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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 12, 1996
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NEWPARK RESOURCES, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 1-2960 72-1123385
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3850 NORTH CAUSEWAY, SUITE 1770
METAIRIE, LOUISIANA 70002
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Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (504) 838-8222
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 12, 1996, Newpark Resources, Inc., a Delaware corporation
("Newpark"), completed the acquisition (the "Acquisition") of substantially all
of marine-related nonhazardous oilfield waste ("NOW") collections operations of
Campbell Wells, Ltd. ("Campbell Wells"), a wholly owned subsidiary of Sanifill,
Inc. ("Sanifill") for an aggregate purchase price of $70.5 million. The
Acquisition was completed pursuant to the terms of an Asset Purchase and Lease
Agreement, dated June 5, 1996 (the "Acquisition Agreement"), which provided for
the purchase and lease of certain marine related assets of Campbell Wells' NOW
service business, excluding its landfarming facilities and associated equipment
(the "Acquired Business"). In connection with Acquisition, Newpark assumed
obligations under a NOW Disposal Agreement (the "Disposal Agreement") with
Sanifill and Campbell Wells, providing for the delivery by Newpark for a period
of 25 years of an agreed annual quantity of NOW waste for disposal at certain of
Campbell Wells' landfarming facilities.
BUSINESS OF CAMPBELL WELLS
Campbell Wells, a wholly-owned subsidiary of Sanifill, provides NOW
processing and disposal at four landfarming facilities located in Louisiana (the
"Landfarms") and one facility in Zapata County, Texas (the "Zapata Facility").
Since April 1994, Campbell Wells has operated a processing facility in
Lacassine, Louisiana (the "Lacassine Facility") to process oilfield waste that
is contaminated with naturally occurring radioactive material ("NORM"). As part
of its disposal service, Campbell Wells collects and arranges for the
transportation of wastes from its transfer facilities to its landfarming
facilities. Campbell Wells also disposes of nonhazardous oil and gas related
wastes at the Zapata Facility, and a portion of this facility is utilized to
dewater and stabilize sludges, drilling muds and other liquids into solid waste
materials which are disposed of in disposal cells located on the site. For the
year ended December 31, 1995, Campbell Wells' revenue from its NOW and NORM
operations was approximately $31 million, of which approximately $19 million was
generated by the Acquired Business.
DESCRIPTION OF ACQUISITION
Assets Purchased. Under the Acquisition Agreement, Newpark (a) assumed
leases (for their remaining useful life) associated with Campbell Wells' eight
marine docks, including docks at three of the Landfarms, and five transfer
stations in the State of Louisiana that are used in the collection, transfer and
treatment of NOW, (b) purchased and leased (for their remaining useful life) all
of Campbell Wells' or Sanifill's interest in (i) all barges and marine
facilities used to transport NOW to the acquired docks and transfer stations,
(ii) all equipment at the acquired docks and transfer stations and (iii) all pit
remediation equipment, computers and related software, licenses or rights,
office equipment, office furniture, goodwill and all other assets used in the
NOW business not specifically excluded under the Acquisition Agreement. Newpark
also acquired all of the capital stock of a Sanifill subsidiary that entered
into the Disposal Agreement.
Assets Excluded. Newpark did not acquire any interest in any of the
Landfarms or their associated operating equipment, the Lacassine Facility and
its associated assets or the Zapata Facility and its associated assets. Newpark
also did not acquire the name "Campbell Wells" or any other names used by
Campbell Wells or Sanifill in connection with the Landfarms, the Lacassine
Facility or the Zapata Facility, although it is permitted to purchase all or any
such names for nominal consideration at such time as Campbell Wells or Sanifill
discontinues using them.
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Purchase Price; Source of Funds. The aggregate purchase price under the
Acquisition Agreement was $70.5 million, paid by wire transfer at the closing of
the Acquisition with part of the proceeds from the sale of 3,450,000 shares of
Newpark's common stock, at $30.00 per share, in an underwritten public offering
also completed on August 12, 1996. The remaining net proceeds from the public
offering, estimated at approximately $25.8 million after payment of related
transaction costs, were used to repay outstanding indebtedness under Newpark's
bank credit agreement, including all amounts outstanding under Newpark's
revolving line of credit and a portion of the amount outstanding under Newpark's
term loan.
Assumption of Liabilities. Other than obligations incident to the
post-closing performance under the contracts and agreements specifically assumed
by Newpark under the Acquisition Agreement, Newpark did not assume any
liabilities of Campbell Wells or Sanifill in the transaction, including any
environmental liabilities arising from the ownership and prior operation of any
of the assets acquired or the Landfarms. Sanifill and Campbell Wells jointly and
severally agreed to fully indemnify Newpark from all liabilities resulting from
any claims based on events that occurred or circumstances that existed on or
before the closing with respect to Campbell Wells' NOW disposal business.
