Clairvest Group and Clairvest Equity Partners III Limited Partnership announced that its investment partner Light Tower Rentals successfully issued U.S. $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 $100.3 million from LTR, equaling 3.1 times Clairvest’s investment in the company.
Clairvest realized 25 percent of the amount on a pre-tax basis. Clairvest maintains a 51-percent ownership stake in LTR, which is currently leveraged at about three 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. Clairvest made its first investment in LTR in 2008 when EBITDA was $18 million. Since then LTR has grown run-rate EBITDA to about $100 million, growing from seven branches in 2008 to 13 branches and eight 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 period, 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,” 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, based in Toronto, 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. Light Tower Rentals is based in Odessa, Texas.