Paine & Partners and Tinicum Capital Partners Create Leading Environmental Services Provider to the Oil & Gas Industry Through Acquisition of Three Companies

HOUSTON, SAN FRANCISCO, NEW YORK and CHICAGO, July 19 /PRNewswire/ -- An investor group led by affiliates of Paine & Partners, LLC ("Paine & Partners") and Tinicum Capital Partners announced today that R360 Environmental Solutions (R3 Treatment Inc. d/b/a R360 Environmental Solutions), a recently formed environmental services company, has completed the acquisitions of U.S. Liquids of Louisiana ("USLL"), the Controlled Recovery, Inc. group of companies ("CRI"), and the Calpet / R&G group of companies ("Calpet").  

R360 Environmental Solutions will immediately become the leading independent provider of environmentally-conscious waste disposal, recycling and treatment solutions to oil and gas producers, consolidating the highly fragmented market for waste treatment, recycling and disposal services to the United States' energy markets.  R360 Environmental Solutions will serve some of the most active and economically attractive oil and gas producing regions in the United States including the Haynesville and Eagle Ford shales, the Gulf Coast, the Permian Basin and the Pinedale Anticline in southwest Wyoming.  R360 Environmental Solutions will look to expand its operations and further support the needs of its oil and gas exploration and production customer base.  

Troy Thacker, who was with Paine & Partners and its predecessors since 2001, is becoming R360 Environmental Solutions' Chief Executive Officer. Mr. Thacker will be joined on the R360 executive management team by Manny Gonzalez, Chief Executive Officer of USLL, John Barnidge, Chief Executive Officer of CRI, and Gary Wallace, President of CRI.  In addition, Franklin Myers, a Paine & Partners Operating Advisor with deep experience in the energy sector, will serve as Chairman of the Board.  Until recently, Mr. Myers was a Senior Advisor to Cameron International Corporation, where he held several senior management positions since joining the firm in 1995.  The Company and management team will be based in Houston, TX.

"R360 Environmental Solutions is uniquely situated to service our customers' needs of 24-hour service and extraordinary environmental stewardship, across multiple hydrocarbon basins," said Troy Thacker, CEO.  "We intend to significantly expand our service offerings and capacity, ensuring continued best in class performance."

"Through this investment, we are creating a diversified market-leading environmental services company which will have scale and scope advantages," said Mitchell Presser, a partner at Paine & Partners.  "R360 combines complementary companies in different geographical locations that will benefit from integrated management, sales and systems compliance."  

"We are delighted to be partnering with Paine & Partners, management, and the rest of the investor group in the R360 Environmental Solutions transaction," said Trip Zedlitz, a partner at Tinicum Capital Partners. "We share R360's vision of growth and look forward to working with management on the execution of strategic initiatives and continued focus on superior customer service."

ESS Funds, a middle-market focused energy investment specialist, and Blue Sage Capital, the majority shareholder in CRI, also are part of the investor group.  Blue Sage invested in CRI in 2006 and recognized the strategic and investment opportunity to participate in a larger consolidation platform in the industry.  All four sponsors are committed to deploying additional capital as they seek to grow R360 Environmental Solutions.  

R360 Environmental Solutions and the investment group have identified a number of strategic growth initiatives for the company including: maintenance of best-in-class environmental operations across the enterprise; expanding, organically and through acquisition, into new geographies both domestically and internationally; and continuing to provide outstanding logistical and support services to oil and gas exploration & production operators.

"We are pleased to be investing in R360 Environmental Solutions, which will leverage positive secular, regulatory and operational trends that we know well," said Jeff Hewitt of ESS Funds.  "We look forward to working alongside the other members of the investment group to create value through this industry leading venture."  

"We have enjoyed great success building CRI since 2006," said Peter Huff of Blue Sage Capital.  "Based on our experience with CRI, we appreciate the benefits of scale, customer service, and maintaining best practices with respect to environmental stewardship and liabilities management.  We strongly believe in R360's consolidation thesis and are excited to back Troy's vision to derive greater benefits from the larger platform."

In addition to acquiring CRI from Blue Sage, the investor group also acquired USLL from Three Cities Research and the Calpet group from its family owners.

"Given the quality of its employees, its strong focus on customer service, environmental sustainability through recycling and safe operations, the USLL platform will continue to be successful," said William Werdenberg, Executive Chairman at USLL.  "USLL achieved great success with strong support from our previous owner Three Cities Research and I have no doubt that USLL will continue its outstanding performance under its new owners.  I wish R360 all the best as it embarks on its strategy of growth."

About Paine & Partners, LLC

Paine & Partners provides equity capital for management buyouts, going private transactions, and company expansion and growth programs. Paine & Partners engages exclusively in friendly transactions developed in cooperation with a company's management, board of directors, and shareholders. The firm currently makes investments through its $1.2 billion fund, Paine & Partners Capital Fund III, L.P.  For further information, see www.painepartners.com.

About Tinicum Capital Partners II, L.P.

Tinicum Capital Partners II, L.P. is a private investment partnership based in New York. For further information, see www.tinicum.com.

About ESS Funds

Energy Special Situations Funds provides growth capital to the energy industry, with a focus on small and mid-sized businesses, ventures and projects. The ESS Funds team has broad operating and experience with many aspects of the energy industry and looks to partner with experienced management teams to build their businesses. For further information, see www.essfunds.com.

About Blue Sage Capital

Blue Sage is an Austin, Texas-based private equity firm founded by Peter Huff and Jim McBride.  Blue Sage specializes in growth, recapitalization and buyout financings of smaller middle-market companies based in Texas and the Southwest.  Most of Blue Sage's investments are in established, profitable companies with $5-100 million of revenue and $2-6 million of cash flow at the time of investment.  Blue Sage invests in a variety of industries, with each initial investment in a company ranging from $5-15 million.  The partnership also reserves additional capital for follow-on investments in companies that are already in its portfolio so that these companies can continue to finance their growth via internal expansion as well as strategic acquisitions.  For additional information please visit Blue Sage's website at www.bluesage.com or contact Peter Huff at (512) 536-1901.

SOURCE Paine & Partners, LLC; Tinicum Capital Partners