SG Credit Partners Provides $5 Million Acquisition Financing

Apr
17
2019
Target Company:
Oilfield service provider that specializes in pipeline construction and the fabrication of modularized production facility equipment to midstream operators as well as exploration and production (E&P) companies that operate in the Permian and Eagle Ford Basins.
Financial Profile: Revenue: $50mm | EBITDA: $8mmAcquiring Company:
An energy-focused holding company that provides financial, technical, operational and strategic management services to its subsidiaries across the globe.

Financing Situation:
Target Company management wanted to sell its oilfield services business for liquidity and to focus on larger infrastructure projects. Given the timing of new infrastructure projects, Target Company management wanted to sell its oilfield services business within 30 days. Target Company management had a personal relationship with Acquiring Company management and presented an exclusive, quick closing acquisition opportunity. Since the Target Company is asset light (primarily just accounts receivable with a progress billing element), an ABL facility was insufficient to close the entire deal and a bank offering a revolver + cash flow term loan would have taken too long.

The Solution:
SG Credit Partners (“SGCP”) was able to get comfortable with the deal based on previous lending experience with Acquiring Company management, strong historical financial performance of Target Company, and industry tailwinds. SGCP provided a $5.0 million bifurcated credit facility to close the acquisition quickly (within 3 weeks) and provide additional working capital. SGCP’s $5.0 million bifurcated credit facility consisted of a $2.0 million interest-only loan and a $3.0 million term loan. SGCP provided this structure to close the acquisition quickly and bridge the Company to a new senior lender. The new senior lender will refinance SGCP’s $2.0 million interest-only loan and SGCP will then subordinate its $3.0 million term loan under its typical second lien structure.


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California loans are made pursuant to SG Credit Partners, Inc.'s California Department of Corporations Finance Lender License No. 60DBO-87290. Credit approval is subject to SG Credit Partners, Inc.'s credit standards, and actual terms (including actual loan amount) may vary by applicant. SG Credit Partners, Inc. requires certain supporting documentation with each new application. Complete disclosures of APR, fees, and payment terms are provided with each loan and are available from SG Credit Partners, Inc. at 23 Corporate Plaza, Suite 100, Newport Beach CA 92660, telephone 1-800-631-2423.