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The key thing for buy-side prospects reviewing this is that the CEO/owner is very reasonable on valuation at this time. The company had EBITDA of $3.2mm in 2014. 2015 Adjusted EBITDA was $1.2mm, while many in this space were negative. This goes to show the strength of the CEO/owner and management to navigate through down times. In 2014, the business produced Sales of $6mm and $3mm of EBITDA and would have sold for north of $10mm. Right now, the owner would be willing to do a an outright sale, or a majority recap in the $3-5mm range, and the valuation inside that range is dependent on equity ownership (if any) retained if a majority recapitalization. The owner feels that now is the time to capitalize on the downturn to bring in some low-hanging fruit, including but not limited to a fishing tool rental assets that we can get for "pennies on the dollar". We believe other businesses would be complimentary as well. Ownership was too busy to take on these initiatives during the last "peak cycle", and is focused on a recap at this time to be prepared for the next cycle to maximize exit valuation with whoever we partner with today. Project OK Services is an oilfield service company providing laydown machines, pipe racks, hot shot/trucking, forklifting, crane, and well site management. OK Services is located in Oklahoma. The ownership is open to a majority recapitalization of the business. The company is able to protect on the downside of “new well completion” with its other services that are purely “work-over” and trucking. About 1/3 of Sales is derived from laydown unit/drilling service work while the balance is related to work-over and trucking. The balance is workover-related. Business Highlights: • Customer Base: The top customer is one of the best-positioned "majors" in the market right now. None of the top three customers are "in trouble" so to speak. • Competitive Advantages: The current owner is in his 40’s, and has nearly 25 years of managing, building, and starting oil field related services, so he knows the “ins and outs” of the market. Reputation is the biggest hurdle for entry to the oil patch. • Market Channels: The company’s customers are E&P / operating companies. The company has MSAs with major E&P companies versus focusing on independent players, a “who’s who” of the Oklahoma (and national) Oil & Gas market. Their top customer is a leading Gas producer as are several other top customers, so, again, oil prices not as much as a driving force here. Further, given the customer base is comprised of majors, most of these companies are “well-hedged” through 2015 and into 2016 to weather price volatility. • Personnel and Equipment: Project OK Services has grown to 17 employees, 7 laydown machines, 35 pipe racks, 20 pickup trucks, 4 semi-tractors, a crane truck, and several fork lifts.
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