Light Tower Rentals Inc, a portfolio company of Canadian private equity firm Clairvest Group, has completed an issue of US$330 million of senior secured notes. Proceeds were applied to the company’s existing debt and provided for a shareholder distribution. Clairvest, which has backed Light Tower since 2008, received a distribution of US$100.3 million, which equates to 3.1x Clairvest’s investment. Clairvest realized 25 percent of this amount, or US$25.1 million on a pre-tax basis, and continues to maintain a majority stake in the company. Based in Odessa, Texas, Light Tower is a specialty rental and service company renting surface-based support equipment to the oil and gas industry.
Light Tower Rentals Completes Bond Financing and Clairvest Receives Distribution of 3 Times Its Investment
Toronto, Ontario (July 21, 2014) – Clairvest Group Inc. (TSX: CVG) (“Clairvest”), together with Clairvest Equity Partners III Limited Partnership (“CEP III”, collectively “Clairvest”), announced today that its investment partner Light Tower Rentals (“LTR”) successfully issued US$330 million of senior secured notes. Proceeds from the issue were used to refinance LTR’s existing debt and make a shareholder distribution.
As a result, Clairvest received a distribution of US$100.3 million from LTR, which equates to 3.1 times Clairvest’s investment in the Company. Consistent with its beneficial ownership, Clairvest Group Inc. realized 25% of this amount, or US$25.1 million on a pre-tax basis. Clairvest maintains a 51% ownership stake in LTR which is today leveraged at about 3 times net debt to EBITDA.
LTR is an oilfield focused, specialty rental and service company renting surface-based support equipment to oil and gas companies in major basins throughout the United States, with a concentration on power generation. Clairvest made its first investment in LTR in 2008 when EBITDA was $18 million. Since then LTR has grown run rate EBITDA to approximately $100 million, growing from 7 branches in 2008 to 13 branches and 8 satellite locations in 2014.
Growth has been achieved through the re-investment of free cash flow to grow the equipment fleet and expand the company’s physical presence. During that time LTR also completed five strategic add-on acquisitions.
“LTR’s management team has done an outstanding job positioning LTR as a leading provider of equipment rental and services in its niche. Success has been achieved by management’s creativity and unwavering commitment to providing the best equipment and best service in the market”, said Clairvest Co-CEO Ken Rotman. “The recent financing provides for a long term and stable capital structure which will allow the Company to continue to capitalize on further growth opportunities.”
Clairvest Group Inc. is a private equity management firm that invests its own capital, and that of third parties through the Clairvest Equity Partners limited partnerships, in businesses that have the potential to generate superior returns. In addition to providing financing, Clairvest contributes strategic expertise and execution ability to support the growth and development of its investee partners. Clairvest realizes value through investment returns and the eventual disposition of its investments.
Director, Investor Relations and Marketing
Clairvest Group Inc.
Tel: (416) 925-9270
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