Multinational oilfield services company Weatherford International plc (NYSE: WFT) has agreed to sell its engineered chemistry and integrity drilling fluids business to Berkshire Hathaway affiliate The Lubrizol Corp. for $750 million in cash. The price is subject to customary purchase price adjustments, plus a potential increase of $75 million for an earnout that is tied to the post-closing performance of the businesses.
Weatherford's engineered chemistry business provides chemical treatments for oil and gas production and produced waters as well as additives for drilling, workover and stimulation operations, while its Integrity drilling fluids business includes drilling fluid systems and additives for enhanced performance of drilling operations.
Bernard J. Duroc-Danner, chairman, president and CEO of Weatherford said the agreement is part of the oilfield services company's previously announced plan to divest the its non-core businesses.
"This transaction brings our realized cash divestiture proceeds to approximately $1.8 billion during 2014 and implies that our net debt will range between $6.6 billion to $6.8 billion at year end 2014. This is substantial progress," Duroc-Danner continued.
"For us, it is a decisive move into a large adjacent market space that, we believe, will value the combined technologies, fluid formulation capabilities and applications knowledge of our legacy and newly acquired businesses," said James L. Hambrick, Lubrizol chairman, president, and CEO.
The sale is subject to customary closing conditions and regulatory approvals and is expected to close before year end 2014. Proceeds from the sale will be used to pay down debt at the oilfield services company