Vertex acquires Three Star Trucking

Alida, Sherwood Park, Alta. – On July 13 Vertex Resource Group Ltd. announced that it has acquired Three Star Trucking Ltd., an Alida-based trucking company providing fluid hauling service, pressure truck services, hot oilers and combo vac services throughout Western Canada. The deal went through on July 12. The acquisition of Three Star will add over 270 pieces of equipment to Vertex’s fleet, making the company’s fleet one of the largest in operations serving Saskatchewan, the Montney, and the Duvernay resource plays of Alberta and British Columbia, Vertex said in a release.

This isn’t the first time Three Star has sold. In October 2011, a majority stake was sold to Provident Energy. Provident was then sold to Pembina Pipeline Corp. As a pipeline company, their trucking operation wasn’t a fit.

“They didn’t want to be in trucking, so they gave us a deal,” said Ken Boettcher, one of the owners, in August 2015.

Thus, in August 2014, the Boettchers bought back the part of the business they had sold just a few years before. But now, with this sale to Vertex, the Three Star name will be gone for good.

Three Star was established in 1962. It was started with three partners, Jim Boettcher, George Connelly and John Hall, each with one truck with a 50-bbl. capacity. By 1969, the Boettchers had bought out their partners, and the company continued on as a family business, with several generations taking part.

It is currently licensed to haul condensate, NGL, butane and propane between Canada and the United States, holding federal transportation licenses in five states. The acquisition will allow Vertex to continue to develop its customer base and service offerings within the company’s current operating locations while further expanding into new service offerings and geographical markets including further expansion into the United States. The acquisition includes numerous high-pressure fluid hauling trailers that will enable Vertex to begin offering propane, butane and NGL fluid hauling services.

Terry Stephenson, CEO and president of Vertex, said in a release, “Through acquiring Three Star we are adding an experienced management team and operators to Vertex in addition to strengthening our service lines in Saskatchewan and the United States. Three Star’s proven customer base, experienced management team and safety program allows us to confidently expand this service line. With the completion of this acquisition, Vertex will be the leading provider of fluid hauling services in western Canada and will have the capacity and experience to continue serving these clients while growing Three Star’s United States operations.”

The acquisition was completed for a purchase price of $8.9 million consisting of 2.6 million common shares being issued at $1.00 per common share, $4.4 million in cash, and $1.9 million in non-interest bearing promissory notes payable over 2 years and assumption of $10.2 million in long term debt offset by positive working capital of $6.3 million. Vertex will use its approved $20 million senior secured accordion credit facility to fund the Acquisition.  Three Star’s EBITDA over the last twelve months was $5 million.

The Three Star acquisition is Vertex’s fifth this year. On Jan. 2, they bought Sonic Oilfield Services for $4.5 million. HMA Land, a land company focused on pipeline utility and mineral land, based in Calgary and Sherwood Park, was bought Feb. 1.

On June 7, they bought Manitoba-based TSL Industries for $4.55 million, which includes the assumption of $1.3 million of debt. The remaining $3.25 million was paid with a $2.5 million non-interest bearing promissory note payable over 2 years and $750,000 in cash. TSL provides vacuum, hydro vac, fluid hauling, hot oiling and pressure truck services in Manitoba. The sale was effective May 31.

A private hydrovac company in Edmonton was picked up July 3. That purchased doubled Vertex’s existing hydrovac fleet to that point, adding 11 units. The sale went for $4.3 million.

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