Alvarez & Marsal advises Vertex on $65 million refinancing
Vertex Resource Group has, supported by professional services firm Alvarez & Marsal (A&M), successfully completed a $65 million refinancing effort. The North American environmental and industrial services provider headquartered in Alberta employs over 450 staff, and has been undertaking an aggressive roll-up strategy, reinvesting funds to avoid tax liability by acquiring and consolidating smaller services companies in Western Canada.
Established in 1976, Vertex is a North American provider of environmental and industrial services. In the more than 40 years since its establishment, Vertex has assisted clients in achieving their development goals through a versatile suite of services. Project services offered by the consulting firm include initial site selection, consultation and regulatory approval, through the construction, operation and maintenance phases, to conclusion and environmental cleanup, for clients in the oil and gas, oil-sands, petrochemical, renewable energy, utilities, agriculture, forestry, drilling, midstream, mining, aggregate and municipal sectors.
As part of a long-term refinancing project at the firm, Vertex have completed a number of acquisitions in recent years. The company’s aggressive roll-up strategy – using an investment fund in which returns are reinvested in order to reduce tax liabilities – has seen the 2015 purchase of Ignite Energy Services, Glacier Ridge Ventures, and Tar Energy Services, creating a new Fluid Management and Logistic offering within their oilfield services outfit. In 2016, the investment continued, with Vertex acquiring Red Giant Energy Services, an oilfield service company which specialised in the storage, management and logistics of oilfield fluids in the Western Canadian Sedimentary Basin.
As part of further financial restructuring, professional services firm Alvarez & Marsal (A&M) advised on a combined $65.5 million refinancing of Vertex, with three different lenders. A&M have been involved in a number of refinancing and restructuring excercises in recent years, including the reorganisation of Stage Entertainment in 2016.
The largest part of the $65.5 million in capital raised for Vertex's future expansion came from Midstar Capital, a lender focused on providing flexible capital solutions to mid-market companies, who announced the closing of a $40 million term loan with Vertex in July. This was combined with a second senior secured credit facility, negotiating a revolver loan, to raise combined capital of $60 million. A subordinated credit facility was refinanced with a third lender in the amount of $5.5 million.
As Vertex’s exclusive financial advisor, A&M worked together with the company’s management team to market, structure, arrange and negotiate the refinancing. “A&M was actively involved throughout a very competitive process” said Terry Stephenson, President of Vertex “A&M helped us secure a favorable refinancing package that provides us with the flexibility to continue to execute upon our business plan. We are extremely pleased with the outcome and appreciated the market knowledge and transaction support that A&M delivered to this situation.”
