A local private equity firm has gone back to the Lone Star State for its latest deal, while also completing a seven-figure capital haul.
Turning Basin Capital, a downtown-based firm that invests in businesses in the energy industry, this month completed its acquisition of Liberty Tower & Flare.
Based in Bacliff, Texas, Liberty Tower & Flare installs, inspects and maintains flare stacks that are used predominantly by chemical plants and refineries on the Gulf Coast. A flare stack is a safety device that burns off excess gas from manufacturing processes.
Terms of the deal, finalized April 5, were not disclosed.
The acquisition is Turning Basin’s seventh since its founding in 2013, when it was launched as an offshoot of Ewing Bemiss & Co., a former local investment banking firm.
Turning Basin’s business model is to invest in companies that provide services equipment to the energy industry and that generate revenue of less than $20 million annually, and then grow them to a point that’s attractive to larger private equity buyers.
“We like to roll up our sleeves and work with companies that are below the radar of the traditional middle market,” said Tom Willingham, managing director.
Five of the firm’s seven deals have been in Appalachia, while this latest is its second in Texas.
With Liberty Tower & Flare, Turning Basin found a family-owned and -operated company that has been around for 40 years. It has been run most recently by Eric Alexander and Margie Morgan, whose parents were the founders.
Willingham the family ran a good business with 30 employees and plenty of room for upside.
Alexander and Morgan will stay on in operational roles and Turning Basin has brought in Chris LeBoeuf as CEO. He has experience in the infrastructure services industry.
Across the seven companies in its portfolio, Turning Basin and its affiliates have upwards of 700 employees in Appalachia, Alabama and the Gulf Coast. Those companies are bringing in combined annual revenue of between $100 million and $200 million.
$2.4M equity raise
Meanwhile, Turning Basin this month was busy raising a round of capital. It closed in early April on a $4.2 million equity raise from 31 investors, according to SEC filings. The firm said a portion of that money was used to help facilitate the Liberty deal.
The group said it has other deals in the works, including one with an unidentified company that’s in the electricity distribution service business.
It’s also coming up on the fifth anniversary of its first deal, which the firm said is the threshold at which it plans to begin looking for exits to cash out on investments.
Without going into specifics, Turning Basin said it hopes to have a successful exit in the not-too-distant future.