HII Technologies, Inc. (OTCBB: HIIT), a development-stage energy services company located in Houston, Texas, announced it has signed a non-binding letter of intent to acquire the assets of an oilfield services company headquartered in Dallas/Ft Worth, that operates under the name “AES”, who provides water handling solutions for exploration and production companies within the United States. The Company anticipates the closing of the transaction within the next sixty days. The acquisition is subject to, among other things, completion of due diligence, conclusion of definitive agreements, completion of any necessary government approvals, board of directors’ approval for HIIT and AES as well as the procurement of a $1 million line of credit by HIIT.
AES specializes in high volume water transfer services through mobile piping solutions with top-of-the line environmentally safe, no-leak systems designed to support hydraulic fracturing used in hydrocarbon reservoirs. On an unaudited basis, AES has recorded approximately $860 thousand in revenues through the first six months of operations period ending July 2012, with current estimated revenues of approximately $300 thousand per month from its existing customer base and generating about 33% free cash flow with that revenue run rate. The Company will be required to have AES’ financials audited by independent auditors at or shortly after its closing of the acquisition and based on its profitability believes it is accretive to its earnings per share.
Terms of the deal include a $290 thousand cash down payment, the issuance of 6.5 million restricted common shares of HIIT stock and a seller note of $1.3 million along with customary employment agreements for AES management.
HII Technologies currently believes its oilfield customer relationships and supply chain access in the industry will support the anticipated high future growth rate of AES. Currently, AES’ primary focus is with nationally recognized customers that are E&P companies that have operations in Texas.
The Company’s CEO, Matt Flemming stated, “Further to the Company’s July 11th, 2012 press release, HII has been evaluating oilfield service operating company candidates for potential acquisition. During the course of 2012, we have evaluated several acquisition candidates. As a result of the Company’s hard work and extensive negotiations, we are pleased to have entered into a letter of intent to acquire the assets of AES, a company which fits nicely within our strategy.” Mr. Flemming continued, “AES President, Brent Mulliniks, P.E., and co-founder Billy Cox, have an excellent reputation in the marketplace for providing turn-key water handling solutions to oilfield service will open up other opportunities for our Company.”
Mr. Mulliniks, stated, “This is a win-win scenario for our two companies. HII brings capital lines of credit, public company status and additional customer relationships to AES, while we can focus on growing our business, satisfying customers and executing the business plan.”