The Selling Company: CDK is a $35 million revenue energy services company providing wellbore perforating, wireline, and well logging services to oil and gas E&P companies. Company services are in high demand, and revenues and profits more than doubled over the past two years. The current employee count is in excess of 100.
Why the company was sold: As the company matured, one of the original partners became less active, and the other partners decided to buy his shares. As the company grew, their capital equipment needs started to consume a large portion of the cash flow. They also wanted to diversify their estates, so a recapitalization with a strong financial partner was the most attractive option open to them.
Capital Alliance’s Performance: The CDK briefing was presented to 42 potential acquirers, and 8 buyer meetings were held. The ultimate acquirer was one of the first to review the material, and continued to show strong interest as the company grew stronger and more profitable in time. When a strategic buyer had to pull out of a transaction, Capital Alliance re-engaged the ultimate acquirer within a matter of weeks, and kept the momentum moving toward a sale.
Terms of the Transaction: The unit holders sold a controlling interest in the company and retained a large share in the newly-formed entity.
The Acquiring Company: SCF Partners is a worldwide private equity company with a focus on energy service and equipment companies. SCF has built more than 50 platform service companies and completed over 275 growth acquisitions. They have built 12 companies that have joined the public markets via IPO, raised 7 funds over 20 years, and has approximately $1.5 billion in assets under management.
