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The $15 million proceeds will be used for general corporate purposes & to pay outstanding debt
Layne Christensen Co. announced that on Oct. 1, 2012 it sold all of the exploration and production (E&P) assets of its Energy Division to LR Energy Inc., a portfolio company of Longroad Capital Partners III, L.P., for $15 million. Layne intends to use the proceeds from this transaction to pay down outstanding debt and for general corporate purposes.
Rene Robichaud, CEO of Layne, stated, "This transaction reflects our strategy to transform Layne into a leading sustainable solutions provider to the world of essential natural resources—water, mineral, and energy. 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. 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 to 5 years."
As reflected in the consolidated financial statements of the second quarter 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. Layne does not expect to record any additional material charges associated with this transaction.