technological developments in our industry, and the impact of severe weather, particularly in the U.S. Gulf Coast. Newpark's 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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