Company Sale & Recapitalization
Wilcox Investment Bankers served as M&A Advisor to Petrosmith in its sale and recapitalization with Blue Wolf Capial Partners.
Petrosmith, based in Abilene, Texas, is a premier manufacturer of surface equipment, primarily tanks and vessels, for the oil and gas industry. The Company operates substantial manufacturing capacity (approximately 260,000 covered square feet situated on 76.5 acres) and a new, state-of-art coating facility and a pipe yard with an inventory of 1.65 million feet of used casing and tubing as well as offers a full suite of reclamation and refurbishment processing services (approximately 95,000 covered square feet situated on 120.2 acres). The Company primarily serves customers in the highly active Permian Basin, as well as in the Eagle Ford and Western Oklahoma.
One of the Company's owners, a high net worth family office, desired to sell its ownership position as part of their refocus of investing efforts. The other large owner was the founder and active in the business. The owners desired to test the market to determine if a reasonable transaction could be consummated that satisfied both owners' agendas.
To complicate matters more, Petrosmith's earnings were highly volatile with a significant ramp up in 2012-2014, large losses in 2015-2016 and renewed upward momentum in 2017 during the recovery of the oil and gas industry. Further, the Company was involved in a material lawsuit for which the outcome was uncertain.
We were engaged by Petrosmith as merger & acquisition advisor. We marketed the Company and created an auction dynamic among prospective bidders. We broadly and aggressively solicited interest from both strategic buyers and private equity groups and successfully negotiated a company sale with Blue Wolf Capital
Partners. We were able to work through the challenges and structure a transaction that satisfied the owners' goals.