NOW Disposal Agreement. The Disposal Agreement, which was assumed by
Newpark concurrently with the closing of the Acquisition, provides that for each
of the next 25 years following the closing, Newpark will deliver to Campbell
Wells for disposal at the Landfarms the lesser of (i) one-third of the barrels
of NOW that Newpark receives for processing and disposal in the States of
Louisiana, Texas, Mississippi and Alabama and in the Gulf of Mexico (the
"Territory") and (ii) 1,850,000 barrels of NOW, in each case excluding
saltwater. The number of barrels of NOW waste that Newpark is required to
deliver to the Landfarms in any year is subject to reduction by a number of
barrels determined by dividing revenues that Sanifill and its affiliates receive
from the collection and disposal of oilfield wastes or site remediation in the
Territory by the price per barrel that Newpark pays for disposal under the
Disposal Agreement. No deduction is made for revenues received by Sanifill and
its affiliates from (i) disposal at any of the Landfarms of NOW that is
generated and collected on land and is delivered to the Landfarms from the
generation site by on-land transportation ("Excluded NOW"), (ii) disposal of NOW
at the Zapata Facility and collection of NOW within a 200-mile radius of the
Zapata Facility, and (iii) disposal of NOW under the Disposal Agreement. Under
the Disposal Agreement, Campbell Wells and Sanifill will jointly and severally
fully indemnify Newpark from any and all liabilities, including environmental
liabilities, in connection with Campbell Wells' and Sanifill's ownership and
operation of the Landfarms, except for liability resulting from the delivery by
Newpark or its customers of waste that does not conform to the specifications
of the Disposal Agreement, which generally require Newpark and such customers to
deliver only waste that is legally classified as NOW. Newpark believes that such
specifications are consistent with the type of waste that it is permitted to
receive and that it will dispose of at the Landfarms.
Non-Competition Covenants. Sanifill agreed at the closing of the
Acquisition that for a period of five years from such closing neither it nor any
of its affiliates will engage, directly or indirectly, in the collection or
disposal of NOW or the site remediation and closure business in the Territory.
In addition, Campbell Wells executed a Joinder Agreement by which it also
agreed to such restrictions. However, Sanifill and its affiliates will be able
to continue to market and conduct activities related to (i) disposal at any of
the Landfarms of Excluded NOW, (ii) disposal of NOW at the Zapata Facility and
collection of NOW within a 200-mile radius of the Zapata Facility, (iii)
collection and disposal of NOW or other waste at the Lacassine Facility and (iv)
disposal of NOW under the Disposal
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Agreement. Sanifill and its affiliates also will be entitled, without violating
the Noncompetition Agreement, to collect or dispose of NORM, which is a type of
NOW; however, at present the only facility that Sanifill operates that is
legally authorized to dispose of NORM is the Lacassine Facility.
NEWPARK'S PLAN FOR COMBINED OPERATIONS
Newpark anticipates that the Acquisition will provide economies of scale
associated with handling a larger volume of waste through its facilities.
Newpark plans to combine the service capabilities of the Acquired Business with
its existing operations to speed the turnaround of barges and boats at its
transfer stations, thus providing better customer service. Economic efficiencies
are expected to result from the reduction in the size of the combined barge
fleet operated by Newpark to service its transfer stations and from the
consolidation of operations at more efficient transfer stations, permitting
Newpark to receive a substantially higher volume of waste without material
additions to existing costs. Furthermore, Newpark expects that as a result of
the Acquisition, access to Sanifill's disposal facilities under the Disposal
Agreement will allow Newpark to reduce its barge transportation costs and make
more efficient use of its barge fleet, further augmenting its processing
capacity. Newpark believes that its current processing and disposal capacity,
combined with access provided to the landfarm disposal facilities of Sanifill
under the Disposal Agreement, will be adequate to provide for expected future
demand for its oilfield waste disposal and other environmental services. Newpark
will nevertheless continue its strategy of adding injection disposal capacity
throughout the U.S. Gulf Coast region to more efficiently serve its customers.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired./1/
CAMPBELL WELLS, LTD--MARINE NOW SERVICE BUSINESS
Independent Auditor's Report
Financial Statements:
Statements of Net Assets at December 31, 1995 and 1994 and March 31,
1996.
Statements of Operations for each of the three years in the period ended
December 31, 1995 and the three months ended March 31, 1996 and 1995.
Notes to Financial Statements.
(b) Pro Forma Financial Information./1/
Unaudited Pro Forma Combined Statement of Income for the year ended
December 31, 1995.
Unaudited Pro Forma combined Statement of Income for the three months
ended March 31, 1996.
Notes to Unaudited Pro Forma Combined Statements of Income.
(c) Exhibits.
1. Asset Purchase and Lease Agreement, dated June 5, 1996, among the
registrant, Sanifill, Inc., Campbell Wells Ltd. and Now Disposal Holding
Co./1/
2. Now Disposal Agreement, dated June 4, 1996, among Sanifill, Inc., Now
Disposal Operating Co. and Campbell Wells, Ltd./1/
3. Amendment to Asset Purchase and Lease Agreement, dated July 15, 1996,
among the registrant, Sanifill, Inc., Campbell Wells, Ltd. and Now
Disposal Holding Co./1/
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/1/ Incorporated by reference from the registrant's Registration Statement on
Form S-3 (No. 333-05805).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed by the undersigned hereunto
duly authorized.
NEWPARK RESOURCES, INC.
Dated: August 13, 1996 By /s/ James D. Cole
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James D. Cole, Chairman of the Board,
President and Chief Executive Officer
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