HII Technologies, Inc. Announces Letter of Intent to Acquire Oilfield Service Company
HOUSTON, Aug. 21, 2012 /PRNewswire/ -- 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."
About HII Technologies, Inc.
HII Technologies, Inc. is a Houston, Texas based development stage energy field services company which is focused on commercializing technologies in power and water management used by exploration and production companies in the United States. We entered the development stage on May 10, 2011 upon the consummation of the sale of substantially all of the assets of KMHVC, Inc. (f/k/a Hemiwedge Valve Corporation), our wholly owned valve design and production subsidiary. The Company changed its name August 2011 to HII Technologies, Inc. in connection with selling the name and assets of the Hemiwedge technology it had previously licensed and developed. Since the sale of its oilfield product line in 2011, it has undergone a strategic review to develop a value creating focus in oilfield service power and water management solutions via acquisitions and potential organic growth.
This document contains discussion of items that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurances that its expectations will be achieved. Factors that could cause actual results to differ from expectations include, but are not limited to, development stage company risks, difficulties in obtaining capital, difficulties in identifying products or services that will meet customer's needs, difficulties in identifying operating companies to acquire, limited personnel, volatility of the energy business and its effects on the Company's business, difficulties in new technology acceptance within the energy industry, political and economic global supply chain risk, general economic conditions in markets in which we do business, extensive environmental and workplace regulation by federal and state agencies, and other general risks related to its common stock, and other uncertainties and business issues that are detailed in its filings with the Securities and Exchange Commission. All information provided in this release and in the attachments is as of August 21, 2012 and the Company undertakes no duty to update this information.
SOURCE HII Technologies, Inc.