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[September 2008]
CARBO Ceramics Announces Sale Of Fracture & Reservoir Diagnostic Assets
CARBO Ceramics Inc (Irving, TX, USA) has entered into a definitive agreement with Halliburton to sell a portion of the assets of its wholly-owned subsidiary, Pinnacle Technologies, for US$137 million. The company will sell its Fracture and Reservoir Diagnostics business, including the Pinnacle Technologies Inc name and related trademarks to Halliburton but will retain the industry-leading hydraulic fracturing simulation software FracProPT, the hydraulic fracturing design, engineering and consulting business and Applied Geomechanics, a leader in tiltmeter technology for geotechnical applications.
In addition, the company's Board of Directors authorised the repurchase of up to two million shares of its common stock. As of 28 August 2008 the company had 24.6 million shares outstanding.
Gary Kolstad, President and CEO of CARBO Ceramics, commented on the transaction, stating: "The fracture and reservoir diagnostics business has been a high growth business for us, and we believe the future potential of this business is reflected in the value we received for these assets. In addition to the sale of assets, we have executed a multi-year proppant supply agreement with Halliburton that is intended to support our plans to continue to expand the production and use of our superior quality ceramic proppant worldwide.
“This transaction monetizes the value of a high growth business we acquired a little over six years ago and eliminates a conflict with our valued ceramic proppant customers. Equally important, we are retaining the highly respected software and consulting businesses. These two businesses are highly complementary to the ceramic proppant business, share the same client base and taken together, form an important piece of the global fracturing marketplace.
"We recently announced a 21 percent increase in our quarterly dividend, the approval of a $70 million capacity expansion at our facility in Toomboro, Georgia and now the authorization to repurchase up to two million shares of the Company's common stock. These actions clearly demonstrate our confidence in our ability to grow our business and generate cash."
The final sales price of the assets being sold is subject to adjustment for changes in working capital and the closing of the transaction is subject to approval under The Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary closing conditions. The parties expect closing to occur within 30 to 60 days.
www.carboceramics.com
ENDS