Texas Energy Network Receives $20 Million of Growth Equity
HOUSTON, May 30, 2012 - GulfStar Group ("GulfStar") is pleased to announce that it arranged a $20 million equity commitment with a consortium of private investors to provide growth capital to oilfield communications provider Texas Energy Network, LLC ("TEN" or the "Company"). The investment and initial funding closed on May 9, 2012.
TEN is deploying wireless data networks to cover the oil and gas producing regions of the Permian Basin and Eagle Ford Shale, using the latest available fourth-generation Long-Term Evolution ("4G LTE") communications technology over exclusively licensed 700 MHz and AWS spectrum. The Company's network will provide oilfield communications capabilities that are faster and more reliable than existing satellite and private radio network solutions at substantially lower prices. The implementation of this network will finally enable the energy industry to fully and cost-effectively realize the long-anticipated efficiencies in centralized monitoring, reporting, troubleshooting and mobile communications offered by the "Digital Oilfield." TEN's service will replace existing technologies and, due to its attractive price point, greatly expand the addressable market. Applications include remote drilling data collection and analysis, real-time reporting of well production and equipment performance, centralized expert analysis and troubleshooting, mobile connectivity for field operations, including oilfield services providers, site access control and security monitoring, and voice over Internet Protocol ("VoIP") and video conferencing applications. Founded in 2010 by telecommunication industry veterans, TEN commenced initial network operations in Andrews County, TX in August 2011.
The investment group includes energy industry veterans familiar with the communications challenges faced by exploration and production, drilling and oilfield service companies in the remote areas where much oil and gas production occurs. The investment will enable TEN to fully deploy network coverage of the Permian Basin and Eagle Ford Shale, including closing the purchase from Verizon Wireless of 700 MHz spectrum covering the Eagle Ford in South Texas, purchasing and deploying tower, network core, consumer premises and other equipment, and provide working capital.
TEN founder and Chief Executive Officer Greg Casey said of the process, "We greatly enjoyed working with GulfStar and view the ties we formed as the beginning of a long-term relationship. We cannot think of a better group of investment partners for our Company and it was GulfStar's deep relationships within the energy and financing communities that enabled TEN to access the funding it needs to put our plan into action."
The GulfStar team included Managing Director Bryan Frederickson, Senior Vice President Joe Watt, Associate Chase Stanzel and Analyst James Steen. "GulfStar is very pleased to have closed this transaction and greatly appreciates the trust TEN put in our firm to help it raise the needed capital," said Frederickson. "As with most early stage situations, management took substantial personal financial risk to get the Company to this point, so it is especially gratifying to be involved in positioning them to take the next step. We believe TEN is now partnered with investors who will not only provide capital but whose deep industry ties will also contribute substantial marketing and operating support."
About GulfStar Group
GulfStar Group is a leading middle market investment and merchant bank headquartered in Houston, with a strong market presence in Austin, Dallas, Louisiana and Oklahoma. GulfStar specializes in providing merger and acquisition advisory services, institutional private placements of equity and debt, restructuring and turnaround advisory services and general corporate finance advisory services to companies with revenues or enterprise values generally ranging from $25 million to $350 million. Since its formation in 1990, GulfStar has completed over 550 transactions in more than 30 states and seven foreign countries across a variety of industries. Through its merchant banking affiliate, the firm also makes equity and subordinated debt co-investments.
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