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CIT Provides $65MM Facility in Laney Directional Drilling Acquisition

September 04, 2014, 07:19 AM
Filed Under: Energy Services

CIT Group announced that it served as Joint Lead Arranger in a $65 million senior secured credit facility to support Maxim Partners’ and Falcon Investment Advisors’ acquisition of Laney Directional Drilling, Co., the largest independent Horizontal Directional Drilling (HDD) company in the world. HDD is a steerable trenchless method of installing underground pipes, conduits and cables with minimal impact on the surrounding area.

CIT Corporate Finance served as Joint Lead Arranger and Syndication Agent for the transaction. Financing was provided by CIT Bank, the U.S. commercial bank subsidiary of CIT. Terms of the transaction were not disclosed.

“We’re pleased to have financed Maxim-Falcon’s acquisition of Laney Directional Drilling,” said Jeff Kilrea, Co-Head and Managing Director, CIT Sponsor Finance. “We have a strong relationship with Laney having provided $43 million in financing last year. We’re pleased to participate in the continued growth of this company.”

Jay Baldinelli, Managing Director of CIT Sponsor Finance, added, “Maxim-Falcon has acquired a company that is at the forefront of horizontal directional drilling and we wish them continued success in the future as well look to further build on these relationships.”

Ryan Franco, a Managing Partner at Maxim Partners, said, “Maxim and Falcon are excited to partner with existing management to support the Company’s strategic vision of becoming North America’s preferred supplier of HDD services for energy infrastructure. In addition to providing financial sponsorship, we are placing accomplished pipeline industry veterans onto Laney’s board. Laney was acquired through Maxim’s new energy partnership with Falcon and demonstrates our unique ability to provide turn-key subordinated debt, preferred equity and common equity required to close a substantial change-of-control transaction. The CIT team demonstrated deep industry experience and financial expertise in getting this transaction closed smoothly and efficiently.”

Sven Grasshoff, a Principal at Falcon Investment Advisors, said, “We’re pleased to participate in Laney’s continued growth. The company is the leading independent HDD service provider in an industry with strong growth trends. The financing and expertise CIT brought to this transaction helps position Laney to continue growing its business. We look forward to closing more deals with CIT in the future.”

Kevin Fox, CEO of Laney Directional Drilling, said, “Laney is pleased to announce this acquisition, which represents a great opportunity for both our employees and the company to continue driving growth and offer best in class service to our customers. We look forward to partnering with Maxim and Falcon to significantly increase our portfolio of HDD capabilities as well as extend the Company’s geographic reach and we are pleased to once again work with CIT.”

Laney Directional Drilling, Co (“Laney” or “Company”) is the largest independent HDD company in the world and the only U.S. HDD company providing integrated engineering, design and construction services. The Company specializes in servicing pipeline companies with complex, challenging or large scale HDD requirements. Located in Houston, TX, Laney directionally drills for the purpose of installing infrastructure such as oil and gas pipelines and occasional telecommunications conduits. Other applications of directional drilling include water lines, sewer lines and environmental remediation casings. HDD is used for crossing waterways, roadways, shore approaches, congested areas, environmentally sensitive areas, and areas where other methods are more costly or not possible.

Founded in 1991, Maxim is a Chicago-based private equity firm dedicated to lower middle-market private growth companies in the Education, Environmental, Energy and Wellness industries. Maxim’s deep sector knowledge, extensive networks of relationships, and proprietary methods for growth allow it to generate significant incremental value beyond mere financial capital.

With offices in Boston and New York, Falcon provides innovative capital solutions in amounts of $10 million to $75 million to middle-market companies throughout North America. Since its founding in 2000, Falcon has invested in over 50 companies in a broad range of industries to support acquisitions, recapitalizations, buyouts and organic growth. Falcon is currently investing out of Falcon Strategic Advisors IV, LP, a $910 million vehicle.

CIT Corporate Finance provides lending, leasing and other financial and advisory services to the middle market with a focus on specific industries, including: Aerospace & Defense, Business Services, Communications, Energy, Entertainment, Gaming, Healthcare, Industrials, Information Services & Technology, Restaurants, Retail, Sports & Media and Transportation.

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