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Layne Christensen Co. has sold all of the E&P assets of its energy division to LR Energy Inc., a portfolio company of Longroad Capital Partners III LP for US $15 million, according to a news release.
Layne intends to use the proceeds from the transaction to pay down outstanding debt and for general corporate purposes.
“Although we are exiting the energy production business, we do intend, as previously communicated, to be in the oil and gas services business for the foreseeable future,” Rene Robichaud, CEO of Layne, said in the news release. “We see a significant opportunity to build a total water management solutions business under the Layne Energy Services banner that sustainably addresses the critical water issues challenging the E&P industry. We plan to develop this business into a $200 million revenue enterprise over the next 3-5 years.”
As reflected in the consolidated financial statements of the 2Q ended July 31, 2012, Layne reclassified its energy division as a discontinued operation and recorded a non-cash, after-tax charge of $20 million to write down the carrying value of these assets to the expected selling price, less costs to sell, the release stated. Layne does not expect to record any additional material charges associated with this transaction.