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Maximizing Proceeds Leveraging Owner-Occupied Real Estate: A Case Study

 

Situation:
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 jackup 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.

Solution:
Veritas 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.

VERITAS Advantages:

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“Veritas 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.”
— Ash Sharma, CEO and President, Integrated Equipment, Inc. 

Result:
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.”
— Evan Nadler, Senior Vice President, Veritas Financial Partners

About Veritas Financial Partners

Veritas Financial Partners is a specialty finance firm that provides $2 – $20 million senior secured credit solutions to businesses across various industries. Veritas serves entrepreneurs, management teams and private equity sponsors by delivering the flexible, responsive capital needed to achieve their goals. As an affiliate of an investment fund with $2.5 billion in assets under management, Veritas benefits from a substantial long-term capital base.

Evan Nadler
Senior Vice President
(312) 809-0757
enadler@vfpfinancial.com
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Mark Seigel
President
(561) 405-4008
mseigel@vfpfinancial.com
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David Bueno
Vice President
(215) 717-7259
dbueno@vfpfinancial.com
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Tony Liobis
Vice Chairman & Chief Credit Officer
(561) 405-4003
aliobis@vfpfinancial.com
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