Weatherford to divest laboratory services business for $205m

US oil and natural gas service provider Weatherford International has entered a $205m agreement to offload its laboratory services business to a group led by private equity firm CSL Capital Management.

The proposed sale includes Weatherford’s laboratory and geological analysis business. The deal will also provide personnel currently employed with the business unit and associated contracts.

Even after the completion of the sale, Weatherford will continue to have a collaborative relationship with CSL Capital.

Proceeds from the transaction will be used to reduce the company’s debt.

Weatherford International president and CEO Mark McCollum said: “We are happy to have signed an agreement with a group led by CSL Capital Management, who has a strong track record of investing in upstream oilfield services and who recognises the importance of continuing our commitment to providing the highest level of service to our customers.

“We believe that this transaction will unlock the full potential of this business for its customers and its employees.”

The transaction is part of the company’s strategy to pursue planned divestitures in order to maximise shareholder value while refocusing its portfolio on core businesses.

CSL Capital Management founding partner Charlie Leykum said: “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.”

CSL Capital’s partner in the transaction is the Carlyle Energy Mezzanine Opportunities Fund II.

The completion of the sale is anticipated to occur before the end of the year, subject to receipt of regulatory approvals and satisfaction of other closing conditions.