Weatherford International Plc (NYSE: WFT) said Oct. 22 it agreed to exit its laboratory services business in a $250 million cash sale to a group led by CSL Capital Management LP.
Under the agreement, CSL Capital partnered with the Carlyle Energy Mezzanine Opportunities Fund II LP to acquire Weatherford’s laboratory and geological analysis business, including personnel and associated contracts. Carlyle will provide minority common equity and growth capital, according to the Weatherford press release.
Weatherford said the transaction is one in a series of planned divestitures intended to maximize the Swiss-based oilfield service company’s shareholder value by refocusing its portfolio on core businesses most closely aligned with its long-term strategy and to reduce its debt.
RELATED: Weatherford To Sell Land Drilling Rigs For $288 Million
During the company’s second-quarter earnings call in late July, Weatherford CFO Christoph Bausch said the company had other divestitures underway that would account for a “large portion” of its $500 million target.
“We will continue to be diligent in getting these deals across the finish line, as we explore various paths to maximize shareholder value,” Bausch said, according to a company transcript of the earnings call. “We're confident that we will reach an agreement on, at least, one of the planned divestitures during the third quarter.”
After exiting the laboratory business, Weatherford said it will continue to maintain a close, collaborative relationship with CSL Capital that will enable it to continue to provide services to their joint customers.
Charlie Leykum, Founding Partner of CSL Capital, said in a statement: “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.”
Weatherford said it expects to close the transaction before year-end, subject to regulatory approvals, consents and other customary closing conditions.
The Carlyle Group LP (NASDAQ: CG) is a global alternative asset manager with $210 billion of assets under management across 335 investment vehicles as of June 30, according to the release. Sidley Austin LLP provided legal advice to the firm for the transaction.
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