The Selling Company: J4 Fluid Services, Inc., Victoria, Texas, is a provider of specialized chemicals that are used in the drilling and fracking operations for oil and gas in the Eagle Ford basin in South Texas.
Why the company was sold: The company was fairly young, founded in 2009, and had experienced rapid growth, which required the shareholders to reinvest all the profits. The inactive partner desired to exit the business and the active partner wished to have a liquidity event to diversify his wealth but, at the same time, to continue to manage and be a shareholder of the J4 Fluid Services.
Capital Alliance’s Performance: The shareholders engaged Capital Alliance to match-up J4 Fluid Services’ rapid growth in this booming shale basin, and hence its future capital needs, with a financial or strategic buyer with the same growth vision.
Terms of the Transaction: After an exhaustive search, Capital Alliance orchestrated an acquisition by U.S. Shale Solutions in a simultaneous acquisition and roll-up of four energy services companies. The shareholders received cash as well as shares in the new corporation.
The Acquiring Company: U.S. Shale Solutions, Inc., Houston, Texas, was formed to acquire the four independent companies in a transaction involving funds raised of over $240 million and annual revenues of approximately $300 million.