Houlihan Lokey Advises Emerge Energy Services (2)

Houlihan Lokey is pleased to announce the closing of a $296 million financing for Emerge Energy Services LP (Emerge) (NYSE:EMES), a publicly traded portfolio company of Insight Equity (Insight). The $296 million financing consisted of a $75 million asset-based revolver, $215 million in second lien notes, and $6 million in privately placed common units. Proceeds were used to refinance existing indebtedness, provide additional liquidity for growth capital expenditures, and pay related fees and expenses. The transaction closed on January 5, 2018.

Emerge is a leading pure-play, low-cost frac sand producer in the U.S. with an advantaged logistics network that provides direct access to the most prominent resource plays in North America. The company operates five dry plants, each with access to Class I rail lines and strategically located transload facilities throughout the U.S., enabling the company’s position as a low-cost provider in the industry. In April 2017, the company acquired Osburn Materials, a leading sand and construction materials producer located adjacent to the Eagle Ford basin, which was then converted into an in-basin frac sand operation (the "San Antonio Facility").

Insight is a private equity firm that makes control investments in strategically viable, middle-market companies across a wide range of industries. The firm specializes in partnering with companies in complex and challenging situations, including corporate divestitures, aggressive growth opportunities, restructurings, and transitions from private family ownership. Insight has approximately $1.4 billion in capital under management and is currently investing from Insight Equity Ill LP, which has $640 million in capital commitments. Insight’s headquarters is located in Southlake, Texas; the firm also has an office in New York City.

Houlihan Lokey was engaged as the lead placement agent to arrange financing options that would provide Emerge with meaningful liquidity for growth capital expenditures to expand the capacity of its San Antonio Facility from around 600,000 tons per year to an expected 4 million tons per year as it sought to be a first mover to a logistically advantaged, in-basin opportunity in the Eagle Ford basin. Houlihan Lokey ran a targeted process to obtain a comprehensive financing package that enabled Emerge to capitalize on its strategic growth initiatives. Houlihan Lokey was able to utilize competitive tension to minimize equity dilution and improve terms for the company in line with changing market conditions during the process.