• Complementary specialty oilfield additives which enhance OMNOVA's differentiated oilfield chemical offerings
• Dedicated oilfield laboratory, blending and warehouse facility to support OMNOVA's oil gas business operations in Houston, Texas, USA
• Expands OMNOVA's access to U.S. and international land operations
• Delivers innovative technologies, including New Fluid Solutions' new and revolutionary Whole in One™ water-based drilling fluid system
OMNOVA Solutions Inc. (NYSE: OMN) today announced that it has acquired New Fluid Solutions, Inc. (NFS), a producer of oil gas drilling fluid additives and other products based in Houston, Texas, USA. OMNOVA paid $5 million up front, plus up to an additional $2 million over the next two years with a performance-related component. The transaction includes New Fluid Solutions' full line of drilling fluid additives: lost circulation materials, emulsifiers, lubricants and shale inhibitors used in both onshore and offshore drilling operations. It also includes a newly constructed blending facility, warehouse and quality assurance/control laboratory on an owned 4-acre site in Stafford, Texas, near Houston. OMNOVA expects the transaction to be neutral to earnings in 2015 and slightly accretive in 2016 before modest cost synergies and significant revenue synergies.
"This exciting transaction provides the classic benefits of a bolt-on acquisition," said Kevin McMullen, OMNOVA Solutions' Chairman and Chief Executive Officer. He explained:
• "It rounds out our drilling fluids portfolio with complementary and proprietary drilling system additives like specialty lost circulation materials; custom-made emulsifiers and lubricants; and an integrated, multi-component drilling fluid system;
• It has significant untapped potential which we intend to leverage with our strong sales and marketing efforts and established innovation-centric customer relationships;
• It enhances our value proposition to customers by providing increased capabilities and broader system solutions;
• It adds field service expertise to OMNOVA's strong development capabilities; and
• It gives us a regional production and laboratory site with room to expand, putting us closer to our customers in Houston, the epicenter of the oil gas industry.
"Though small, New Fluid Solutions is an excellent addition to OMNOVA that can accelerate growth in our oil & gas business," said McMullen. "It provides key infrastructure we can quickly leverage across our entire oil & gas business and avoids new capital investments that we otherwise would have made."
New Fluid Solutions was founded in 2004 by Mano Shaarpour and had sales in 2014 of approximately $6 million and EBITDA of about $0.7 million. Mr. Shaarpour will remain as an advisor to OMNOVA.
Like OMNOVA, NFS has delivered strongly differentiated technologies to the market. An example is a breakthrough product currently being trialed in the field called the Whole in One™ drilling fluid system. This product combines multiple components into a fully integrated drilling fluid solution that is formulated to drill lateral and directional wells. It can tolerate contamination and provide excellent lubricity and shale inhibition - reaching the stability, speed and performance of an oil-based drilling fluid, but in an environmentally preferred water-based system. It can be used with either fresh or sea water as a base fluid. Customers can benefit from lower transportation, inventory, maintenance and environmental clean-up costs.
OMNOVA has served the oil & gas exploration and production markets for over a decade through its legacy business as well as through its acquisition of specialty chemicals producer Eliokem in 2010. OMNOVA is known for drilling and cementing products that offer superior fluid loss control and borehole stability under high temperature, high pressure (HTHP) conditions. More recently, OMNOVA has introduced products such as VERUS™ drilling fluid additive for fluid loss control under medium bottomhole temperatures, VISCODRILL® viscosifiers designed for clay-free and HTHP applications, and new PLIOLITE® grades for ultra and extreme HTHP conditions.
OMNOVA Solutions Inc. is a technology-based company with sales for the twelve month period ending February 28, 2015 of approximately $1.0 billion and a global workforce of approximately 2,300. OMNOVA is an innovator of emulsion polymers, specialty chemicals, and functional and decorative surfaces for a variety of commercial, industrial and residential end uses. Visit OMNOVA Solutions on the internet at www.omnova.com.
SOURCE OMNOVA Solutions Inc.
CONTACT: Sandi Noah, Communications, (216) 682-7011, or Paul DeSantis, Chet Fox, Investor Relations, (216) 682-7003
Web Site: http://www.omnova.com