Daily News: August 13, 2014

Heartland Bank Leads HII Technologies $18MM Debt Financing

HII Technologies announced it secured $18 million of senior secured debt funding from a group of lenders led by Heartland Bank. Roth Capital Partners acted as financial advisor to HII in the transaction.

The lenders are providing a senior secured credit facility to HII Technologies and its wholly owned subsidiaries consisting of a three-year $12 million senior secured loan (term loan) and a $6 million A/R purchase facility (AR facility).

The term loan, which closed on August 11, 2014, bears interest at a rate per annum equal to WSJ prime plus a spread that ranges from 5.50% to 8.25% per annum depending on the company’s first lien leverage ratio (provided that at no time shall the WSJ prime be less than 4%).

The term loan requires monthly interest payments, quarterly principal payments of $300,000 and a balloon payment on the maturity date. The term loan may be increased by up to an additional $10 million upon request and agreement by the lenders, but is not a committed amount under the facility. The A/R facility will have a fixed 1.50% service charge with an effective APR of 9.0% with customary advance rates for a working capital facility. The A/R facility replaces the company’s previous senior secured revolving A/R facility. The facility is secured by all of the company’s and its wholly owned subsidiaries’ assets. HII Technologies paid a cash structuring fee of $450,000 to the lenders and also issued a four-year warrant to purchase 2.5 million shares of common stock with an exercise price $1.00 per share in connection with the facility.

“This credit facility and the previously announced equity capital raised late June and July provides us with additional capital to fund organic growth and acquisition opportunities,” stated Matthew Flemming, CEO of HII Technologies. “While our firm is currently experiencing rapid organic growth, from time to time, we identify what we believe are excellent acquisitions that can create value for our company. AES Water Solutions and AquaTex have both performed well post-acquisition and brought new customers and market share for accelerated growth. We expect to quickly deploy this capital to win some of this business. I would like to thank the Heartland Bank team who arranged the syndicate, and especially Greg White, senior credit analyst and Phil Thomas, chief lending officer for their efforts in helping us put together this financing package that we believe will allow us to continue to execute on our business strategy.”

Houston, Texas-based HII Technologies is an oilfield services company with operations in Texas, Oklahoma, Ohio and West Virginia.