Nuverra Environmental Solutions Announces Agreement to Sell Thermo Fluids Inc. for $175 Million
March 10 2014 - 4:02PM
Business Wire
Nuverra Environmental Solutions (NYSE:NES) (“Nuverra” or “the
Company”) today announced that it has entered into a definitive
agreement to divest the Company’s Industrial Solutions segment,
Thermo Fluids Inc. (“TFI”), to VeroLube, Inc. (“VeroLube”).
VeroLube is developing two re-refineries with a patented
technology, and focusing on a consolidation of the used oil
industry.
Under the terms of the agreement, Nuverra will receive $165
million in cash and $10 million in VeroLube shares. The cash
portion of the transaction is subject to adjustment based on the
actual working capital conveyed at closing. The sale is expected to
close in the second quarter of 2014, subject to customary
conditions, including regulatory approval and final confirmatory
legal and environmental due diligence. Nuverra intends to use the
proceeds from the transaction to pay down debt and for general
corporate purposes.
Mark D. Johnsrud, Nuverra’s Chief Executive Officer, stated, “I
am very pleased to enter into this definitive agreement, which is
consistent with the strategy we have previously discussed to focus
exclusively on growing our core shale environmental solutions
business. Our team has done a tremendous job executing our business
transformation strategy, and while we have more to do, I am very
excited about our Company and its future. I believe the vertical
integration and consolidation strategy that the VeroLube and
Canaccord Genuity team is focusing on is very compelling, and
Nuverra is excited to receive VeroLube equity as part of our
payment consideration.”
The transaction is subject to a financing condition and provides
VeroLube until June 25, 2014 to fund and close the transaction.
VeroLube has engaged the Canaccord Genuity Corp. (“Canaccord”) to
complete the financing. Terry Lyons, the Chairman of VeroLube, has
successfully grown a number of businesses, and currently serves or
has served on the management team or board of a number of leading
Canadian companies. More information on VeroLube, its Board of
Directors, Advisory Board, and management team can be found on its
website at www.verolube.com.
VeroLube’s business strategy is to consolidate the used oil
collection industry and develop re-refineries using its patented
ReGenTM process to recycle and process used oil. VeroLube believes
its ReGenTM process allows for 75% of re-refined outputs to be high
quality base oils for use as lubricants, with the ability to
produce 50% of output as Group III base oils without
hydro-treating. In addition, VeroLube believes the process allows
for lower operating cost than alternative re-refining
technologies.
Mr. Lyons commented: “TFI provides us with a significant
platform and immediate scale, including established public company
corporate support and accounting capabilities, to expand our
business and execute on our consolidation strategy. We also see
significant synergies between TFI’s collection volumes and
VeroLube’s proprietary re-refinery process. We have engaged
Canaccord as our financial advisor, and they have had numerous
successes – including with some of my previous enterprises – in
raising growth capital for compelling business models like VeroLube
that introduce technological change and create added value. I look
forward to working with the team to deliver on this
opportunity.”
Houlihan Lokey is serving as financial advisor to Nuverra, and
Squire Sanders is serving as Nuverra’s legal counsel on the
transaction.
About Nuverra
Nuverra Environmental Solutions is among the largest companies
in the United States dedicated to providing comprehensive
and full-cycle environmental solutions to customers in energy and
industrial end-markets. Nuverra focuses on the delivery,
collection, treatment, recycling, and disposal of restricted
solids, water, wastewater, used motor oil, spent antifreeze, waste
fluids and hydrocarbons. The Company continues to expand its suite
of environmentally compliant and sustainable solutions to customers
who demand stricter environmental compliance and accountability
from their service providers. Interested parties can access
additional information about Nuverra on the Company's web site at
http://www.nuverra.com, and in documents filed with the United
States Securities and Exchange Commission, on the SEC's web site at
http://www.sec.gov.
Forward-Looking
Statements
This press release may contain "forward-looking statements"
within the meaning of the safe harbor provisions of the United
States Private Securities Litigation Reform Act of 1995. Words such
as "expect," "estimate," "project," "budget," "forecast,"
"anticipate," "intend," "plan," "may," "will," "could," "should,"
"believes," "predicts," "potential," "continue," and similar
expressions are intended to identify such forward-looking
statements. Forward-looking statements in the press release
include, without limitation, forecasts of growth, revenues,
business activity, adjusted EBITDA and pipeline expansion,
statements regarding possible divestitures, timing of such
divestitures, acquisitions, financings and other matters that
involve known and unknown risks, uncertainties and other factors
that may cause results, levels of activity, performance or
achievements to differ materially from results expressed or implied
by this press release. Such risk factors include, among others:
difficulties encountered in acquiring and integrating businesses;
uncertainties in evaluating goodwill and long-lived assets for
potential impairment; potential financial impact of litigation;
risks of successfully consummating expected transactions within the
timeframes or on the terms contemplated, including risks that such
transactions may fail to close due to unsatisfied closing
conditions; whether certain markets grow as anticipated; pricing
pressures; risks associated with our indebtedness; low oil and/or
natural gas prices; changes in customer drilling activities and
capital expenditure plans; shifts in production into shale areas in
which we currently do not have operations; control of costs and
expenses; and the competitive and regulatory environment.
Additional risks and uncertainties are set forth in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31,
2013, as well as the Company's other reports filed with the United
States Securities and Exchange Commission, which are available at
http://www.sec.gov/ as well as the Company's web site at
http://nuverra.com/. As a result of the foregoing considerations
and the other limitations of non-GAAP measures described elsewhere
herein, you are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
presentation. All forward-looking statements are qualified in their
entirety by this cautionary statement. The Company undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Nuverra Environmental Solutions, Inc.Liz Merritt,
602-903-7802VP-Investor Relations &
Communicationsir@nuverra.comorThe Piacente Group, Inc.Brandi
Piacente, 212-481-2050Presidentnuverra@tpg-ir.com