North Avenue Capital Closes
$5MM USDA Loan to 777 Holdings, LLC
Ponte Vedra, Florida – July 1, 2019 – North Avenue Capital (NAC), specialized commercial lender, announced today the closing of a $5 Million USDA Rural Development loan to Velma, Oklahoma oil and gas services firm, 777 Holdings, LLC (777). The loan facilitated the acquisition of Bullet Energy Services, LLC (Bullet), an established energy service company focusing on saltwater disposal, rig work, and transportation operations. With over 65 years of combined experience in a broad range of industries including real estate development, oilfield services, logistics, and commercial trucking, co-owners, Ron Fraze, James Lemons, and Michael Lemons, are executing their plan to consolidate multiple salt water disposal sites, where they expect to capitalize on economies of scale and improved operational efficiency.
Like many rural companies, particularly those supporting a historically cyclical industry like oil and gas exploration, 777 had met resistance from traditional lending sources in its effort to finance the purchase of Bullet. Affordable capital was the only missing ingredient from an otherwise meaningful opportunity to bring two businesses together and preserve jobs for the 37 hard-working Americans they employ.
Commercial Lender, Mike Wilson, led NAC’s effort and recognized the potential for 777 to reduce costs, improve processes, increase capacity, attract new customers, and expand revenue sources. Fraze recounted that Mike and NAC took the time to understand their experience, the business plan, and what he and the Lemons brothers knew they could accomplish with this acquisition. “The window of opportunity to make the purchase would have closed had it not been for NAC’s willingness to dig into the details of our plan,” said Fraze.
Wilson expressed NAC’s belief that this project represented a tailor-made opportunity for USDA Rural Development to support a business that is generating economic development and keeping jobs in this rural community. “This Business & Industry loan will not only protect the jobs already established in Velma but will expand opportunities up and down the supply chain elsewhere in Oklahoma, down into Texas, and beyond.”
By consolidating their operations, 777 and Bullet expect to double their injection volume over the next 3 years. NAC Chief Executive, Ben Chatraw, reflected that “this project is another great example of the real-life impact rural businesses can have on customers, employees, and the local communities they operate in when the USDA and private lenders partner to make senior debt available and affordable.”