Case Study: Big Eagle Services
$10 Million Senior-Term Facility

Here's what we saw at Big Eagle Services. A company engaged in upstream oilfield services that was growing faster than its competition. Today, Big Eagle is one of the largest private oilfield service firms in Western Canada. Other didn't see it. We did.

 

Big Eagle Inside

 

TRANSACTION OVERVIEW

Third Eye Capital provided $10 million in secured financing that allowed Big Eagle to purchase heavy equipment for upstream and industrial activities in the oilfield services industry. Big Eagle had been named one of the 100 fastest growing companies in Canada three years in a row by Canadian Business Magazine. The company needed to expand its fleet of service rigs to keep pace with demand, and expected that an income trust IPO would help meet its capital requirements. However, the IPO was postponed after the Canadian federal government repealed the favorable tax treatment of income trusts, forcing Big Eagle to look for alternatives. Third Eye Capital saw a solution and quickly put a financing in place that did not disrupt Big Eagle's existing credit arrangements.

 

OPPORTUNITY

Big Eagle is one of the largest field services providers for the oil and gas industry in Western Canada. The company and its subsidiaries provide a range of industrial and oilfield services across three major sectors: Drilling Services, Completion Services, and Construction Services. In Drilling Services, where it is an industry leader, the company exposes underground infrastructure utilizing a pressurized water and vacuum system called "hydrovac". Western Canada is the most established hydrovac market in North America. In order to keep up with its growing market share and expansion, Big Eagle needed to expand its fleet but an interrupted IPO and fully-drawn credit facility meant the company was turning down business. Big Eagle needed a financing partner that could provide capital without affecting the company's existing credit facility - a partner who was not constrained by superfluous debt ratios that deterred expansion and diversification. We saw a company with a strong reputation as a quality service provider with a hands-on and aligned CEO committed to growing the business. We saw a company with solid subsidiaries expanding beyond traditional oil and gas services to smooth out cycles and diversify cash flow sources. Big Eagle was a leading company ready to grow, and we saw it.

OUR APPROACH & OUTCOME

Big Eagle's existing debt load and failed IPO deterred other lenders, who failed to see the opportunity and value in the company's assets and its prospects in a cyclical industry. We took a hands-on approach to understanding the company's needs, and developed a financing solution that complemented Big Eagle's already leveraged capital structure without breaching any debt covenants. We help good companies like Big Eagle solve complex or unconventional financing problems so that they can reach their business goals. We assess transactions from the perspective of the business owner, and match our capital to not just business need but also asset and enterprise value potential.

We aligned ourselves with Big Eagle's management by providing a transitional financing solution that drew upon our practical business experience in equipment financing and construction services. Big Eagle was able to increase its geographic reach, diversify, and increase its revenue base. We saw so Big Eagle could soar.

"At Third Eye Capital, we pride ourselves on taking a broader perspective in order to grasp a company's full potential. We look through another lens to see the latent value hidden in assets which allow a company to be viable and thrive."        

Arif N. Bhalwani