Weatherford International has signed a definitive agreement to sell its laboratory services business to a group led by CSL Capital Management for $205 million in cash.
Under the agreement, Weatherford will divest its laboratory and geological analysis business, including personnel and associated contracts. After exiting the laboratory business, Weatherford will continue to maintain a close, collaborative relationship with CSL Capital that will enable it to continue to provide services to their joint customers.
The transaction is expected to close before year-end, subject to regulatory approvals, consents and other customary closing conditions. The transaction is subject to a customary post-closing working capital adjustment. Upon closing, Weatherford will use the proceeds to reduce its debt.
‘We are happy to have signed an agreement with a group led by CSL Capital Management, who has a strong track record of investing in upstream oilfield services and who recognizes the importance of continuing our commitment to providing the highest level of service to our customers,’ said Mark A. McCollum, President and Chief Executive Officer of Weatherford. ‘Weatherford’s laboratory business is a leader in the industry and its state of the art equipment and its highly-qualified workforce are well recognized in the industry. We believe that this transaction will unlock the full potential of this business for its customers and its employees.’
‘We are pleased to enter in to this transaction with Weatherford and we are excited to work with the talented employees of Weatherford Laboratories. Our intention is to invest in and grow this business to extend the leadership of this world-class laboratory and reservoir description company to serve the developing needs of the energy industry,’ said Charlie Leykum, Founding Partner of CSL Capital. ‘CSL Capital will work closely with Weatherford over the next few months to ensure a seamless transition of the operations of the business to minimize any impact to customers, employees and suppliers.’
This transaction is one in a series of planned divestitures intended to maximize Weatherford shareholder value by refocusing the Company’s portfolio on core businesses most closely aligned with its long-term strategy and to reduce its debt.
CSL Capital partnered with the Carlyle Energy Mezzanine Opportunities Fund II, L.P. to complete this acquisition. Carlyle will provide minority common equity and growth capital.