Maximizing Proceeds Leveraging
Owner-Occupied Real Estate: A Case Study
One of only four vertically-integrated pressure control oilfield equipment manufacturers globally that offers both industry-required capital equipment and elastomeric products, Integrated Equipment, Inc. (Integrated) designs, manufactures, distributes and services equipment for oilfield services clients globally. Clients include well-servicing contractors, rental tool companies, land and jack-up drilling contractors, as well as major and independent oil companies.
During 2015-2016 the oil and gas industry experienced the worst downturn in 75 years as a result of oversupply, causing slumping oil prices. Market participants faced lower margins, decreased profitability, and impaired cash flow, forcing a large number of oilfield services companies into bankruptcy and destabilizing major players. Capital providers jettisoned the space, and many companies were left without working capital. Integrated formulated a repositioning plan including lean inventory management, a global footprint and a new focus on maintenance and replacement products, but needed working capital.
Crown Financial Partners provided a $9 million credit facility against the company’s assets, including domestic and foreign accounts receivable, inventory, machinery and equipment, and owner-occupied real estate. The financing will be used to pay existing indebtedness, provide working capital for future growth, and enable Integrated to continue implementing their repositioning plan.
““Crown created an innovative financing package within a tight time frame. With their help, we are now well-positioned for success, and we are excited about our future. We started planning this runway for growth in November and believe it will help us drive our revenue to start growing profitably again very soon.””
With working capital and restructured financing, Integrated is now better positioned for profitable growth in an unpredictable market. With their repositioning plan in place they have implemented leaner, efficient real-time inventory; improved supply chain performance; expanded their offering to include replacement parts; and established a global support network. As a result, they have less exposure to the volatility of the market and are less dependent on revenue from new drilling. In addition, they can capture revenue from providing products and services throughout the life cycle of the equipment.
““Integrated’s management had already proven themselves to be resilient operators, repositioning the company while juggling liquidity constraints. Ash and his management team successfully navigated the most recent market downturn and are now positioned to capitalize on the compelling opportunities in front of them.””
About Crown Partners LP
Crown Partners combines expertise in debt capital transactions and deep relationships across the direct lending marketplace to deliver solutions to middle-market companies. Crown’s principals have facilitated in excess of $5.3 billion of transactions across 450+ borrowers, representing over 75 years of aggregate track record.