EXPANDED AND EXTENDED CREDIT FACILITY, AND NEW
HOUSTON, Nov. 1, 2022
/PRNewswire/ -- Adams Resources & Energy, Inc. (NYSE AMERICAN:
AE) ("Adams" or the "Company") today announced the repurchase of
all of the shares of Adams common stock owned by KSA Industries,
Inc. ("KSA"), the Company's largest stockholder, and members of the
family of the late Kenneth Stanley Adams,
Jr., the Company's founder, who are affiliated with
KSA. The sellers had previously announced their intention to
pursue a sale of their shares in Adams. The total purchase price
was approximately $70 million for
1,942,433 shares, or $36 per share.
This represents approximately 44.2% of the total shares
outstanding, reflecting an effective control position. The
$36 share price represents
approximately a 10% premium over the year-to-date weighted average
daily closing share price as of October
28th, 2022. Following the transaction, the
Company will have 2,452,404 shares of common stock outstanding. The
purchase will be funded by a combination of existing cash on hand
and a new term loan.
The transaction was reviewed and approved by a Special Committee
of the Adams Board of Directors. The Special Committee received
fairness and solvency opinions from leading national advisory firms
in connection with its evaluation of the share repurchase.
Additionally, the Company announced that it has entered into a
new five-year $85 million credit
agreement led by Cadence Bank.
This new agreement replaces the Company's existing three-year
$60 million facility and includes a
$25 million term loan which amortizes
over 10 years, with a balloon payment after 5 years and
$60 million in revolving credit
capacity. The new agreement includes letter of credit
capacity of $30 million, or
$10 million greater than the previous
agreement. In addition, the financial covenants under the new
facility provide Adams with more operational flexibility than the
"We believe that by repurchasing the KSA and associated shares,
along with the recent acquisition of Firebird and Phoenix, we have enhanced the value for all
remaining shareholders. This transaction will eliminate the
perceived stock overhang, and given the fewer shares outstanding,
will proportionally increase earnings per share", stated
Kevin Roycraft, Chief Executive
Officer of the Company. "The Company will also see an
immediate annual savings of roughly $1.9
million in dividend payments at the current dividend
Mr. Roycraft continued, "We have appreciated the long-standing
relationship with the Adams family and wish them the best with
future endeavors. Furthermore, we appreciate the confidence
of our stakeholders and their continued support in growing our
Mr. Roycraft concluded, "We remain committed to capital
discipline focusing on free cash flow, a healthy and disciplined
balance sheet, and returning cash to shareholders through our
dividend program. Our continued focus will be on growth
opportunities adjacent to our current business."
The Special Committee was advised by the GulfStar Group as
financial advisor, with Locke Lord LLP and Richards, Layton & Finger. P.A. acting as
About Adams Resources & Energy, Inc.
Adams Resources & Energy, Inc. is engaged in crude oil
marketing, transportation, terminalling and storage, tank truck
transportation of liquid chemicals and dry bulk and recycling and
repurposing of off-spec fuels, lubricants, crude oil and other
chemicals through its subsidiaries, GulfMark Energy, Inc., Service
Transport Company, Victoria Express Pipeline, L.L.C., GulfMark
Terminals, LLC, Phoenix Oil, Inc., and Firebird Bulk Carriers,
Inc. For more information, visit
Cautionary Statement Regarding Forward-Looking
This news release contains forward-looking statements.
Forward-looking statements relate to future events and anticipated
results of operations, business strategies, and other aspects of
our operations or operating results, and include statements
relating to the future effects of the transactions described in
this press release, growth strategies, cash flow and future
dividend payments. In many cases you can identify forward-looking
statements by terminology such as "anticipate," "intend," "plan,"
"project," "estimate," "continue," "potential," "should," "could,"
"may," "will," "objective," "guidance," "outlook," "effort,"
"expect," "believe," "predict," "budget," "projection," "goal,"
"forecast," "target" or similar words. Statements may be forward
looking even in the absence of these particular words. Where, in
any forward-looking statement, the Company expresses an expectation
or belief as to future results, such expectation or belief is
expressed in good faith and believed to have a reasonable basis.
Forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from those
expressed or implied in the forward-looking statements, and any
other risk factors included in Adams' reports filed with the
Securities and Exchange Commission. However, there can be no
assurance that such expectation or belief will result or be
achieved. Unless legally required, Adams undertakes no obligation
to update publicly any forward-looking statements, whether as a
result of new information, future events or otherwise.
Tracy E. Ohmart
EVP, Chief Financial Officer
Investor Relations Contact
Gary Guyton or Steven Hooser
Three Part Advisors
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SOURCE Adams Resources & Energy, Inc.