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Vertex Energy closes Vertex Holdings takeover.


12 September 2012 - US industrial and commercial waste recycler Vertex Energy Inc (PINK:VTNR) said on Wednesday it had finalised the purchase of substantially all the assets and liabilities of Vertex Holdings LP, a specialist in aggregation, re-refining and processing of distressed petroleum streams.

The deal, agreed on 14 August, is in line with the buyer's vertical integration strategy and is expected to add to its earnings per share next year.

The transaction involves the purchase of Vertex Acquisition Sub LLC, a special purpose vehicle set up for the purposes of the acquisition. The entity comprises Vertex Holdings' operations of transporting, storing, processing and re-refining petroleum products, crudes and used lubricants including its operating units Cedar Marine Terminals LP, Crossroad Carriers LP, Vertex Recovery LP and H&H Oil LP. The deal also involves the real estate held by and B & S Cowart Family LP (B&S LP) and associated with H&H Oil's oil operations.

Vertex Holdings and B&S LP are controlled by Vertex Energy's chairman and CEO Benjamin Cowart, who also holds 77% in Vertex Holdings and 100% in B&S LP. Its CFO Chris Carlson has 10% in Vertex Holdings.

Vertex Energy also said it had taken a USD8.5m (EUR6.6m) loan from Bank of America NA to pay for the acquisition. The lender has also pledged to extend a further USD10m to the company.

Vertex Energy paid USD14.8m in cash, including assumed debt, and 4.5m of its common restricted shares for the company, as well as USD1.7m for the real-estate assets of B&S LP. The target will also receive additionally up to USD6.7m in earn-outs, with the final price being subject to working capital adjustments.

Craig-Hallum Capital Group LLC and Mayer Brown LLP counselled Vertex Energy, while Sedgwick LLP served as advisor to Vertex Holdings and B&S LP.Country: USASector: Petroleum/Natural Gas/Coal, Waste Management/EnvironmentTarget: Vertex Holdings LPBuyer: Vertex Energy IncVendor: Chris Carlson , Benjamin Cowart, B&S LPDeal size in USD: 23.2mType: Corporate acquisitionFinancing: Cash & Stock, DebtStatus: ClosedBuyer advisor: Mayer Brown LLP, Craig-Hallum Capital Group LLCComment: Deal size includes cash price and assumed debt.

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Publication:M & A Navigator
Date:Sep 12, 2012
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