By Svea Herbst-Bayliss

(Reuters] – Newpark Resources, a company that supplies drilling fluids systems as well as composite matting systems, has been urged by an activist investor, to sell its fluids business and separate its industrials system, according to a letter obtained by Reuters.

Bradley Radoff is a private investor and was previously a portfolio manager for Daniel Loeb’s Third Point hedge funds. He has now approached Newpark’s board to push for the separation. The two sections lack synergies and appeal to different investor groups, Radoff claims. They also increase excessive corporate costs.

Radoff informed the board that “the Company’s disclosures and investor presentations show that the Industrial Solutions business is on a growth track, while Fluid Systems is unprofitable at the other end of the energy transition spectrum.”

According to a spokesperson, “Newpark’s management and board are very focused on creating shareholder wealth as they execute on our strategic priorities,” she said.

A spokesperson said the company had already stated that JPMorgan Chase (NYSE 🙂 was being hired to evaluate its portfolio and determine alternatives. The company also said it values shareholder input and hopes “to have continued constructive dialogue with (Bradley Radoff).”

Radoff stated that Newpark is unable to tell “a credible story about governance, environmental and social issues” because it keeps the segments separate. Newpark’s majority of board members hail from the oil-and gas industry.

On Monday, the stock closed at $2.72. The stock traded at $7.80 five years ago.

Radoff sits on the board of independent energy company VAALCO Energy and has successfully pushed to make changes at Tetra Technologies. The company accepted to add a different director to its board, and to appoint an interim chairman. However, Newpark is trying to force Newpark out at a time when other businesses are going bankrupt.