Emerge Energy Services closed a transaction to acquire Osburn Materials for $20 million. The transaction was funded with a new term loan provided by a bank group with U.S. Bank serving as disbursing agent and collateral agent.

The transaction was funded with a new $40 million term loan, and Emerge Energy used remaining proceeds after transaction fees and expenses to repay outstanding borrowings under its revolving credit facility.

According to related 8-K filing, Emerge entered into a new $40 million second lien senior secured term loan facility with the partnership’s wholly owned subsidiaries Emerge Energy Services Operating and Superior Silica Sands as borrowers and U.S. Bank as disbursing agent and collateral agent. The loan agreement matures on April 12, 2022. The loans under the agreement will bear interest at the partnership’s option at either the base rate plus 9.00% or LIBOR + 10.00%.

The partnership also entered into amendment to its revolving credit agreement among the partnership, as parent guarantor, the borrowers, as borrowers, PNC Bank as administrative agent and collateral agent for the lenders. The amendment permits the partnership and the borrowers to enter into the second lien term loan agreement and to reduce the revolving credit facility to $190 million and further reduce the revolving credit facility on a quarterly basis to $125 million for the quarter beginning January 1, 2019.

Emerge Energy said Houlihan Lokey Capital served as exclusive placement agent in connection with the debt financing.

Osburn Materials is located approximately 25 miles south of San Antonio, TX. It currently produces and sells sports sands and building products but does not yet serve the energy markets.

Osburn Materials has over 80 million tons of sand reserves as of the effective date of the acquisition, according to internal estimates.